US DATA: Chicago Business Barometer™ - Dipped to 55.3 in October

• MNI SEP CHICAGO BUSINESS BAROMETER 58.8 VS AUG 47.1

• Of the 0.36pp downward revision to the core PCE Y/Y rate in July, we estimate 0.33p came from the highly anticipated methodological changes in portfolio management & investment advice, computer software and legal services.
• These changes had first been touted in June but with their actual impact unknown until today, where they look to have been more negative than most expected.
• Portfolio management & investment advice drove this with -0.23pp followed by computer software -0.11pp whilst legal services was neutral at +0.01pps.
• For one example of expectations here, UBS had forecast -0.15pp, -0.08pp and +0.05pp respectively, i.e. there were downside surprises across all three categories. UBS had been at the softer end of analysts with expectations of a -0.25pp downward revision to the July core PCE Y/Y rate.
• See the below charts for where these revisions were concentrated and clearer context for their magnitude: 

• RES 4: 0.8694 High Jun 22 
• RES 3: 0.8652 High Jun 26 
• RES 2: 0.8635 76.4% retracement of the Jun 22 - Jul 15 bear leg
• RES 1: 0.8581/8612 20-day EMA / High Sep 25 
• PRICE: 0.8547 @ 14:31 BST Sep 30
• SUP 1: 0.8540 Intraday low 
• SUP 2: 0.8532 Low Aug 12  
• SUP 3: 0.8515 61.8% retracement of the Jul 15 - Sep 25 bull leg 
• SUP 4: 0.8492 76.4% retracement of the Jul 15 - Sep 25 bull leg   

The reversal lower in EURGBP this week has resulted in a breach of support at 0.8553, the Sep 14 and 15 low. Clearance of this level signals a possible reversal of the recent bull leg. The move down suggests potential for an extension towards 0.8532, the Aug 12 low, and 0.8515, a Fibonacci retracement point. Key resistance to watch is 0.8612, the Sep 25 high. A clear break of this hurdle would confirm a resumption of the bull phase.