The Euro is trading lower against some of the major currencies, including the British pound. The EURGBP pair is trading lower after the release of the Euro area GDP data. We were short on this pair, and looking for more downside in the coming days. However, one can join in again via selling rallies in the short term.
There was a bullish trend line on the 4 hour chart for the EURGBP pair. This trend line was breached earlier during the London session. There are now several resistances around the 0.7980 and 0.80 levels. So, if the pair gains from the current levels, trades closer to the mentioned resistance levels and forms a divergence on the lower timeframe, then we can jump into a sell trade. Remember, the pair must not trade back above the broken trend line for this trade setup to be valid.
Initial target should be around the 0.7920 level, and final target could be around the 0.7880 level. Stop should be above the 0.8015 level.
Reviewing yesterday’s events and trades
Yesterday, the US ISM manufacturing PMI was released during the NY session. The outcome was a disappointing one, as the US ISM manufacturing PMI fell to 55.3 from 55.4, missing the forecast of 55.8. The US dollar traded lower in an early reaction, but managed to recover some lost ground later during the NY session. However, it is still trading on the lower side against the British pound and the New Zealand dollar. The AUDUSD was also one of the best-performing pairs yesterday.
Fundamental Outlook for the day
Today, during the NY session, the US ADP nonfarm employment change data will be published, which is expected to register a reading of 200K. Moreover, the US factory orders data will also be released later. The most important event of the evening would be the speech from the Fed’s chairwoman Janet Yellen. The US dollar could move a lot during her speech. Later, during the next Asian session, the Australia’s retail sales data will be published. This event could cause some swing moves in the Aussie pairs.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURJPY, AUDUSD, USDCAD and EURCHF.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
