EUR/GBP Fundamental Analysis September 18, 2012, Forecast

By FX Empire Analyst - James Hyerczyk
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On Tuesday, EUR/GBP traders will be focused on key economic reports affecting each individual currency. Euro traders will turn their attention to German ZEW Economic Sentiment and ZEW Economic Sentiment while British Pound traders will be watching the U.K.’s CPI report.

The ZEW reports are expected to show improvement with Germany increasing from -25.5 to -10.0 and the overall ZEW from -21.2 to -16.3. Positive actions by the European Central Bank and appreciation in the DAX are the main reasons for the improvement in the numbers. The U.K. CPI report is expected to show a slight decrease from 2.6% to 2.5%.

The ZEW report is expected to be the most volatile and should have the greatest impact on the EUR/GBP Forex pair. A better than expected number should send the Euro higher versus the British Pound. A smaller than expected improvement should pressure the Euro.

Traders may also pressure the currency pair because of technical reasons. Overbought oscillators and indicators may encourage traders to take profits at current levels, looking for a move back down to more favorable levels.  

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