Source: PaxForex Premium Analytics Portal, Fundamental Insight

The Preliminary Japanese GDP for the first quarter decreased by 1.3% quarterly and by 5.1% annualized. Economists predicted a decrease of 1.2% and 4.6% annualized. Forex traders can compare this to the Japanese GDP for the fourth quarter, which increased by 2.8% quarterly and 11.6% annualized. Preliminary Private Consumption for the first quarter decreased by 1.4% quarterly, preliminary Capital Expenditure decreased by 1.40% quarterly, and preliminary External Demand decreased by 0.2% quarterly. Economists predicted a decrease of 2.0%, an increase of 1.1%, and a decrease of 0.2%. Forex traders can compare this to Private Consumption for the fourth quarter, which increased by 2.2% quarterly, to Capital Expenditure, which increased by 4.3% quarterly, and to External Demand, which increased by 1.0% quarterly. The Japanese Tertiary Industry Index for March increased by 1.1% monthly. Forex traders can compare this to the Japanese Tertiary Industry Index for February, which increased by 0.3% monthly.

The UK Jobless Claims Change for April was reported at -15.1K. Forex traders can compare this to the UK Jobless Claims Change for March, reported at 10.1K. The UK Employment Change for the tri-monthly period ending in March was reported at 84K, and the ILO Unemployment Rate was reported at 4.8%. Economists predicted a reading of 50K and 4.9%. Forex traders can compare this to the UK Employment Change for February, reported at -73K, and to the ILO Unemployment Rate, reported at 4.9%. Average Weekly Earnings for the tri-monthly period ending in March increased by 4.0% annualized, and Average Weekly Earnings Excluding Bonuses increased by 4.6% annualized. Economists predicted an increase of 4.5% and 4.6%. Forex traders can compare this to Average Weekly Earnings for February, which increased by 4.5%, and to Average Weekly Earnings Excluding Bonuses, which increased by 4.4%.

The forecast for the EUR/GBP remains bearish, supported by the descending Ichimoku Kinko Hyo Cloud. On the economic side, the UK after Brexit continues to improve underlying conditions, while the Eurozone moves in the opposite direction. The Tenkan-sen and the Kijun-sen turned flat, suggesting a brief period of choppy trading before the next sell-off, expected from a breakdown below the Ichimoku Kinko Hyo Cloud. The CCI moved out of extreme oversold territory but already began its reversal with more downside potential. Can bears extend the sell-off in the EUR/GBP and force this currency pair into its horizontal support area? SSubscribe 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 0.8560 to 0.8620 zone, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Short Position
• Entry Level: Short Position @ 0.8585
• Take Profit Zone: 0.8280 – 0.8350
• Stop Loss Level: 0.8700

Should price action for the EUR/GBP breakout above 0.8865, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Long Position
• Entry Level: Long Position @ 0.8620
• Take Profit Zone: 0.8810 – 0.8860
• Stop Loss Level: 0.8700

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