Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7445-0.7513. The pair closed at 0.7488, gaining 0.20% on a daily basis.

At 8:04 GMT today EUR/GBP was down 0.25% for the day to trade at 0.7470. The pair touched a daily low at 0.7469 at 8:03 GMT.

Fundamentals

United Kingdom

Balance of trade

The deficit on United Kingdom’s goods trade balance probably widened to GBP 9.100 billion in December, according to market expectations, from a deficit figure of GBP 8.848 billion during the preceding month. The latter has been the smallest trade deficit since April, when a gap of GBP 8.812 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 1.4 billion in November from a revised GBP 2.2 billion deficit, posted in October. Novembers deficit has been the lowest since June 2013, due to a fall in imports, supported by lower oil prices.

Between October and November last year exports of goods were down by GBP 0.1 billion to reach GBP 24.4 billion. The decline was mainly attributed to lower oil exports (down by GBP 0.2 billion), according to the report by the Office for National Statistics (ONS). Outside the EU, goods exports rose by GBP 0.1 billion. At the same time, imports of goods dropped by GBP 1.1 billion to GBP 33.2 billion during November compared to October, as imports of oil fell by GBP 0.7 billion. Almost all of the decrease in fuel imports was attributed to trade with countries outside the European Union.

In case UK trade deficit widened more than anticipated, this would have a bearish effect on the pound. The Office for National Statistics will publish the official trade data at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7482. In case EUR/GBP manages to breach the first resistance level at 0.7519, it will probably continue up to test 0.7550. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7587.

If EUR/GBP manages to breach the first key support at 0.7451, it will probably continue to slide and test 0.7414. With this second key support broken, the movement to the downside will probably continue to 0.7383.

The mid-Pivot levels for today are as follows: M1 – 0.7399, M2 – 0.7433, M3 – 0.7467, M4 – 0.7501, M5 – 0.7535, M6 – 0.7569.

In weekly terms, the central pivot point is at 0.7477. The three key resistance levels are as follows: R1 – 0.7553, R2 – 0.7614, R3 – 0.7690. The three key support levels are: S1 – 0.7416, S2 – 0.7340, S3 – 0.7279.