Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.8202-0.8246 and closed at 0.8233.

At 6:20 GMT today EUR/GBP was losing 0.04% for the day to trade at 0.8231. The pair touched a daily low at 0.8230 at 6:05 GMT.

Fundamental view

Euro zone

At 08:00 GMT, the Ifo Institute for Economic Research will publish its IFO Business Climate Index for Germany, the largest economy in the euro zone. The index is expected to have slightly deteriorated to 110.4 this month, from 110.7 in March.

The index is based on a monthly survey among 7,000 respondents from companies in the manufacturing, construction, wholesale and retail sectors. Respondents give their assessments of the current business situation and their expectations for the next six months. They characterize their companies’ situation as “good”, ” satisfactory” or ” poor ” and their expectations for their business over the next six months as ” more favorable “, ” unchanged ” or ” more unfavorable ” . The balance value of the current business situation is the difference between the percentages of respondents that answered the situation is “good” and those that assess it is “bad”, while the value of the balance for future business expectations is the difference between the percentages of the responses ” more favorable ” and ” more unfavorable “. Ifo business climate index represents the average balance of the two sub-indexes, the sub-index of current conditions and the sub-index of business expectations. The composite index uses a value of 100 points as a separator between the positive and negative forecasts. The more the result gets away from 100 points, the greater the confidence of the respondents.

A higher than expected reading will certainly provide support to the 18-nation common currency.

United Kingdom

At 10:00 GMT, the Confederation of British Industry will release the results from its monthly CBI distributive survey. The index will probably jump to 17 this month, from 13 in the previous. The indicator reflects the short-term trends in the sectors of retail and wholesale in the UK. The indicator is closely watched by the Bank of England as it weighs on the formulation of the central bank’s and the government’s economic policy. This is a highly valuable barometer of trade on the main streets. It represents a survey among executives and managers and regards sales, orders and inventories.

A higher than projected reading will heighten pound’s appeal.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.8252, it will probably continue up to test 0.8271. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8296.

If EUR/GBP manages to breach the first key support at 0.8208, it will probably continue to slide and test 0.8183. With this second key support broken, the movement to the downside will probably continue to 0.8164.