Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.8115-0.8143 and closed at 0.8121.

At 6:19 GMT today EUR/GBP was adding 0.05% for the day to trade at 0.8123. The pair touched a daily high at 0.8126 at 5:30 GMT.

Fundamental view

Euro zone

The flash reading of the harmonized index of consumer prices (HICP) in the Euro zone probably remained intact in May from the final reading of 0.7% in the previous month, according to the median estimate by experts.

The HICP is used to measure and compare inflation between Member States. It is used for further evaluation of inflation, according to Art . 121 of the Amsterdam’s Agreement and directives of the European Central Bank to achieve price stability and the implementation of monetary policy. HICP is calculated based on international harmonized standards adopted by Member States. This is the percentage change compared to the corresponding month of the previous year.

Eurostat is scheduled to release the official report at 09:00 GMT. A weaker-than-expected reading may prompt the ECB to ease monetary policy at its meeting this week, to avoid risks of deflation. However, higher-than-expected reading will probably relieve pressure on central bank’s officials and they will not need to take imminent actions.

In addition, the jobless rate in the Euro zone as a whole probably remained steady at 11.8% in April. The official rate is due to be released at 9:00 GMT by Eurostat. Lower than expected unemployment rate would be supportive for the 18-nation common currency.

United Kingdom

Activity in United Kingdom’s sector of construction probably accelerated in May, with the corresponding PMI coming in at 61.0. In April the index stood at 60.8. Readings above the key level of 50.0 are indicative of expansion in the sector. Higher than projected values would be supportive for the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the results from its monthly survey at 8:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.8138, it will probably continue up to test 0.8154. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8166.

If EUR/GBP manages to breach the first key support at 0.8107, it will probably continue to slide and test 0.8098. With this second key support broken, the movement to the downside will probably continue to 0.8082.