The EURGBP has recently been quite the momentum play, with a slew of bullish UK economic data forcing a large GBP rally across the board. Such momentum may look to slow, however, as the pair nears multi-month lows and event risk dries up in both the Euro Zone and Great Britain.
[B]Trading Tip - The EURGBP has recently been quite the momentum play, with a slew of bullish UK economic data forcing a large GBP rally across the board. Such momentum may look to slow, however, as the pair nears multi-month lows and event risk dries up in both the Euro Zone and Great Britain. The pair looks primed to range trade, with a minor rising trend and significant spike-lows offering solid support, while an overall downtrend leaves a potential short in place at a failure on the 0.6797 mark.[/B]
[B]Event Risk Euro-zone and the UK[/B]
[B]Euro-zone[/B] - Mixed economic data out of the Euro-zone could set the stage for continued range trading. First, conditions in the manufacturing and services sector are anticipated to remain resilient, with PMI results still well above the 50 boom/bust level. Aside from the headline, though, traders should key into price and employment components, as they could signal changes in broader trends. Meanwhile, investor and consumer sentiment are predicted to diverge, with IFO expected to fall back amidst higher interest rates and the GfK survey predicted to reflect optimism as labor markets tighten and economic expansion remains resilient.
[B]UK [/B]- Data flow out of the UK will be extremely thin this week with only housing data on tap. House price growth, as reported by both Rightmove and Nationwide, is anticipated to slow in the month of July as aggressive policy tightening by the Bank of England curbs demand in the sector. While this may put downward pressure on the British pound, the general the lack of event risk leaves conditions ideal for a range trading.
[B] Data for July 22 - July 27 Data for July 22 - July 26
Date Euro-zone Economic Data Date UK Economic Data[/B]
Jul 24 Euro-Zone PMI Manufacturing (JUL A) Jul 22 Rightmove House Prices (JUL)
Jul 24 Euro-Zone PMI Services (JUL A) Jul 26 Nationwide House Prices (JUL)
Jul 26 German IFO Survey (JUL)
Jul 27 GfK Consumer Confidence (AUG)