Yesterday’s trade saw EUR/GBP within the range of 0.7917-0.7943. The pair closed at 0.7939, gaining 0.28% on a daily basis.
At 7:13 GMT today EUR/GBP was down 0.07% for the day to trade at 0.7935. The pair touched a daily low at 0.7934 at 7:12 GMT.
Fundamentals
Euro zone
French Consumer confidence
Confidence among consumers in France probably remained unchanged, with the respective index coming in at a reading of 85.0 in November, according to the median forecast by experts. If confirmed, this would be the third consecutive month, during which the gauge remains at this level.
The index of consumer confidence is based on a survey, encompassing about 2 000 households. Respondents give their opinion regarding past and future economic situation in France, past and future personal financial situation, unemployment, intention to make major purchases, current savings capacity and expected savings capacity.
The indicator is calculated using factor analysis technique. The index is then calculated in a way to measure the current confidence compared to the historic index values during the period 1987-2011. If the gauge shows a reading over 110, this suggests that optimism is higher than normal. If the index shows a reading under 90, this implies that pessimism is higher than normal. Readings of 100.0 signify neutrality.
Improving confidence is related with greater willingness to spend, therefore, higher than projected values may provide support to the euro. The National Institute of Statistics and Economic Studies (INSEE) is to publish the official data at 7:45 GMT.
Italian Consumer confidence
Confidence among consumers in Italy was probably little changed in November, with the respective index coming in at a reading of 101.6, according to market expectations, from 101.4 in October. The latter has been the lowest value since February, when the gauge was reported at 97.7.
The index of consumer confidence is based on a survey, conducted by phone and encompassing about 2 000 households in the country. Respondents give their opinion regarding past and future economic situation in Italy, past and future personal financial situation, unemployment, intention to make major purchases such as durable goods, and saving prospects. Readings of 100.0 indicate neutrality (no change in sentiment). Values above 100.0 signify improving confidence, while values below 100.0 are indicative of low expectations. Higher-than-expected index readings might have a bullish impact on the common currency. The official reading is due out at 9:00 GMT.
United Kingdom
Gross Domestic Product – second estimate
The second estimate of United Kingdoms GDP probably confirmed the preliminary estimate, released on October 24th, that economy expanded at a rate of 3.0% during the third quarter of the year compared to the same period a year ago. UK economy grew at an annualized rate of 3.2% in the second quarter of the current year, or the fastest annual rate of growth since Q3 2007, when the GDP rose 3.3%.
According to the preliminary data, agriculture output rose 0.9% year-on-year in Q3. Industrial production expanded 2.2%, supported by a 6.1% increase in electricity, gas, steam and air production. Mining activity shrank 1.8%, manufacturing activity expanded 3.4%, while construction output rose 3.0% during the quarter. The sector of services grew 3.3% year-on-year, mostly due to a 4.3% surge in business and financial activities and a 3.8% increase in distribution, hotels and restaurants, according to the Office for National Statistics (ONS).
On a quarterly basis, the second estimate of UK GDP probably also matched the first estimate of a 0.7% growth during Q3, following a 0.9% expansion during the second quarter.
The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. What is more, it is the widest indicator of economic activity in the country. The report on GDP is of huge importance for traders, operating in the Foreign Exchange Market, as they will usually look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will usually attract more investors, willing to purchase assets in the UK, while, at the same time, this will increase demand for the pound. Therefore, in case growth rate exceeded market expectations, this would provide support to the local currency. The Office for National Statistics is expected to release the second (revised) GDP estimate at 9:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7933. In case EUR/GBP manages to breach the first resistance level at 0.7949, it will probably continue up to test 0.7959. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7975.
If EUR/GBP manages to breach the first key support at 0.7923, it will probably continue to slide and test 0.7907. With this second key support broken, the movement to the downside will probably continue to 0.7897.
The mid-Pivot levels for today are as follows: M1 – 0.7902, M2 – 0.7915, M3 – 0.7928, M4 – 0.7941, M5 – 0.7954, M6 – 0.7967.
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.
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