Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
EUR/GBP Shrugs Off UK Services Data and Waits for the ECB

EUR/GBP Shrugs Off UK Services Data and Waits for the ECB

Nick Cawley, Senior Strategist

Share:

Talking Points

- UK services miss after last week’s manufacturing beat.

- All eyes on the ECB – will it offer any hint towards monetary tightening?

Check out our new Trading Guides: they’re free and have been updated for the third quarter of 2017

The dominant UK services sector missed market expectations, according to the latest Purchasing Managers’ report. The sector, which accounts for around 80% of UK GDP, according to figures from the Office for National Statistics, fell to 53.2 against expectations of 53.5 and July’s 53.8.

EURGBP moved a fraction higher in the wake of the release but trading is expected to remain fairly muted ahead of this Thursday’s ECB policy meeting. Expectations have been growing in recent weeks that ECB President Mario Draghi may outline a ‘quantitative tightening’ timetable, although the recent strength of the single currency may stay his hand.

DailyFX analyst Martin Essex will be covering the ECB announcement live on Thursday – you can sign up for free and join him here.

Last week the UK manufacturing PMI beat expectations, rising to 56.9 against a prior month’s 55.3 and expectations of a fall to 55.

Chart: EURGBP Three Minute Timeframe (September 05, 2017)

Chart by IG

Retail trader data show 24.7% of traders are net-long with the ratio of traders short to long at 3.05 to 1. In fact, traders have remained net-short since May 16 when EURGBP traded near 0.84323; price has moved 9.0% higher since then. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURGBP prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURGBP-bullish contrarian trading bias

For the latest IG Client Sentiment indicators, click here

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES