Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7922-0.7977. The pair closed at 0.7928, losing 0.42% on a daily basis.

At 7:22 GMT today EUR/GBP was up 0.01% for the day to trade at 0.7925. The pair touched a daily high at 0.7929.

Fundamentals

Euro zone

Spanish unemployment change

The number of the unemployed people in Spain probably increased by 21 300 in November, according to the median forecast by experts, following a gain by 79 200 during October. The latter has been the most significant monthly increase since January, when unemployed persons in the country were 113 100 more. An increase implies that consumer spending may be less active, while the latter is tightly related to economic growth. A decrease suggests the opposite. A larger-than-projected increase in unemployed people might have a bearish effect on the euro. The official data is due out at 8:00 GMT.

Euro zone producer prices

The annualized index of producer prices (PPI) probably fell 1.3% in October, according to market expectations, after a 1.4% decline in September. If so, this would be the highest level since July, when annualized producer inflation was recorded at -1.3%. The Producer Price Index measures changes in prices of goods and services either as they leave the production process, or as they enter it. Unlike the CPI, which measures price changes from the consumers perspective, the PPI basically gauges the prices received by domestic producers for their output, or the prices paid by domestic producers for their intermediate inputs. The PPI performance may be an early signal for inflationary pressure in economy. Generally speaking, a higher-than-expected PPI reading should be considered as having a bullish effect on the common currency, as it suggests accelerated consumer inflation, while a lower-than-expected result would have a bearish effect.

United Kingdom

Construction activity

Activity in United Kingdom’s sector of construction probably slowed down in November, with the corresponding PMI coming in at 61.0, down from 61.4 in October. The index is based on a survey, encompassing managers of companies, operating in construction sector. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify that activity in the sector has expanded. Lower-than-projected readings would mount selling pressure on the pound. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the official reading at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7942. In case EUR/GBP manages to breach the first resistance level at 0.7963, it will probably continue up to test 0.7997. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8018.

If EUR/GBP manages to breach the first key support at 0.7908, it will probably continue to slide and test 0.7887. With this second key support broken, the movement to the downside will probably continue to 0.7853.

The mid-Pivot levels for today are as follows: M1 – 0.7870, M2 – 0.7898, M3 – 0.7925, M4 – 0.7953, M5 – 0.7980, M6 – 0.8008.

In weekly terms, the central pivot point is at 0.7941. The three key resistance levels are as follows: R1 – 0.7984, R2 – 0.8015, R3 – 0.8058. The three key support levels are: S1 – 0.7910, S2 – 0.7867, S3 – 0.7836.