Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.8231-0.8256 and closed at 0.8246.

At 6:17 GMT today EUR/GBP was losing 0.05% for the day to trade at 0.8246. The pair touched a daily low at 0.8241 at 1:50 GMT.

Fundamental view

Euro zone

The annualized index of consumer prices in France probably slowed down to 0.7% in March, according to the median forecast by experts, from 0.9% in February. The index measures the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. In case the CPI decreased more than projected, this would have a bearish effect on the euro. The National Institute for Statistics and Economic Studies will release the official report at 6:45 GMT.

Frances annualized CPI, evaluated in accordance with Eurostats harmonized methodology, probably fell to 0.8% during March from 1.1% in the prior month. In monthly terms, the harmonized CPI probably climbed 0.5% last month, following another 0.6% increase in February.

Annualized industrial production in the country probably contracted 0.3% in February, after dipping 0.1% during the preceding month. The index reflects the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining, utilities, with the exception of recycling.

French annualized manufacturing production, which accounts for almost 80% of total industrial production, probably expanded 1.0% in February, according to the median estimate by experts. In January it rose 1.4%. This index is considered as causing a greater influence on the currency market. In case manufacturing output increased more than projected, this would boost demand for the euro. The National Institute for Statistics and Economic Studies is to publish the official numbers at 6:45 GMT.

At 8:00 GMT the European Central Bank will release its Monthly Report, including detailed analysis of current and future economic conditions and price stability risks in the Euro region from banks perspective. It is usually published one week after ECBs interest rate decision.

United Kingdom

At 11:00 GMT Bank of England is to announce its decision on monetary policy. The benchmark interest rate will probably be left unchanged at 0.50%. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank left intact or raised borrowing costs, this would have a bullish effect on the sterling.

At the same time, the monthly pace of banks monetary stimulus will probably be left intact as well, at 375 billion GBP. The central bank issues new money in order to purchase gilts from private investors such as pension funds and insurance companies. In case monetary stimulus is increased (in order to further spur economic growth), this will usually devalue nations currency.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.8258, it will probably continue up to test 0.8269. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8283.

If EUR/GBP manages to breach the first key support at 0.8233, it will probably continue to slide and test 0.8219. With this second key support broken, the movement to the downside will probably continue to 0.8208.