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EUR/GBP forex signal - Eurozone Sentix Investor Confidence - 07 May 2018

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Signal Details
Entry Price: 
0.8855
Take Profit: 
0.8811
Stop Loss: 
0.8874
Direction: 
Sell
Result: 
Void
How we trade
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The Eurozone Sentix investor confidence data will be released today at 0830 GMT. According to the economists polled, investor confidence as measured by Sentix is expected to show a reading of 22.4. This marks a modest increase compared to the previous month where investor confidence fell to 19.6.

The decline in the investor confidence came about following the global trade uncertainty and the threat of a potential trade war between the United States and China. Both business and consumer confidence in the Eurozone has been slipping over the past few months. This was primarily attributed to the uncertainty surrounding global trade and also a slowdown in the economic momentum in the region.

Germany, the Eurozone's largest economy was seen slowing down significantly in the first quarter. This was evident from the fact that the first quarter GDP in the Eurozone was seen expanding at a pace of 0.4% in the first three months of the year. This was no doubt a slower pace of increase in economic activity compared to the 0.6% quarterly GDP growth seen just in the previous quarter.

Besides the Sentix investor confidence data, other economic releases over the day include the German factory orders report. Factory orders will remain a key data point in assessing on how the economy advanced in the month of March. The Eurozone retail PMI data will also be coming out today.

German factory orders are forecast to rise 0.5% on a month over month basis, accelerating from a 0.3% increase. A rebound in the factory orders could spell good news amid recent data that showed a decline in the economic momentum in Germany and the Eurozone as a whole.

Based on the above, today's forex trading signal is EURGBP. The currency pair was seen edging higher on Friday as the euro strengthened strongly against the British pound. In the near term, we expect this bullish momentum to be maintained as price action inches closer to the main resistance level of 0.8855.

Therefore, we are looking to short EURGBP at 0.8855, with stops at 0.8874 targeting 0.8811 as we expect to see some profit taking pushing EURGBP to close lower on the day.

forex trading signal 07 may 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.