Forex Market: EUR/GBP daily trading forecast

Yesterdays trade saw EUR/GBP within the range of 0.7300-0.7375. The daily high has also been the highest level since February 23rd, when a high of 0.7409 was recorded. The pair closed at 0.7357, rising 0.49% on a daily basis and marking a third straight daily gain.

At 7:46 GMT today EUR/GBP was down 0.07% for the day to trade at 0.7352. The pair touched a daily low at 0.7343 at 7:39 GMT.

Fundamentals

Euro Area

German IFO Business Climate Index

Business climate in Germany probably improved for a fifth consecutive month in March, with the respective gauge rising to 107.3, according to expectations, from 106.8 in February. If so, this would be the highest index reading since July 2014, when the indicator came in at 108.0.

The IFO Business Climate Index reflects entrepreneurs’ sentiment in regard to current business situation and their expectations for the next six months. The index is based on a survey, conducted by phone and encompasses 7 000 companies, that operate in sectors such as manufacturing, construction, wholesaling and retailing industry. The Business Climate Balance represents the difference between the percentage share of respondents that are optimistic and the share of respondents that are pessimistic. The balance can fluctuate between -100, which suggests all responding companies assess their situation as poor and expect business conditions to deteriorate, and +100, which suggests all responding companies assess their situation as good and expect an improvement in business conditions. In order to calculate the IFO Business Climate Index, the Balance is normalized to the average of a base year, which currently is 2005.

The IFO Business Climate Index is comprised by two equally-weighted sub-indexes – a gauge of expectations and a gauge of current assessment. The IFO expectations index probably rose a fifth consecutive month to reach 103.0 in March from 102.5 in February. If so, this would be the highest level since July 2014, when it was reported at 103.4. The IFO current assessment index probably advanced to 112.0 in the current month from 111.3 in February. If so, this would be the highest index value since July 2014, when the indicator stood at 112.9. In case any of the gauges registered a larger-than-projected increase, this would have a bullish effect on the single currency.

The CESifo Group is to release the official numbers at 9:00 GMT.

United Kingdom

BBA Home Loans

The number of home loans in the United Kingdom, issued by the British Bankers’ Association (BBA), probably increased to 36 900 in February from 36 394 in January. If so, this would be the highest number since October 2014, when 37 100 loans were issued. The BBA features the major banks in the country, which account for almost 60% of overall mortgage lending. The number of mortgage loans is considered as a leading indicator in regard to UK housing market conditions. As growth in mortgage lending signifies a healthy housing sector, which also contributes to overall economic activity, in case the number of loans rose more than projected, this would boost demand for the sterling. The BBA is to publish the official figure at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7344. In case EUR/GBP manages to breach the first resistance level at 0.7388, it will probably continue up to test 0.7419. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7463.

If EUR/GBP manages to breach the first key support at 0.7313, it will probably continue to slide and test 0.7269. With this second key support broken, the movement to the downside will probably continue to 0.7238.

The mid-Pivot levels for Monday are as follows: M1 – 0.7254, M2 – 0.7291, M3 – 0.7329, M4 – 0.7366, M5 – 0.7404, M6 – 0.7441.

In weekly terms, the central pivot point is at 0.7208. The three key resistance levels are as follows: R1 – 0.7327, R2 – 0.7415, R3 – 0.7534. The three key support levels are: S1 – 0.7120, S2 – 0.7001, S3 – 0.6913.