Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7866-0.7806. The pair closed at 0.7815, losing 0.32% on a daily basis.

At 7:30 GMT today EUR/GBP was up 0.12% for the day to trade at 0.7823. The cross held in a daily range of 0.7808-0.7864.

Fundamentals

Eurozone

German factory orders, an indicator gauging the change in the total value of new purchase orders placed for durable and non-durable goods, rose 0.8% in September on a monthly basis, underperforming analysts expectations for a 2.3% jump. Augusts reading received an upward revision to show a 4.2% contraction from initially estimated at -5.7%.

Factory orders are considered as a key indicator for analyzing the short-term trend in production in Germany. In case the gauge gained more than projected, this would have a bullish impact on the euro, and vice versa.

Market participants also eyed ECBs interest rate decision, due at 12:45 GMT, which is largely expected to introduce no policy changes.

United Kingdom

A survey by Halifax Bank of Scotland (HBOS), the largest mortgage lender in the United Kingdom, may show that home values rose at an annualized pace of 9.1% last month, according to preliminary estimates. In September prices of homes, purchased with loans from the bank, climbed 9.6% on annual basis.

In monthly terms, prices probably rose 0.4% in October, following another 0.6% increase during the previous period. A higher-than-projected rate of increase would be considered as a bullish signal for the sterling. The official values will be released at 8:00 GMT.

Annualized industrial output in the United Kingdom probably expanded 1.5% in September, following a 2.5% gain during the preceding month, which would be the 13th straight month of expansion.

In monthly terms, industrial production probably increased 0.4% in September after remaining flat a month earlier. The index presents the change in the total inflation-adjusted value of production in sectors such as manufacturing, mining and energetics.

The United Kingdom’s annualized manufacturing production, a short-term indicator which accounts for almost 80% of nation’s industrial output, probably expanded 2.8% in September. In August manufacturing output rose at an annualized pace of 3.9%, the fastest since April.

In monthly terms, production probably increased 0.3%, accelerating from a 0.1% growth in August. As it is a key component of the country’s Gross Domestic Product, in case manufacturing production expanded more than projected, this would have a bullish effect on the sterling. The Office for National Statistics (ONS) will release the official industrial data at 9:30 GMT.

Market players also awaited the outcome of Bank of Englands interest rate decision.

At 12:00 GMT, Bank of England is to announce its decision on monetary policy. The benchmark interest rate (repo rate) will probably be left unchanged at the record low level of 0.50%.

At the same time, BoE’s monetary stimulus will probably be left without change as well, at 375 billion GBP. In case the scale of monetary stimulus is increased (in order to further spur economic growth), this will usually devalue the local currency.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7829. In case EUR/GBP manages to breach the first resistance level at 0.7852, it may continue up to test 0.7889. With the second key resistance broken, the pair could attempt to advance to 0.7912.

If EUR/GBP manages to breach the first key support at 0.7792, it may continue to slide and test 0.7769. With this second key support broken, movement to the downside may continue to 0.7732.

The mid-pivot levels for today are as follows: M1 – 0.7751, M2 – 0.7781, M3 – 0.7811, M4 – 0.7841, M5 – 0.7871, M6 – 0.7901.

In weekly terms, the central pivot point is at 0.7856. The three key resistance levels are as follows: R1 – 0.7891, R2 – 0.7953, R3 – 0.7988. The three key support levels are: S1 – 0.7794, S2 – 0.7759, S3 – 0.7697.