EUR/GBP approaching August high September 23, 2016

The EUR/GBP continues to increase on the short term and is very close to reach the previous highs from 0.8723 level, which represents a very strong resistance level, we’ll see how the rate will react when will touch this level. The Cable is trading in the red, could reach fresh new lows versus its counterparts today because looks very heavy. The Euro has edged higher today because the Euro-zone data have come in mixed, the European currency has received a helping hand from the economic figures, has increased also versus the USD and against the Yen. The EUR/GBP outlook remains bullish on the short and medium term as the Pound could drop further in the coming period because the BOE could add more stimulus measures to help the economy.
The French Flash Manufacturing PMI has increased from 48.3 points to 49.5 points, exceeding the 48.4 estimate, unfortunately the manufacturing sector remains in the contraction territory, while the French Flash Services PMI indicator has surged from 52.3 to 54.1 points, has come much above the 52.0 forecast, is signaling that the expansion continues, has reached June 2015 high and has helped the EUR to climb higher on the short term.
The German data have come mixed as well, the manufacturing sector continues the expansion as the Flash Manufacturing PMI was reported at 54.3 points in September, higher than the 53.6 in August, has beaten the 53.2 prediction, but unfortunately the German Flash Services PMI has dropped from 51.7 points to 50.6 points, signaling that expansion has slowed down.
The Euro-zone Flash Manufacturing PMI has increased from 51.7 to 52.6 points, even if the economists have predicted a decrease to 51.5 points, meanwhile the services sector has slowed down the expansion, the Flash Services PMI has decreased from 52.8 to 52.1 points.

The price has increased and is expected to reach the previous high from 0.8723 level because has found strong support at the 76.4% retracement level, has also managed to jump again above upper median line of the major ascending pitchfork, personally I’m expecting to see the rate at the sliding parallel line (ascending dotted line), which represents a very strong resistance level. I want to remind you that the sentiment could change if the rate will have enough directional energy to climb above the sliding line, you can notice that the rate is moving somehow sideways, is consolidating the latest gains, but we still need a confirmation that the rate wil resume the upward movement.

I’ve added a minor ascending pitchfork on the H4 chart to understand better the price action, the rate is increasing inside the pitchfork’s body, has come down to retest the lower median line, where has found support again and now has edged above the minor median line (ml), could retest the median line before will resume the upward movement, the upside target is at the upper median line (uml) and higher at the 0.8723 static resistance, a rejection from these level will send the rate down again.