The star of today’s European session was the PMI for manufacturing numbers which deviated from expectations in both the Euro-zone and the United Kingdom.
The Euro-zone PMI continued to show decline in manufacturing activity, but the index still reached a new high and sent the Euro higher. Then, the UK manufacturing PMI showed another month of increasing manufacturing activity, but was less than expected and therefore sent the Pound lower.
The effect of the two releases was a rally in EUR/GBP to a 15-months high. The pair rose more than 60 points in Forex trading and set a high at 86.47. The next high sits at 86.64, and may continue to provide resistance. A gap at 85.40 may provide support.
In other releases, Euro-zone inflation fell within a 2% ECB target according to the January estimate. Euro-zone unemployment was reported to have remained at 11.7% in December.
This afternoon, change in US non-farm payrolls for January will be released at 13:30 GMT. The release will have an unusual effect on markets because the Fed has pegged monetary stimulus to unemployment. Therefore, any improvements in unemployment means less of a chance of continued Fed stimulus.
EURGBP Daily: February 1, 2013
Chart created by Benjamin Spier using Marketscope 2.0
--- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .