Forex Market: EUR/GBP trading forecast for Monday

During Friday’s trading session EUR/GBP traded within the range of 0.7904-0.7934 and closed at 0.7916, adding 0.07% for the day, but losing 0.45% on a weekly basis.

Fundamental view

Euro zone

Annualized Producer Price Index (PPI) in Germany probably climbed to -0.7% in June, according to the median forecast by experts, from -0.8% in May. The index reflects the change in prices of a sample of products, sold by manufacturers during the respective period.

The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the country. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. In case the PPI improved more than projected, this would have a bullish effect on the euro. Statistisches Bundesamt Deutschland is to release the official data at 6:00 GMT on Monday (July 21st).

United Kingdom

Rightmove is expected to release official data on its UK house price index for July at 23:01 GMT on Sunday. In June, UK house prices jumped 7.7% compared to the same period ago.

The index presents the results of a monthly survey of real estate prices announced by vendors. It observes the changes in house prices on a monthly and annual basis, providing an overview of the current state of the property market in England and Wales. The index is published on Rightmove.co.uk. This is the percentage change in the index over the corresponding month a year earlier.

Technical view

The central pivot point is estimated at 0.7918. According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.7932, it will probably continue up to test 0.7948. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7962.

If EUR/GBP manages to breach the first key support at 0.7902, it will probably continue to slide and test 0.7888. With this second key support broken, the movement to the downside will probably continue to 0.7872.