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This morning’s influx of European figures was good, while British numbers were disappointing. This sent EUR/GBP to the high end of the range but didn’t supply a breakout. Will we see EUR/GBP jump?

German job market improving

German Unemployment Change was excellent: The number of unemployed people in Germany fell by 1000 people. The number was expected to rise by 33,000. This is great news for Europe, and especially for Angela Merkel, very close to the elections.

Other European figures were within expectations:  German Retail Sales rose by 0.7% as expected,  Final Manufacturing PMI was slightly better than expected: 48.2 instead of 47.9 and the all-European  Unemployment Rate, eyed by the ECB, rose as expected to 9.5%.

The last two figures mean that the continent’s smaller countries aren’t so far behind the big countries: Germany and France, which are leading the recovery.

Disappointing British Releases

Manufacturing PMI, which managed to jump over the 50 point hurdle, was expected to advance even further this month and rise to 51.5. Instead of rising, it fell. Not only did it fall, but it was under the 50 point mark, which means that purchasing managers expect more contraction, after only one month of hope for expansion.

Also  Net Lending to Individuals, which measures how much people are borrowing, was a huge disappointment: it was expected to stand still on 0.4 billion, but instead it fell by 0.6 billion. A negative number hasn’t been seen in ages.

This means that more money is returned to lenders than borrowed.  Less money in circulation doesn’t help stimulate the economy.

Only British  Mortgage Approvals were (almost) within expectations, standing at 50K – 51K was expected.


Good European figures and bad British ones make EUR/GBP attractive. During all these releases, EUR/GBP moved upwards, peaking at 0.8834, only 5 pips away from last week’s peak at 0.8839. So, 0.8840 seems like a resistance line. At the time of writing, EUR/GBP calmed down to 0.8818.

Looking at the majors, GBP/USD weakened but remains above 1.62. EUR/USD hardly enjoyed the good numbers, and is now at 1.4314. Other pairs aren’t supplying breakouts at the moment as well.

It seems that the markets are awaiting a strong dollar move, either up or down, in order for big moves to happen also in the crosses.

EUR/GBP is flirting with another northbound breakout, but needs another boost. I highly recommend reading these excellent technical analyses:

Both are wide-scoped technical analyses, and they have different angles (different lines on the chart) for EUR/GBP.