fbpx

Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Forex Market: EUR/GBP daily trading forecast

Yesterday’s trade saw EUR/GBP within the range of 0.7402-0.7508. The daily low has also been the lowest level since February 2008. The pair closed at 0.7453, gaining 0.28% on a daily basis.

At 7:14 GMT today EUR/GBP was down 0.04% for the day to trade at 0.7451. The pair touched a daily low at 0.7436 at 6:50 GMT.

Fundamentals

United Kingdom

Gross Domestic Product – preliminary estimate

The preliminary estimate of United Kingdoms GDP probably showed that economy expanded at a rate of 2.8% during the fourth quarter of 2014 compared to the same period a year ago. If so, this would be the lowest annual rate of growth since Q3 2013, when the GDP expanded at a pace of 1.9%. UK economy grew at an annualized rate of 2.6% in the third quarter of 2014, according to final data. The latter was a revised down estimate from 3.0% (the 2nd GDP estimate), as business investment was lower and imports rose.

Business investment expanded 5.2% in Q3, down from a rate of 6.2%, as reported previously. Gross fixed capital formation rose 6.4% in Q3, slowing down from a 7.1% increase, as initially estimated. At the same time, the nations exports shrank 0.9% (up from -1.0% previously), while imports fell at an annualized rate of 1.4% (up from -2.4% previously), according to data by the Office for National Statistics. Household consumption increased at a final rate of 2.5% year-on-year in Q3, up from a 2.4% pace, as reported previously.

On a quarterly basis, the preliminary estimate of UK GDP probably showed a 0.6% growth during Q4 2014, after in Q3 economy expanded at a rate of 0.7%, according to final data, released on December 23rd. The final quarterly GDP estimate confirmed the preliminary and the 2nd estimates.

The GDP represents the total monetary value of all goods and services produced by the nation over a specific period of time. What is more, it is the widest indicator of economic activity in the country. The report on GDP is of huge importance for traders, operating in the Foreign Exchange Market, because they will look for higher rates of growth as a sign that interest rates may follow the same direction. Higher interest rates will usually attract more investors, willing to purchase assets in the UK, while, at the same time, this will increase demand for the pound. Therefore, in case growth rate exceeded market expectations, this would provide support to the local currency. The Office for National Statistics is expected to release the preliminary GDP estimate at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7454. In case EUR/GBP manages to breach the first resistance level at 0.7507, it will probably continue up to test 0.7560. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7613.

If EUR/GBP manages to breach the first key support at 0.7401, it will probably continue to slide and test 0.7348. With this second key support broken, the movement to the downside will probably continue to 0.7295.

The mid-Pivot levels for today are as follows: M1 – 0.7322, M2 – 0.7375, M3 – 0.7428, M4 – 0.7481, M5 – 0.7534, M6 – 0.7587.

In weekly terms, the central pivot point is at 0.7539. The three key resistance levels are as follows: R1 – 0.7650, R2 – 0.7825, R3 – 0.7936. The three key support levels are: S1 – 0.7364, S2 – 0.7253, S3 – 0.7078.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News