Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.7874-0.7910 and closed at 0.7900.

At 6:16 GMT today EUR/GBP was losing 0.06% for the day to trade at 0.7895. The pair touched a daily low at 0.7894 at 6:01 GMT. Yesterday, the pair touched 0.7874, the weakest level since August 22nd 2012.

Fundamental view

Euro zone

The preliminary value of the compound index of economic sentiment (ESI) for the Euro zone probably worsened to a reading of -7.5 during the current month from -7.4 in June. This survey precedes the final reading by two weeks. A larger than projected improvement in the index would provide support to the single currency.

The European Commission is due to publish an official report at 14:00 GMT.

United Kingdom

The number of approved loans for house purchases in the country probably decreased to 41 375 in June from 41 757 in the preceding month. The British Bankers’ Association will release the official figure at 8:30 GMT.

The indicator is closely watched by traders and other market players as it can be seen as a gauge of the health of the British housing market. The indicator includes more than 50% of the total mortgage market in the UK.

In case, the number of approved mortgages falls less than expected, this would boost sterling’s demand.

In addition, also at 8:30 GMT Bank of England is to release the minutes of its policy meeting on July 10th. All nine members of the Monetary Policy Committee (MPC) probably voted unanimously in favor of keeping the benchmark interest rate and the monthly scale of stimulus unchanged. Upon the release of the minutes market volatility is usually high.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7895. In case EUR/GBP manages to breach the first resistance level at 0.7915, it will probably continue up to test 0.7931. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7951.

If EUR/GBP manages to breach the first key support at 0.7879, it will probably continue to slide and test 0.7859. With this second key support broken, the movement to the downside will probably continue to 0.7843.