Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7118 – 0.7073 to settle 0.4% higher at 0.7102, snapping two days of losses.

At 07:36 GMT today EUR/GBP was up 0.15% for the day to trade at 0.7112. The pair held in a daily range of 0.7098 – 0.7114 and is up 0.3% for the week so far, following three straight weekly losses.

Fundamentals

Eurozone

Spains services sector registered slower activity growth in June, with the respective Purchasing Managers Index easing down to 56.1 from 58.4 in May, also below analysts median projection for 58.0.

Activity in Italys sector of services probably expanded at the same pace in June compared to the previous month, with the corresponding PMI projected by experts to come in at a reading of 52.5. Markit Economics will release the report at 07:45 GMT.

Frances services sector probably remained in the zone of expansion for a fifth consecutive month in June, with the final services PMI expected to match a preliminary estimate of 54.1 released on June 23rd. If confirmed, this would be the highest PMI reading since August 2011, when the gauge was reported at 56.8. In May, the final services PMI was registered at 52.8. The official reading is due out at 07:50 GMT.

Germanys June services PMI will probably also confirm its preliminary estimate, which pegged the index at 54.2. In May, the final services PMI was registered at 53.0.

The final services PMI in the Eurozone as a whole will probably come in at 54.4, matching June 23rds flash reading. 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 any of the above mentioned PMIs would support demand for the common currency. The official reading is scheduled to be released at 08:00 GMT.

Meanwhile, annualized retail sales in the euro region as a whole probably rose 2.3% in May, according to the median forecast by experts, after in April sales climbed at a pace of 2.2%. If so, this would be the 17th consecutive period of growth. In monthly terms, retail sales probably inched up 0.1%, following a 0.7% gain in April. 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 09:00 GMT.

United Kingdom

Activity in the United Kingdom’s sector of services probably increased in June as well, with the corresponding PMI expected to register at 57.4, up from 56.5 in the prior month. If so, this would be the 30th 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 Procurement & Supply (CIPS) is to announce the official reading at 08:30 GMT.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 0.7098. In case it penetrates the first resistance level at 0.7122, it will encounter next resistance at 0.7143. If breached, upside movement may attempt to advance to 0.7167.

If the cross drops below its S1 level at 0.7077, it will next see support at 0.7053. If the second key support zone is breached, downward movement may extend to 0.7032.

In weekly terms, the central pivot point is at 0.7125. The three key resistance levels are as follows: R1 – 0.7177, R2 – 0.7267, R3 – 0.7319. The three key support levels are: S1 – 0.7035, S2 – 0.6983, S3 – 0.6893.