Forex Market: EUR/PLN daily trading forecast

Friday’s trade saw EUR/PLN within the range of 4.1758-4.1843. The pair closed at 4.1799, gaining 0.10% on a daily basis.

At 7:28 GMT today EUR/PLN was up 0.08% for the day to trade at 4.1821. The pair touched a daily high at 4.1825 at 7:32 GMT.

Fundamentals

Euro zone

Manufacturing data by Markit

Spanish Manufacturing Purchasing Managers Index (PMI) probably showed a slight improvement in November, coming in at a reading of 52.7 from 52.6 in October. If so, this would be the highest index level since August, when the PMI stood at 52.8. It would also be the 12th consecutive month, when the PMI remains in the zone above 50.0, indicating optimism (increasing activity). The official reading is to be published at 8:13 GMT on Monday.

Activity in Italys sector of manufacturing was probably little changed in November, with the corresponding PMI rising to 49.4, as expected by experts. In October the PMI plunged to 49.0, which has been the lowest reading since May 2013, when the gauge was reported at 47.3. Markit Economics is expected to release the official data at 8:45 GMT.

Frances final manufacturing PMI probably remained in the zone of contraction during November, while confirming the preliminary PMI reading of 47.6, which was reported on November 20th. If confirmed, this would be the lowest PMI reading since August, when it was reported at 46.9. The official PMI is due out at 8:50 GMT.

The final reading of German manufacturing PMI probably confirmed the preliminary value for November, with the index coming in at 50.0. In October the final PMI stood at 51.4, down from a preliminary value of 51.8, or the highest level since August. Markit will release the official reading at 8:55 GMT.

The final manufacturing PMI in the Euro zone probably also confirmed the preliminary value in November, with the index remaining at 50.4. In October the final PMI was registered at 50.6. The PMI reflects the performance of the manufacturing sector in the Euro area and is based on a survey of 3 000 manufacturing companies. National data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These member states together account for almost 90% of Euro zones manufacturing activity. The Manufacturing Purchasing Managers Index is comprised by five individual indexes with the following weights: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stock of Items Purchased (10%), as the Delivery Times index is inverted, so that it moves in a comparable direction.

In case the final PMI readings exceeded expectations, the common currency would receive a boost. The official manufacturing data for the Euro region as a whole is scheduled to be released at 9:00 GMT.

Italian Gross Domestic Product – final estimate

The final estimate of Italys annual Gross Domestic Product (GDP) probably confirmed the preliminary estimate, pointing to a 0.4% contraction in the third quarter of the year, according to the median forecast by experts. In Q2 economy shrank at an annualized pace of 0.2%, according to final data, released on August 29th.

On a quarterly basis, Italian economy probably contracted 0.1% in Q3, matching the preliminary GDP estimate and following another negative growth rate of 0.2% during the second quarter. The last time Italian economy expanded was in the second quarter of 2011, when it grew 0.2%. According to provisional data by the National Institute of Statistics (Istat), on the production side, the agriculture and industrial sectors contributed negatively to economic growth in Q3, while in terms of demand, there was a negative contribution from domestic demand, which was partially offset by a positive contribution from exports.

In case a slower-than-projected rate of growth was reported, this would have a negative effect on the single currency. The National Institute of Statistics (Istat) will release the final GDP data for Q3 at 9:00 GMT.

ECB policy meeting in focus

On Friday it became clear that the annual harmonized consumer inflation in the Euro zone slowed down to a five-year low, which may urge the European Central Bank to expand its unprecedented stimulus program. Annual rate of inflation in the region was reported at 0.3% in November, which met expectations. Persistently low inflation is causing pressure on the central bank to expand its set of measures, which aim to stimulate economic activity. There is a chance that ECB President Mario Draghi may introduce more pessimistic forecasts in a statement following the meeting on policy, scheduled on December 4th. He has said he intends to raise inflation ”as fast as possible.”

On the other hand, ECB Vice President, Vitor Constancio, said earlier this week that the best moment to consider new measures is next quarter, when the impact of current measures can be gauged, Bloomberg reported.

The central bank has already begun purchasing covered bonds and asset-backed securities, as it projects to expand its balance sheet to the level it had at the beginning of 2012.

Poland

Manufacturing activity in Poland was probably little changed in November, with the respective Purchasing Managers Index (PMI) slipping to a reading of 51.0, according to expectations, from 51.2 in October. The latter has been the highest PMI value since April, when the indicator was registered at 52.0. Readings above the key level of 50.0 are indicative of optimism (expanding activity). The official PMI result is due out at 8:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 4.1800. In case EUR/PLN manages to breach the first resistance level at 4.1842, it will probably continue up to test 4.1885. In case the second key resistance is broken, the pair will probably attempt to advance to 4.1927.

If EUR/PLN manages to breach the first key support at 4.1757, it will probably continue to slide and test 4.1715. With this second key support broken, the movement to the downside will probably continue to 4.1672.

The mid-Pivot levels for today are as follows: M1 – 4.1694, M2 – 4.1736, M3 – 4.1779, M4 – 4.1821, M5 – 4.1864, M6 – 4.1906.

In weekly terms, the central pivot point is at 4.1827. The three key resistance levels are as follows: R1 – 4.1989, R2 – 4.2178, R3 – 4.2340. The three key support levels are: S1 – 4.1638, S2 – 4.1476, S3 – 4.1287.