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Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7256-0.7290. The pair closed at 0.7276, losing 0.05% on a daily basis.

At 8:07 GMT today EUR/GBP was up 0.02% for the day to trade at 0.7276. The pair touched a daily high at 0.7281 at 7:10 GMT.

Fundamentals

Euro area

Services PMI by Markit – final estimate

The final services PMI in the Euro area probably confirmed the preliminary value for February, with the index remaining at 53.9. If so, this would be the highest PMI level since July 2014, when the gauge was reported at a final 54.2. It would also be the 19th consecutive month, during which the index inhabited the area above 50.0. In January the index came in at 52.7, according to final data. The Purchasing Managers Index is based on a monthly survey, encompassing a sample of approximately 2 000 business entities, which represents private sector conditions in terms of new orders, output, employment, prices etc. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. Readings above the key level of 50.0 indicate optimism (increasing activity). Higher-than-expected values of the PMI would support demand for the common currency. The final reading is scheduled to be released at 9:00 GMT.

Retail Sales

Annualized retail sales in the Euro region as a whole probably rose 1.9% in January, according to the median forecast by experts, after in December sales climbed at a pace of 2.8%. The latter has been the fastest annual sales growth rate since March 2007. If so, January 2015 would be the 13th consecutive period of growth. In monthly terms, retail sales probably remained flat during January, following a 0.3% gain in December. This is a short-term indicator, which provides key information about consumer spending trend on a national scale. In case the index of retail sales rose at a faster-than-projected pace, this would have a bullish effect on the euro. Eurostat is expected to publish the official data at 10:00 GMT.

United Kingdom

Services sector activity

Activity in United Kingdom’s sector of services probably increased in February, with the corresponding PMI coming in at 57.5, up from 57.2 in the prior month. If so, this would be the 26th consecutive month, when the gauge remained in the area above 50.0. The index is based on a survey, encompassing managers of companies, that operate in sectors such as transportation, communications, IT, financial intermediation, tourism. 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. A larger-than-projected improvement in the index would certainly boost the appeal of 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 0.7274. In case EUR/GBP manages to breach the first resistance level at 0.7292, it will probably continue up to test 0.7308. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7326.

If EUR/GBP manages to breach the first key support at 0.7258, it will probably continue to slide and test 0.7240. With this second key support broken, the movement to the downside will probably continue to 0.7224.

The mid-Pivot levels for today are as follows: M1 – 0.7232, M2 – 0.7249, M3 – 0.7266, M4 – 0.7283, M5 – 0.7300, M6 – 0.7317.

In weekly terms, the central pivot point is at 0.7302. The three key resistance levels are as follows: R1 – 0.7361, R2 – 0.7469, R3 – 0.7528. The three key support levels are: S1 – 0.7194, S2 – 0.7135, S3 – 0.7027.

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