Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.7944-0.7963 and closed at 0.7952.

At 6:52 GMT today EUR/GBP was gaining 0.11% for the day to trade at 0.7960. The pair touched a daily high at 0.7965 at 6:25 GMT, breaching the first key resistance.

Fundamental view

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 bank’s 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 nation’s currency.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.7962, it will probably continue up to test 0.7972. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7981.

If EUR/GBP manages to breach the first key support at 0.7943, it will probably continue to slide and test 0.7934. With this second key support broken, the movement to the downside will probably continue to 0.7924.