Forex Market: EUR/GBP daily trading outlook

Yesterday’s trade saw EUR/GBP within the range of 0.6980-0.7028. The pair closed at 0.7017, going up 0.30% on a daily basis. It has been the first gain in the past five trading days. The daily low was a higher-low test of the low from November 18th.

At 8:17 GMT today EUR/GBP was losing 0.17% for the day to trade at 0.6994. The pair touched a daily low at 0.6993 at 8:18 GMT, undershooting the lower range breakout level (S4). The pair has been holding below the weekly central pivot level for a fifth straight trading day. Support may be received at August 6th low of 0.6966, while resistance may be encountered in the area around the current daily high of 0.7018.

Fundamentals

Euro area

Consumer Confidence – preliminary estimate

Confidence among consumers in the Euro area probably improved in November. The preliminary value of the consumer confidence index probably advanced to -7.5 from a final value of -7.7 in October. The latter was a confirmation of the preliminary index reading reported on October 22nd. The index measures consumer confidence on a scale of -100 to +100. A reading of -100 suggests a lack of confidence, zero means neutrality and a reading of +100 indicates extreme levels of confidence. The index reflects the level of optimism, which consumers have about economic development in the region. The Business and Consumer Survey is conducted by phone and includes 23 000 households in the Euro area. The questions asked stress on current economic and financial situation, savings intention and also on expected developments regarding consumer price indexes, general economic situation and major purchases of durable goods. This indicator is one of the five major components, that comprise the Economic Sentiment Indicator (ESI).

Higher confidence usually implies greater willingness to spend, including large-ticket purchases, while consumer spending is among the key factors driving economic growth. Therefore, in case the consumer confidence index advanced more than anticipated, this would cause a moderate bullish impact on the euro. The European Commission is expected to release the preliminary reading at 15:00 GMT.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for EUR/GBP are presented as follows:

R1 – 0.7021
R2 – 0.7026
R3 (range resistance) – 0.7031
R4 (range breakout) – 0.7043

S1 – 0.7013
S2 – 0.7007
S3 (range support) – 0.7003
S4 (range breakout) – 0.6991

By using the traditional method of calculation, the weekly pivot levels for EUR/GBP are presented as follows:

Central Pivot Point – 0.7090
R1 – 0.7142
R2 – 0.7208
R3 – 0.7260

S1 – 0.7024
S2 – 0.6972
S3 – 0.6906