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FxWirePro: EUR/GBP probes 200H MA, extends bounce off multi-month lows post-Eurozone PMIs

EUR/GBP chart - Trading View 

EUR/GBP spiked over 0.50% on the day and was trading at 0.8901 at around 09:15 GMT. 

The pair is extending bounce off multi-month lows hit on Thursday's trade as the single currency buoyed post-Eurozone PMI data.

A possible extension of virus-led lockdowns in UK, downbeat UK macro data weighed on the sterling. While a somewhat hawkish ECB, mostly upbeat Eurozone PMIs underpinned the euro.

Data released earlier today showed German Manufacturing PMI missed estimates (57.5) to print at 57.0 in Dec. Services PMI however, improved to 46.8 in vs. 45.3 expected.

The Eurozone Manufacturing PMI printed at 54.7 in January, beating 54.6 expectations while the Services PMI dropped to 45.0 as expected and 46.4 last.

Price action is probing 200H MA at 0.8895. Scope for further upside seen as bears struggle to drag prices lower at wedge base support.

Spinning Top on Thursday's candle and turn in 5-DMA support upside. GMMA indicator shows shift in intraday trend.

Decisive breakout at 200H MA could see more gains in the pair. Next major resistance lies at 0.8945 (21-EMA) ahead of 0.8988 (200-DMA). 

The forthcoming BoE meeting on February 4 will provide crucial information on the inflation outlook in the UK and determine further direction for the pair. For now, analysts expect that a negative Bank rate will be avoided.

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