Though EURGBP is forming an uncomfortably tight wedge, the pair is still well within its 0.6750-0.6825 range. Whats more, without a scheduled event with the same market-moving magnitude as the UK GDP had, the chance that the wedge breaks to the topside and through a range top seems seems to be the lower probability scenario.
Event Risk Euro Zone and UK
Trading Tip - Though EURGBP is forming an uncomfortably tight wedge, the pair is still well within its 0.6750-0.6825 range. Whats more, without a scheduled event with the same market-moving magnitude as the UK GDP had, the chance that the wedge breaks to the topside and through a range top seems seems to be the lower probability scenario. Stops and limits seem tight, but everything is denominated in pound-pips which is nearly twice the value of the standard EURUSD pip. At the time, since the range is rather small, good entry and exit is of the greatest importance. Carving 5 points off to chase price could easily tip risk/reward and make the trade unattractive.
Euro Zone - German sentiment figures will start out tomorrow, with GfK consumer confidence forecasted to reflect broad optimism in the country following the stronger-than-expected release of IFO business confidence. Fridays release of German CPI will serve as a leading indicator for Euro-zone CPI, which is due out the following Monday. Both are anticipated to reflect lighter price pressures, taking lessening some of the inflation concerns for the European Central Bank. Moreover, if the figures come in softer than expected, Euro may lose its bid as traders consider the potential of steady rates for the next few months. PMI manufacturing may have little impact on trade, as Euro-zone and German labor market reports will be released the same morning. The German unemployment change will likely take center stage, as it has improved significantly over the past few months and has consistently beaten expectations.
UK - Now that first quarter GDP is out of the way, the UK indicators on tap this week may not spark much volatility, leaving the currency primed for range trade. Nationwide house prices are expected to rise 0.6 percent in April, as growth in the housing sector goes unscathed. While there is no official announcement date as of yet, HBOS house prices will likely rise in line with the Nationwide release. GfK consumer confidence may not be as resilient, however, as prospects of higher rates could cause concern amongst households. The following Tuesday, PMI manufacturing could ease back as a stronger British pound may have weakened demand for exports. The next day, M4 money supply could easily slide under the radar should the figure go unrevised. However, a surprise jump could ignite additional fears that rampant expansion of money supply is helping to fuel broader price pressures.
[B]Data for April 26 - May 3[/B]
[B][/B]
[B]Data for April 26 - May 3[/B]
[B]Date[/B]
[B]Euro Zone Economic Data[/B]
[B][/B]
[B]Date[/B]
[B]UK[/B][B] Economic Data[/B]
Apr 26
German GfK Consumer Conf. (MAY)
Apr 26
Nationwide House Prices (APR)
Apr 27
German CPI (APR P)
Apr 30
GfK Consumer Confidence (APR)
Apr 30
CPI Estimate (APR)
May 1-4
HBOS House Prices (APR)
May 2
PMI Manufacturing (APR)
May 1
PMI Manufacturing (APR)
May 2
EZ/German Unemployment (MAR/APR)
May 2
M4 Money Supply (MAR F)