Yesterday’s trade saw EUR/GBP within the range of 0.7836-0.7925. The pair closed at 0.7838, losing 1.08% on a daily basis.
At 7:23 GMT today EUR/GBP was up 0.13% for the day to trade at 0.7848. The pair touched a daily high at 0.7851.
Fundamentals
Euro zone
French Business Climate
Business climate in France probably remained without change in December compared to November, according to market expectations, with the corresponding gauge being at 99.0. If so, this would be the highest reading since May, when the index was reported at 99.0. In October the gauge stood at 98.0. It reflects entrepreneurs’ sentiment about current business situation in the country and their expectations about business conditions. An index value of 100.0 suggests neutrality. Readings below 90.0 imply unusually high pessimism, while values above 110.0 suggest unusually high optimism among respondents in the survey. Higher-than-anticipated index readings may provide a limited support to the euro.
Euro zone Current Account
The surplus on Euro zones seasonally adjusted current account probably narrowed to EUR 28.0 billion in October from EUR 30.0 billion in September.
Regions current account (without a seasonal adjustment) produced a surplus at the amount of EUR 31.0 billion, or the largest since July, when a figure of EUR 32.8 billion was reported. An all-time high current account surplus was registered at EUR 32.91 billion in December 2013.
The current account reflects the difference between savings and investments in the Euro area. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).
A current account surplus indicates that the net foreign assets of the region have increased by the respective amount, while a deficit suggests the opposite. A country/region with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. A contracting surplus or an expanding deficit on the areas current account usually has a bearish effect on the euro.
The European Central Bank is expected to release the official data at 9:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7866. In case EUR/GBP manages to breach the first resistance level at 0.7897, it will probably continue up to test 0.7955. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7986.
If EUR/GBP manages to breach the first key support at 0.7808, it will probably continue to slide and test 0.7777. With this second key support broken, the movement to the downside will probably continue to 0.7719.
The mid-Pivot levels for today are as follows: M1 – 0.7748, M2 – 0.7793, M3 – 0.7837, M4 – 0.7882, M5 – 0.7926, M6 – 0.7971.
In weekly terms, the central pivot point is at 0.7906. The three key resistance levels are as follows: R1 – 0.7978, R2 – 0.8028, R3 – 0.8100. The three key support levels are: S1 – 0.7856, S2 – 0.7784, S3 – 0.7734.