Forex Market: EUR/GBP daily trading outlook

Yesterday’s trade saw EUR/GBP within the range of 0.7849-0.7818. The pair closed at 0.7836, losing 0.06% on a daily basis.

At 7:38 GMT today EUR/GBP was up 0.06% for the day to trade at 0.7840. The cross held in a daily range of 0.7829-0.7844.

Fundamentals

Eurozone

Destatis reported that Germanys Wholesale Price Index fell by 0.7% on an annual basis in October, following a 0.9% contraction in September.

In monthly terms, prices of goods sold by wholesalers surprisingly dropped 0.6%, defying analysts projections for a gain of 0.2% following Septembers 0.1% increase. This index is considered as a leading indicator of consumer inflation.

Annualized industrial output in the Eurozone probably decreased for a second month at a pace of 0.2%, following up on a 1.9% contraction in August. Month-on-month, activity in the industrial sector likely grew 1%, reversing a 1.8% contraction in August.

The index, reflecting business cycle, measures the change in the overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output expanded more than anticipated, this would support demand for the euro. Eurostat is to publish the official data at 10:00 GMT.

United Kingdom

The rate of unemployment in the UK probably fell to 5.9% in September from 6.0% a month earlier, the Office for National Statistics is expected to report at 09:30 GMT. If confirmed, this would be the lowest in six years.

At the same time, the Claimant Count Change, which represents the change in the number of unemployed people during the respective month, will probably show a decline of 24 900 in October, compared to -18 600 in September.

The statistics agency is also projected to report that the Average Earnings + Bonus index rose 0.9% in September, following a 0.7% gain in August. If confirmed, this would be the fastest pace of growth since March.

Meanwhile, Average Earnings ex Bonus probably rose by 1.1%, according to analysts forecasts, adding to Augusts 0.9% growth. This would be the highest gain since March as well.

Later in the day, at 10:30 GMT, Bank of England is scheduled to publish its report, containing inflation rate and economic growth projections in regard to the next two years. In case the report shows a hawkish outlook, this usually provides support to the national currency, while a dovish outlook usually has a bearish effect on the pound.

Pivot points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7834. In case EUR/GBP manages to breach the first resistance level at 0.7851, it may continue up to test 0.7865. With the second key resistance broken, the pair could attempt to advance to 0.7882.

If EUR/GBP manages to breach the first key support at 0.7820, it may continue to slide and test 0.7803. With this second key support broken, movement to the downside may continue to 0.7789.

The mid-pivot levels for today are as follows: M1 – 0.7796, M2 – 0.7812, M3 – 0.7827, M4 – 0.7843, M5 – 0.7858, M6 – 0.7874.

In weekly terms, the central pivot point is at 0.7836. The three key resistance levels are as follows: R1 – 0.7877, R2 – 0.7908, R3 – 0.7949. The three key support levels are: S1 – 0.7805, S2 – 0.7764, S3 – 0.7733.