Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7802-0.7857. The pair closed at 0.7815, losing 0.26% on a daily basis.

At 7:16 GMT today EUR/GBP was down 0.03% for the day to trade at 0.7814. The pair touched a daily low at 0.7811 at 7:01 GMT.

Fundamentals

United Kingdom

Balance of trade

The deficit on United Kingdom’s goods trade balance probably narrowed to GBP 9.40 billion in November, according to market expectations, from a deficit figure of GBP 9.62 billion during the preceding month. If so, this would be the smallest trade deficit since August, when a gap of GBP 8.95 billion was reported.

This indicator is also known as visible trade balance, because it reflects the difference in value between exported and imported physical goods, without the inclusion of exported and imported services. Since UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the resilience of nation’s economic growth.

The gap on the nations total trade balance shrank to GBP 2.04 billion in October from a revised GBP 2.80 billion deficit, posted in September. Octobers deficit has been the least since March, due to a fall in fuel imports and higher sales of silver. Total exports of goods and services amounted to GBP 41.99 billion in October, while total imports were at the amount of GBP 44.01 billion.

Exports of goods rose by GBP 0.2 billion to reach GBP 24.3 billion in October. The largest increase was attributed to exports of erratic items, silver exports in particular, which rose from GBP 0.1 billion in September to GBP 0.3 billion in October, according to the report by the Office for National Statistics (ONS). Imports of goods dropped by GBP 0.7 billion in October, mostly due to a GBP 0.9 billion fall in imports of fuels.

In case UK trade decifit shrank more than anticipated, this would provide support to the pound. The Office for National Statistics will publish the official trade data at 9:30 GMT.

Industrial production

Annualized industrial production in the United Kingdom probably expanded 1.6% in November, following a 1.1% gain during the preceding month. If so, this would be the fastest production growth rate since August, when activity grew 2.2%. In monthly terms, industrial production probably increased 0.2% in November, following a 0.1% dip in October. The index measures the change in the total inflation-adjusted value of production in sectors such as manufacturing, mining and energetics.

United Kingdom’s annualized manufacturing production, a short-term indicator which accounts for almost 80% of nation’s industrial output, probably expanded 2.3% in November. In October manufacturing output rose at an annualized pace of 1.7%, or the least since December 2013, when a growth rate of 1.4% was registered. In monthly terms, production probably increased 0.3% during November, according to expectations. As it is a key component of the country’s Gross Domestic Product, in case manufacturing production expanded more than projected, this would have a bullish effect on the sterling. The Office for National Statistics (ONS) will release the official industrial data at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7825. In case EUR/GBP manages to breach the first resistance level at 0.7847, it will probably continue up to test 0.7880. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7902.

If EUR/GBP manages to breach the first key support at 0.7792, it will probably continue to slide and test 0.7770. With this second key support broken, the movement to the downside will probably continue to 0.7737.

The mid-Pivot levels for today are as follows: M1 – 0.7754, M2 – 0.7781, M3 – 0.7809, M4 – 0.7836, M5 – 0.7864, M6 – 0.7891.

In weekly terms, the central pivot point is at 0.7810. The three key resistance levels are as follows: R1 – 0.7877, R2 – 0.7924, R3 – 0.7991. The three key support levels are: S1 – 0.7763, S2 – 0.7696, S3 – 0.7649.