EUR/GBP heads into NFP Friday with EU trade balance, UK production in the pipe
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Euro and Sterling continue to trade places in the long-term.
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Friday promises a hectic schedule with EU, UK, US NFP lined up.
The EUR/GBP is trading in calm waters ahead of a hectic Friday, testing around 0.8920 on light action.
The Euro has traded flat against the Sterling all week with the overall market sentiment being driven by fears of a trade war springing out of Donald Trump's steel and aluminum tariffs which he announced last Thursday and signed into action late yesterday. The 25% tariff on steel and 10% tariff on aluminum crossing the US border both come into effect fifteen days from now. Despite exemptions for Canada and Mexico, and tentative hopes for exemptions to South Korea, fears of a trade war are still running through the market as traders wait to see retaliation from those who didn't receive exemptions, namely China and the European Union.
Markets can expect a good hit of volatility from the US Non-Farm Payrolls due at 13:30 later today, but first a slew of data for the EU and the UK drops, beginning with German Trade Balance at 07:00 GMT. The figure is forecast to come in at €21.1B, a slight contraction from the previous reading of €21.4B. After that, the UK sees the Manufacturing and Industrial Production figures at 09:30 GMT, with manufacturing expected to show a slight contraction in growth, from 0.3% TO 0.2%, while industrial growth is forecast at 1.5%, a big increase over the previous -1.3%.
EUR/GBP Technicals
Despite trading within an established range for several Daily candles, the pair is still on the bullish side, but the continued rotation around the 200-day SMA currently at 0.8888 implies a lack of long-term trend between the Euro and the Pound, and a turnaround back below the indicator is highly likely. Current support is coming from yesterday's low at 0.8905, with resistance at yesterday's high of 0.8956. A bearish turn from here will ultimately be targeting February's last swing low, near 0.8785.