Forex traders will pay close attention to this morning’s German as well as Eurozone ZEW data. Economists expect a sharp contraction across the board, how will this impact the EURGBP which is grinding at a strong double resistance level? Analysts will also await the Eurozone trade balance in order to gauge how much of an impact the US-China trade war is having on the export dependent Eurozone economy. Today’s fundamental analysis will take a look at the downside potential of the this currency pair as well as the possibility for a breakout.
Here are the key factors to keep in mind today for Euro trades:
- Italian Trade Balance: The Italian Trade Balance for May is predicted at a €2.910B. Forex traders can compare this to Italian Trade Balance for April which was reported at €2.885B.
- Italian CPI: The Italian CPI for June is predicted to increase by 0.2% monthly and by 0.8% annualized. Forex traders can compare this to the German PPI for May which increased by 0.2% monthly and by 0.8% annualized.
- German ZEW Survey and Eurozone ZEW Survey: The German ZEW Survey Current Situation Index for July is predicted at 5.0 and the German ZEW Survey Economic Expectations Index at -22.1. Forex traders can compare this to the German ZEW Survey Current Situation Index for June which was reported at 7.8 and to the German ZEW Survey Economic Expectations Index which was reported at -21.1. The Eurozone ZEW Survey Economic Sentiment Index for July is predicted at -20.9. Forex traders can compare this to the Eurozone ZEW Survey Economic Sentiment Index for June which was reported at -20.2.
- Eurozone Trade Balance: The Eurozone Trade Balance for May is predicted at €16.3B. Forex traders can compare this to the Eurozone Trade Balance for April which was reported at €15.7B.
The next UK Prime Minister is expected to be announced this week and both candidates vowed to take the UK out of the EU by October 31st. The EU, under its new leadership, has softened its tone and is open to renegotiate terms. The UK labor market has remained solid and wage inflation has kept pressures to the upside which could lead to an interest rate increase which the Bank of England has kept open as an option irrelevant of the Brexit outcome. Will the British Pound rally in the second-half of 2019? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of the EURGBP trade!
Here are the key factors to keep in mind today for British Pound trades:
- UK Jobless Claims Change and Claimant Count Rate: The UK Jobless Claims Change for June is predicted at 18.9K and the Claimant Count Rate is predicted at 3.1%. Forex traders can compare this to the UK Jobless Claims Change for May which was reported at 23.2K and to the Claimant Count Rate which was reported at 3.1%.
- UK Employment Change, ILO Unemployment Rate and Average Weekly Earnings: The UK Employment Change for the tri-monthly period ending in May is predicted at 45K and the ILO Unemployment Rate is predicted at 3.8%. Forex traders can compare this to the UK Employment Change for April which was reported at 32K and to the ILO Unemployment Rate which was reported at 3.8%. Average Weekly Earnings for the tri-monthly period ending in May are predicted to increase by 3.1% annualized and Average Weekly Earnings Excluding Bonuses are predicted to increase by 3.5% annualized. Forex traders can compare this to Average Weekly Earnings for April which increased by 3.1% and Average Weekly Earnings Excluding Bonuses which increased by 3.4%.
Should price action for the EURGBP remain inside the or breakdown below the 0.8960to 0.9060 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9000
- Take Profit Zone: 0.8680 – 0.8725
- Stop Loss Level: 0.9100
Should price action for the EURGBP breakout above 0.9060 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9070
- Take Profit Zone: 0.9200 – 0.9235
- Stop Loss Level: 0.9000
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