Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Spanish Markit Services PMI for January is predicted at 51.5. Forex traders can compare this to the Spanish Markit Services PMI for December, reported at 55.8. The Italian Markit Services PMI for January is predicted at 50.0. Forex traders can compare this to the Italian Markit Services PMI for December, reported at 53.0.
The Final French Markit Services PMI for January is predicted at 53.1, and the Final French Markit Composite PMI at 52.7. Forex traders can compare this to the French Markit Services PMI for December, reported at 57.0, and the French Markit Composite PMI reported at 55.8.
The Final German Markit Services PMI for January is predicted at 52.2, and the Final German Markit/BME Composite PMI at 54.3. Forex traders can compare this to the German Markit Services PMI for December, reported at 48.7, and the German Markit/BME Composite PMI reported at 49.9.
The Final Eurozone Markit Services PMI for January is predicted at 51.2, and the Final Eurozone Markit Composite PMI at 52.4. Forex traders can compare this to the Eurozone Markit Services PMI for December, reported at 53.1, and the Eurozone Markit Composite PMI reported at 53.3.
The Eurozone PPI for December is predicted to increase by 2.8% monthly 26.1% annualized. Forex traders can compare this to the Eurozone PPI for November, which increased 1.8% monthly 23.7% annualized.
The ECB is predicted to keep its Interest Rate at 0.00%, its Deposit Facility Rate at -0.50%, and its Marginal Lending Facility Rate at 0.25%; this would equal no change in the ECB rate policy from the previous meeting. Traders should monitor comments at the following press conference for hints of future monetary policy, which is likely to remain accommodative.
The Final UK Markit/CIPS Services PMI for January is predicted at 53.3, and the Final UK Markit/CIPS Composite PMI is predicted at 53.4. Forex traders can compare this to the UK Markit/CIPS Services PMI for December, reported at 53.6, and the UK Markit/CIPS Composite PMI reported at 53.6.
The Bank of England is predicted to increase interest rates by 25 basis points from 0.25% to 0.50%, but keep the Asset Purchase Target at £875B. Forex traders can compare this to the previous Bank of England meeting where the UK central bank increased interest rates by 15 basis points from its historic low of 0.10% to 0.25% and kept the Asset Purchase Target at £875B. Traders should monitor the press release following the announcement for clues about potential changes to monetary policy and the inflation outlook.
The forecast for the EUR/GBP remains bearish after this currency pair moved below its gradually descending Ichimoku Kinko Hyo Cloud. Volatility may increase after the Kijun-sen, and the Tenkan-sen, flatlined, but a pending bearish crossover remains a possibility, which can extend the sell-off. Traders should monitor the CCI, which spiked from extreme oversold territory into extreme overbought conditions before retreating below 0. It has more downside potential and can drag this currency pair lower. Will bears try to capitalize on recent technical weakness and fundamental developments to pressure the EUR/GBP into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/GBP remain inside the or breakdown below the 0.8300 to 0.8360 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8335
- Take Profit Zone: 0.8095 – 0.8175
- Stop Loss Level: 0.8385
Should price action for the EUR/GBP breakout above 0.8360, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8385
- Take Profit Zone: 0.8450 – 0.8490
- Stop Loss Level: 0.8360
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
