GBP/EUR weekly forecast: Pound to Euro outlook for this week August 19, 2024
GBP/EUR overview:
Last week, the GBP/EUR pair experienced notable volatility, driven by mixed UK economic data. Despite a dip midweek following the release of UK inflation data, the pair rebounded to close near 1.1730, hitting a 10-day high. The improvement was supported by steady risk appetite and underlying confidence in the pound, reflecting optimism about the UK’s economic outlook.
GBP/EUR technical analysis summary:
(data based on 1-day time frames)
The GBP/EUR pair is currently trading near 1.1730, showing a potential shift towards bullish momentum:
RSI: The RSI remains near 50, indicating a neutral stance but with room for further upward movement.
MACD: The MACD is showing signs of recovery after the recent downturn, with potential for a bullish crossover in the coming days.
Support and Resistance: Immediate support is at 1.1675, while key resistance stands at 1.1800. A breach above this resistance could set the stage for further gains.
Key forex calendar events for GBP/EUR this week
Several critical events could drive the pair’s direction this week:
1. Thursday, August 22nd
Eurozone Flash PMI Data: Weaker-than-expected data could weigh on the euro, providing an upside for GBP/EUR.
UK Flash PMI Data: Any surprises, particularly in the services sector, could strengthen or weaken the pound.
2. Friday, August 23rd:
BOE Governor Bailey’s Speech at Jackson Hole: This will be closely monitored for insights into the Bank of England’s monetary policy direction.
Weekly forecast for GBP/EUR based on different scenarios
Bullish Scenario: Should UK data outperform expectations, and if BOE Governor Bailey signals confidence in the UK economy, the pair could break above the 1.1800 resistance, pushing towards 1.1850.
Bearish Scenario: On the other hand, weaker UK PMI results or a dovish tone from the BOE could see GBP/EUR retrace towards the 1.1675 support level, with further downside possible to 1.1600.
Neutral Scenario: If the pair fails to break out of its current range, consolidation between 1.1675 and 1.1800 could dominate this week. In such a scenario, market participants would likely await further clarity from upcoming economic releases and central bank guidance.
The GBP/EUR pair is poised for potential gains this week, supported by technical indicators signaling a recovery. The RSI remains neutral but leans slightly bullish, while the MACD suggests a possible bullish crossover, hinting at further upside. However, mixed UK economic data and uncertainty surrounding upcoming Eurozone PMI releases may introduce volatility.
With the Bank of England Governor’s speech at Jackson Hole and PMI data from both regions on the horizon, a breakout above 1.1800 could confirm a bullish trend. Conversely, a lack of momentum could see the pair oscillate within its current range
This analysis is for informational purposes only and does not constitute investment advice. Trading in financial markets involve significant risk of loss. Past performance is not indicative of future results. Please seek independent financial advice before making any investment decisions. Full Disclaimer
