EUR/GBP Touches Two-Day Top Amid Favorable Manufacturing Data

The EUR/GBP pair climbed higher in the London session on Thursday and touched a two-day peak at 0.8349 in the last two hours. That said, the pair recorded a minor dip following the two-day top sighting, falling to the 0.8323 low as bulls continue to push for a return above the 0.8360 resistance level.

The latest bullish influx got sponsored by the release of better-than-expected German PMI data, which showed that commercial activities in the European giant’s manufacturing and services sectors grew significantly in March, although at a slower pace than February.

The Markit Manufacturing PMI dropped to 57.6, contrary to market sentiment expectations for a larger fall to 55.8 from 58.4 in February. Also, the measure for the services industry dropped as well in March, although better than consensus forecasts. Analysts believe that this was the primary catalyst behind the euro’s resurgence against the British pound, driving the EUR/GBP pair higher.

On the GBP end, Sterling suffered some setbacks following the dovish outlook adopted by the Bank of England in its policy meeting last week. Recall that the BoE eased its push for more hike rates in the future.

EUR/GBP Gains Capped By Developments from Russia-Ukraine War

However, worries that Germany could suffer the most spillover effects from the Ukraine crisis could limit gains for the EUR/GBP pair. That said, market participants will likely keep their focus on headlines around the Russia-Ukraine crisis.

Meanwhile, US President, Joe Biden, will meet with other NATO and European leaders to discuss the ongoing Ukraine war. Decisions and outcomes from this summit should provide some trading clues for the EUR/GBP in the near term.