Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.7944-0.7980 and closed at 0.7972.

At 6:55 GMT today EUR/GBP was gaining 0.06% for the day to trade at 0.7976. The pair touched a daily high at 0.7978 at 6:50 GMT.

Fundamental view

Euro zone

The ZEW economic sentiment in Germany probably deteriorated to 28.0 this month, according to the median experts’ forecast. In June, the index came in at 29.8, which was the weakest since December 2012.

The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published monthly. The study involves 350 financial experts. The indicator reflects the difference between the share of analysts that are optimistic and those that are pessimistic about the expected economic development in Germany over the next six months. A positive figure indicates that the proportion of optimists is larger than that of the pessimists.

In addition, the ZEW economic sentiment index in the Euro zone probably jumped to 62.3 this month, according to the median analysts’ estimate. In June, the index came in at 58.4.

Higher-than-projected readings would certainly provide support to the 18-nation common currency. The official data is to be released at 9:00 GMT.

United Kingdom

The cost of living in the UK probably rose 1.6% in June from a year ago, according to the median analyst’ estimate. The Consumer Price Index (CPI) is the main measure of inflation in the UK for macroeconomic purposes and forms the basis of the inflation target set by the government. Every month about 120 000 samples are made, examining the change in prices of about 650 products. They represent the “market basket” of goods and services to the index itself. This is the percentage change compared to the same month a year earlier.

Core consumer prices probably increased 1.7% in June, compared to the same month a year ago, following a 1.6% gain in the previous month. The core CPI, measures the change in prices of goods and services purchased by consumers, as they are taken out volatile components such as food, energy products, alcohol and tobacco. This is the percentage change compared to the same month a year earlier.

The Office for National Statistics will publish the official figures at 08:30 GMT. Better-than-expected readings will provide support to the sterling.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.7987, it will probably continue up to test 0.8001. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8023.

If EUR/GBP manages to breach the first key support at 0.7951, it will probably continue to slide and test 0.7929. With this second key support broken, the movement to the downside will probably continue to 0.7915.