Forex Market: EUR/GBP daily trading forecast

Friday’s trade saw EUR/GBP within the range of 0.7781-0.7828. The pair closed at 0.7811, losing 0.05% on a daily basis.

At 7:45 GMT today EUR/GBP was up 0.09% for the day to trade at 0.7821. The pair touched a daily high at 0.7825 at 6:10 GMT.

Fundamentals

ECB easing

According to a person, who attended a meeting of the European Central Banks Governing Council last week, the banks staff have provided policy makers with models, including the purchasing of investment-grade assets at the amount of as much as 500 billion euros ($593 billion). Some of the options, presented to policy makers on January 7th, pointed to government bonds, including the purchases of only AAA rated debt or bonds rated at least BBB minus, Bloomberg reported.

Earlier in January the ECB President Mario Draghi stressed that measures should be taken against the risk of deflationary processes occurring, even if that risk is limited.

EUR/USD projections

According to UBS, the euro may depreciate to $1.10, due to the banks optimistic outlook over the US economy, which would be supported by consumers expenditures amid falling prices of oil.

Goldman Sachs Group Inc., on the other hand, now projects that the euro may reach parity with the US dollar by 2016, as the ECB will probably reveal an easing program at the upcoming policy meeting, scheduled on January 22nd. In addition, Goldman expects that the EUR/USD cross may fall to 1.11 within six months.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7807. In case EUR/GBP manages to breach the first resistance level at 0.7832, it will probably continue up to test 0.7854. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7879.

If EUR/GBP manages to breach the first key support at 0.7785, it will probably continue to slide and test 0.7760. With this second key support broken, the movement to the downside will probably continue to 0.7738.

The mid-Pivot levels for today are as follows: M1 – 0.7749, M2 – 0.7773, M3 – 0.7796, M4 – 0.7820, M5 – 0.7843, M6 – 0.7867.

In weekly terms, the central pivot point is at 0.7812. The three key resistance levels are as follows: R1 – 0.7876, R2 – 0.7942, R3 – 0.8006. The three key support levels are: S1 – 0.7746, S2 – 0.7682, S3 – 0.7616.