EUR/GBP drops to lows near 0.8510, PMI eyed

The now softer tone in both the British Pound and the single currency is now prompting EUR/GBP to correct lower to the 0.8515/10 band.

EUR/GBP eyes on German, UK data

The European cross keeps the consolidative theme intact around the 0.8500 handle for the time being as markets are slowly resuming its usual trading conditions and the greenback remains on a firm fashion during the first sessions of the year.

Following yesterday’s manufacturing PMIs in Euroland, it will be the UK’s turn later in the session, with the reading expected to come in at 53.0 during last month, a tad lower than the previous 53.5.

On this side of the Channel, German labour market figures are also due ahead of the more relevant preliminary inflation figures during December. Market participants see the CPI to have risen at an annualized 1.5% from November’s 0.7%, while the broader HICP is also seen higher, at 1.3% YoY.

EUR/GBP key levels

The cross is now retreating 0.05% at 0.8510 facing the next support at 0.8488 (low Jan.2) ahead of 0.8458 (20-day sma) and then 0.8353 (200-day sma). On the other side, a surpass of 0.8612 (55-day sma) would aim for 0.8632 (100-day sma) and finally 0.8668 (high Dec.30).