FxWirePro: EUR/GBP extends choppy trade, capped between 55 and 110 EMAs

EUR/GBP chart - Trading View 

EUR/GBP was trading 0.24% higher on the day at 0.8582 at around 15:00 GMT, bias remains neutral.

The pair is extending choppy trade as price action remains capped between major moving averages - 55 and 110 EMAs.

Data Watch: 

Eurozone’s investor sentiment continues to deteriorate in September, the latest data published by the Sentix research group showed on Monday.

The gauge dropped to 19.6 in September from 22.2 in August vs. a reading of 19.7 expected.

On the other side, German Factory Orders unexpectedly jumped in July, suggesting that the recovery in the manufacturing sector of Europe’s economic powerhouse is gaining momentum.

German Factory Orders jumped by 3.4% in July vs. -1% expected and 4.6% last, the latest data published by the Federal Statistics Office showed on Monday.

On an annualized basis, Germany’s Industrial Orders rose by 24.4% in the reported month vs. 26.5% previous and expected growth of 13.9%. The data outpaced expectations by a wide margin.

Major Support and Resistance Levels:

Support - 0.8556 (55-EMA), Resistance - 0.8593 (110-EMA)

Summary: The European Central Bank holds its policy meeting this week which could decide further direction for the pair. 

A number of policy hawks have been calling for a step back in their huge asset buying programme, though President Christine Lagarde has sounded more dovish.

Bullish RSI divergence keeps scope for upside in the pair. Decisive break above 110-EMA and daily cloud resistance will see test of 23.6% Fib at 0.8650 ahead of 200-DMA at 0.8685.