Forex Market: EUR/GBP daily trading forecast

Friday’s trade saw EUR/GBP within the range of 0.7903-0.8006. The pair closed at 0.7914, losing 0.95% on a daily basis.

At 7:22 GMT today EUR/GBP was down 0.05% for the day to trade at 0.7911. The pair touched a daily low at 0.7903 during early Asian trade.

Fundamentals

Euro zone

German IFO Business Climate

Business climate in Germany probably remained almost unchanged in November, with the respective gauge rising to 103.4 from 103.2 in September. The latter has been the lowest index reading since December 2012, when it was reported at 102.4.

The IFO Business Climate Index reflects entrepreneurs’ sentiment in regard to current business situation and their expectations for the next six months. The index is based on a survey, conducted by phone and encompasses 7 000 companies, that operate in sectors such as manufacturing, construction, wholesaling and retailing industry. The Business Climate Balance represents the difference between the percentage share of respondents that are optimistic and the share of respondents that are pessimistic. The balance can fluctuate between -100, which suggests all responding companies assess their situation as poor and expect business conditions to deteriorate, and +100, which suggests all responding companies assess their situation as good and expect an improvement in business conditions. In order to calculate the IFO Business Climate Index, the Balance is normalized to the average of a base year, which currently is 2005.

The IFO Business Climate Index is comprised by two equally-weighted sub-indexes – a gauge of expectations and a gauge of current assessment. The IFO expectations index probably rose to 98.5 in November from 98.3 in October, as the latter has been the lowest since December 2012. The IFO current assessment index probably slipped to 108.2 in the current month from 108.4 in October. If so, this would be the lowest index level since April 2013. In case any of the gauges registered a larger-than-projected increase, this might have a bullish effect on the common currency.

The CESifo Group is to release the official numbers at 9:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7941. In case EUR/GBP manages to breach the first resistance level at 0.7979, it will probably continue up to test 0.8044. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8082.

If EUR/GBP manages to breach the first key support at 0.7876, it will probably continue to slide and test 0.7838. With this second key support broken, the movement to the downside will probably continue to 0.7773.

The mid-Pivot levels for today are as follows: M1 – 0.7806, M2 – 0.7857, M3 – 0.7909, M4 – 0.7960, M5 – 0.8012, M6 – 0.8063.

In weekly terms, the central pivot point is at 0.7953. The three key resistance levels are as follows: R1 – 0.8003, R2 – 0.8092, R3 – 0.8142. The three key support levels are: S1 – 0.7864, S2 – 0.7814, S3 – 0.7725.

As seen on the daily chart, the outlook for the pair remains bullish, because there have been two unsuccessful attempts for a breach below the low of September 29th – the first one on September 30th and the second – on November 9th. With two failed attempts to make one and the same thing already present, the market usually does the opposite!