Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7030-0.7147. The pair closed at 0.7146, surging 1.15% on a daily basis, or the first gain in eight trading days.

At 7:45 GMT today EUR/GBP was down 0.34% for the day to trade at 0.7123. The pair touched a daily low at 0.7115 at 7:05 GMT.

Fundamentals

Euro area

Italian Consumer Inflation – final estimate

Italys final annualized consumer inflation was probably at -0.2% in February, matching the preliminary inflation estimate, reported on February 27th. In January the final annualized index of consumer prices (CPI) fell 0.6%, confirming the preliminary CPI estimate. It has been the lowest level since 1958, when the national institute of statistics began publishing the inflation rate. According to provisional data, in February the largest annual price drop was reported for energy costs (-8.5%). Additional downward pressure came from costs of transportation (-3.1% year-on-year), housing, water, electricity and gas (-1.4%) and recreation and culture (-0.2%).

At the same time, consumers paid more for restaurants and hotels (+1.0% year-on-year), health (+0.4%), furnishings and household equipment (+0.3%) and clothing and footwear (+0.2%).

Key categories, included in Italys Consumer Price Index, are food and non-alcoholic beverages (accounting for 16% of total weight), transport (15%), restaurants and hotels (11%) and housing, water, electricity and other fuels (10%). Other categories are clothing and footwear (9%), furnishing and household equipment (8%), recreation and culture (8%) and health (also 8%). Communication, education, alcoholic beverages, tobacco and other goods and services comprise the remaining 15% of the index.

The nations final annualized CPI, evaluated in accordance with the harmonized methodology, probably increased 0.1% in February, according to market expectations. If so, this would match the preliminary HICP estimate, reported on February 27th. In January the final annualized HICP dropped at a pace of 0.5%, down from a 0.4% drop, as pointed by the provisional estimate. The National Institute of Statistics (Istat) is to release the official CPI report at 9:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7108. In case EUR/GBP manages to breach the first resistance level at 0.7185, it will probably continue up to test 0.7225. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7302.

If EUR/GBP manages to breach the first key support at 0.7068, it will probably continue to slide and test 0.6991. With this second key support broken, the movement to the downside will probably continue to 0.6951.

The mid-Pivot levels for today are as follows: M1 – 0.6971, M2 – 0.7030, M3 – 0.7088, M4 – 0.7147, M5 – 0.7205, M6 – 0.7264.

In weekly terms, the central pivot point is at 0.7231. The three key resistance levels are as follows: R1 – 0.7284, R2 – 0.7356, R3 – 0.7409. The three key support levels are: S1 – 0.7159, S2 – 0.7106, S3 – 0.7034.