Source: PaxForex Premium Analytics Portal, Fundamental Insight
The UK GDP for July increased 0.2% monthly, came in flat at 0.0% for the three-month-over-three-month period ending in July, and rose 2.3% annualized. Economists predicted an increase of 0.4%, 0.1%, and 2.6%. Forex traders can compare this to the UK GDP for June, which decreased 0.6%, contracted 0.1% for the three-month-over-three-month period ending in July, and expanded 1.9% annualized.
UK Construction Output Seasonally Adjusted for July decreased 0.8% monthly and increased 4.3% annualized. Economists predicted an increase of 0.5% and 5.6%. Forex traders can compare this to UK Construction Output Seasonally Adjusted for June, which dropped 1.4% monthly and rose 4.1% annualized.
UK Industrial Production for July decreased 0.3% monthly and increased 1.1% annualized. Economists predicted a rise of 0.4% and 1.9%. Forex traders can compare this to UK Industrial Production for June, which contracted 0.9% monthly and expanded 2.4% annualized. UK Manufacturing Production for July rose 0.1% monthly and 1.1% annualized. Economists predicted a rise of 0.4% monthly and 1.6% annualized. Forex traders can compare this to UK Manufacturing Production for June, which contracted 1.6% monthly and increased 1.3% annualized.
The UK Visible Trade Balance for July came in at -£19.360B, and the UK Trade Balance Non-EU at -£10.19B. Forex traders can compare this to the UK Visible Trade Balance for June, reported at -£22.850B, and the UK Trade Balance Non-EU at -£12.290B.
Italian Industrial Production for July is predicted to increase 0.3% monthly and decrease 0.4% annualized. Forex traders can compare this to Italian Industrial Production for June, which contracted 2.1% monthly and 1.2% annualized.
The forecast for the EUR/GBP began to show signs of bearishness after this currency pair rallied into its horizontal resistance area. Volatility could increase over the next trading sessions, as the flat Kijun-sen confirms a lack of short-term bullishness while the Tenkan-sen moves higher. The Ichimoku Kinko Hyo Cloud narrowed from a sideways trend, and the ascending Senkou Span A eclipsed the flat Senkou Span B, which could result in a false bullish crossover. Traders should monitor the CCI after a small negative divergence formed in extreme overbought territory, followed by a move below 100. If a secondary push higher forms a lower high, traders can sell the following breakdown from extreme overbought territory. Can bears overpower bulls and pressure the EUR/GBP into its horizontal support area?
The UK Employment Change for the tri-monthly period ending in April came in at 177K and the ILO Unemployment Rate at 3.8%. Economists predicted a reading of 105K and 3.6%. Forex traders can compare this to the UK Employment Change for March, reported at 83K, and to the ILO Unemployment Rate at 3.7%. Average Weekly Earnings for the tri-monthly period ending in April increased by 6.8% annualized, and Average Weekly Earnings Excluding Bonuses rose 4.2% annualized. Economists predicted a rise of 7.6% and 4.0%. Forex traders can compare this to Average Weekly Earnings for March, which rose 7.0%, and to Average Weekly Earnings Excluding Bonuses, which increased by 4.2%.
The Final German CPI for May rose 0.9% monthly and 7.9% annualized. Economists predicted an increase of 0.9% and 7.9%. Forex traders can compare this to the German CPI for April, which expanded 0.8% monthly and 7.4% annualized. The Final EU Harmonized German CPI for May increased 1.1% monthly and 8.7% annualized. Economists predicted a rise of 1.1% and 8.7%. Forex traders can compare this to the EU Harmonized German CPI for April, which rose 0.7% monthly and 7.8% annualized.
The German Wholesale Price Index for May increased 1.0% monthly and 22.9% annualized. Forex traders can compare this to the German Wholesale Price Index for April, which rose 2.1% monthly and 23.8% annualized.
The German ZEW Survey Current Situation Index for June is predicted at -31.0, and the German ZEW Survey Economic Sentiment Index at -27.5. Forex traders can compare this to the German ZEW Survey Current Situation Index for May, reported at -36.5, and to the German ZEW Survey Economic Sentiment Index at -34.3.
The forecast for the EUR/GBP turned bearish after this currency pair advanced into its horizontal resistance area. Confirming the lack of bullishness are the flat Kijun-sen, the flat, Tenkan-sen, and the flat Ichimoku Kinko Hyo Cloud. Forex traders should expect an increase in volatility and monitor the CCI, which formed a lower high in extreme overbought territory. A breakdown below 100 could trigger the next sell-off. Can bears overcome bulls and force 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 0.8540 to 0.8620 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8690
- Take Profit Zone: 0.8435 – 0.8490
- Stop Loss Level: 0.8785
Should price action for the EUR/GBP breakout above 0.8720, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8785
- Take Profit Zone: 0.8885 – 0.8920
- Stop Loss Level: 0.8720
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