- Summary:
- EURGBP pair fell today and is aiming at 0.8610 as Boris Johnson remains in hospital while UK construction PMI data disappointed.
The EURGBP pair declined by about 0.40% as the market reacted to multiple news from across Europe. From the UK, the market reacted to news that Boris Johnson had spent the night admitted in hospital as his condition is said to have gotten worse. The prime minister was taken to hospital because he had temperature and doctors recommended more attention.
Meanwhile, economic data from the UK sent a dull picture. The construction PMI data released by the Chartered Institute of Purchasing Supplies (CIPS) showed that activity in the sector fell to the lowest level since the last financial crisis. The PMI of 38.8 was lower than the estimated decline of 48. This number matters because the sector employs millions of people.
There was optimism around the EU as the pace of Coronavirus infections started to decline. Some of the hardest-hit countries like Spain and Italy have said that they will start to reopen. This is after the countries remained in a shutdown for a larger part of March. Still, it is early to predict when things will normalize. It is also challenging to predict whether secondary infections will happen as people start to interact again.
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EURGBP Technical Analysis
The EUR to GBP pair declined to an intraday low of 0.8760, which was close to its lowest level since March 12. On the three-hour chart, the price is along the 38.2% Fibonacci Retracement level drawn by connecting the highest point in March with the lowest part of the month. The pair is slightly below the 14-day and 28-day exponential moving averages. It is also at the third phase of the Elliot Wave. I expect the pair to continue falling, with the next target being the 23.6% Fibonacci level at 0.8610.