Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.8198-0.8217 and closed at 0.8208.

At 6:20 GMT today EUR/GBP was gaining 0.2% for the day to trade at 0.8222. The pair touched a daily high at 0.8222 at 6:15 GMT, breaching the first resistance level of 0.8217.

Fundamental view

Euro zone

The advance manufacturing Purchasing Managers Index (PMI) in the euro zone will probably remain unchanged at 53.0 in April, matching Marchs reading, according to the median estimate by experts. The index is based on a monthly survey, which includes carefully selected companies that are representative of the state of the private sector in the economy and track the changes in production, new orders, market share, employment and prices in the manufacturing sector. The PMI is the first economic indicator for each month, providing information on the changing economic conditions, significantly earlier than the official state statistics. It is presented as a scale from 1 to 100. Readings above 50 are connected with a positive outlook for economic growth. Conversely, values below 50 indicate a less optimistic forecast. This is a preliminary value of the indicator.

The advance services PMI probably improved to 52.5 in April from 52.2 in the previous month, according to the median analyst estimate. The index is also based on a monthly survey, and shares the same characteristics with the manufacturing PMI, with the only difference that it measures economic activity in the services sector. This is a preliminary assessment of the indicator.

Markit Economics is scheduled to release an official report at 08:00 GMT. Higher-than-expected readings would provide support for the euro.

United Kingdom

The minutes of Bank of England will probably show that central banks policy makers were unanimous in keeping the interest rate unchanged at record low 0.5% at their last policy meeting on April 10. The Bank of England was given the responsibility of determining the basic interest rates in 1998, in order to meet the challenges posted by the government inflation target. Decisions are taken by the Monetary Policy Committee of the central bank. The Committee consists of nine members and meets monthly. Minutes are usually published on Wednesday, two weeks after the policy meeting. The format of voting is number of members that voted for an increase of borrowing costs, number of members that wanted a reduction and the total number of members, that have voting rights. If the minutes reveal the members werent unanimous in taking the decision, this would heighten the appeal of the pound as it can be an early indication that borrowing costs may be raised sooner-than-projected.

Bank of England is scheduled to release the minutes from its last meeting at 08:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.8217, it will probably continue up to test 0.8227. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8236.

If EUR/GBP manages to breach the first key support at 0.8198, it will probably continue to slide and test 0.8189. With this second key support broken, the movement to the downside will probably continue to 0.8179.