EUR/GBP looking weaker to the downside
The EUR/GBP has been trading relatively weaker after the rally in early October which saw the euro rise to a 5-year high on the ongoing Brexit developments. However, after posting a 5-year high above 0.9087, the euro has been trading weaker since then. Combining the fundamentals and the technicals, EUR/GBP is poised to head lower this week.
The euro is starting to look weaker against the British pound ahead of an important week. For the markets today, eurozone inflation figures for September will be released at 10:00 AM GMT.
Economists are expecting to see a headline increase in CPI to 0.5% while core CPI is expected to rise 0.8%. Flash GDP figures will be followed up later.
It is a relatively slow day in the markets today in the backdrop of a very busy week starting from tomorrow. However, for the EUR/GBP, today's fundamentals will be key for the currency pair as the eurozone inflation and GDP numbers will be released shortly.
Inflation is expected to show a broad improvement with the month over month CPI expected to rise 0.5%. Later on, the preliminary GDP figures for the third quarter is expected to show that the eurozone GDP rose at a pace of 0.3% in the third quarter on a quarterly basis, leaving the annual GDP rate unchanged at 1.6%.
How to trade binary
For the day ahead, EUR/GBP PUT options are recommended. Look for price to retrace the current declines back towards 0.9000 - 0.9010 and purchase PUT options at a strike price near the resistance level noted for a 21:00 GMT expiry time.
Alternately, an hourly close above 0.9010 could see the EUR/GBP look to pushing for more gains to reach for the unfilled gap near the day's opening price of 0.9024 which will invalidate the bearish bias.
However, despite the short term risks, EUR/GBP is poised to push weaker with both the weekly and daily charts signaling exhaustion to the upside. The trade set up will be invalidated if it is not triggered by 18:00 GMT today.