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We’ve got a bunch of manufacturing and services PMIs on tap during the London session. Here’s why EUR/GBP is a chart to watch in the next couple of hours.

Currency Snapshot:

Major Forex Pairs Performance from MarketMilk
Major Forex Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

What to Watch: EUR/GBP

EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

With no top-tier data printed during the Asian session, Coronavirus concerns dictated the ebbs and flows of currency trading.

Aside from the U.S.’ travel advisories to travelers to Japan and Hong Kong, reports of new confirmed cases further spooked the markets.

NZD sustained the biggest loss against the dollar as New Zealand is especially susceptible to weaknesses in tourism and global trade activity.

But that was a trading session ago. Over the next couple of hours Markit manufacturing PMIs from the euro zone and the U.K. will likely take center stage. A quick look at the weekly forecasts show that February PMIs are generally expected to be weaker than their January readings.

If the parade of euro zone PMIs suggest weaknesses in the region, then we could see EUR/GBP extend its downtrend on the 1-hour chart. This would be beneficial for the bears that got in at .8400 and are expecting .8300 February lows. Of course, it also helps that MarketMilk is supporting a “bearish” trend on the daily time frame.

On the other hand, a significantly weaker U.K. PMI release or stronger-than-expected euro zone PMIs could spur an upside breakout for EUR/GBP. A clear break above the descending trend line could push EUR/GBP to .8450 or even the .8500 previous highs.