GBP/EUR & EUR/GBP Weekly Forecast

Good morning everyone,

Over the weekend, international trade secretary and Brexiteer Liam Fox said that the chance of a no-deal Brexit is growing which he blamed the "intransigence" of the European Commission. This comment along with a couple more seem to have set the GBP/EUR rate off on the back foot. GBP/EUR rate opened at €1.1248 but has already hit a low of €1.1195 before 9:00am UK time.

Last week's movements in the GBP/EUR exchange rate confirms Sterling traders are not really paying much attention to Bank of England interest rates, and therefore economic data. Instead, persistent concerns on Brexit negotiations remain the key driver and with no official scheduled events due anytime soon it again looks like Sterling could be in for some tricky weeks ahead under constant pressure. Further volatility is likely to come for the GBP/EUR exchange rate on the back of Friday’s UK gross domestic product data (The most important of the week’s data). As forecasts point towards a rebound in growth in the second quarter this could offer the Pound a good short term rally higher. As before, Sterling gains against the Euro will be limited to the high €1.12’s or low €1.13’s at best.

The main release for the Euro is the European Central Bank's Economic Bulletin out on Thursday, August 09 at 9.00am BST. This will present the latest assessment of the Eurozone economy by the European Central Bank (ECB) and will therefore be closely watched by traders. Economic indicators have given conflicting signals, with EU PMI data showing robustness but GDP growth disappointment, the bulletin may shed some light on these discrepancies and provide insight into the ECB's views of the economy's trajectory in the 2nd half of 2018. If it’s positive it could boost the single currency.

GBP/EUR & EUR/GBP Movements

The bad news for anyone looking to do GBP/EUR exchanges is that we are still many weeks away from getting clarity the markets desire with the October European Union summit seen as being the key event on the horizon as it is here that European leaders will agree on whether or not to OK a Brexit deal with the UK.

The good news for anyone looking to do EUR/GBP exchanges is that we could, with what is mentioned above, see the GBP/EUR rate hit new lows and test key levels which could see the rate move into the €1.10’s.

Current key trading level is €1.1165 (If we see the rate move lower than this level for a sustained amount of time, then the likelihood of the rate moving into the €1.10’s will be quite high).

Key Economic Data and Events

 

TUESDAY, AUG 07

07:00    EUR Industrial Production

07:00    EUR Trade Balance s.a. (Jun)

 

THURSDAY, AUG 09

09:00    EUR Economic Bulletin REPORT

 

FRIDAY, AUG 10

09:30    GBP Gross Domestic Product (Q2)PRELIMINARY

09:30    GBP Manufacturing Production (Jun)

09:30    GBP Industrial Production (Jun)

09:30    GBP Manufacturing Production (Jun)

09:30    GBP Gross Domestic Product (Jun)

 

GBP/EUR Daily Performance

  • High of the day so far is €1.1248
  • Low of the day so far is €1.1195
  • Resistance at €1.1230/40’s
  • Support at €1.1190’s
  • Range €1.1160’s - €1.13’s.

Current rate at time of writing 11:59am is €1.1211

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