EUR/GBP Fundamental Forecast – May 26, 2016

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Updated: May 25, 2016, 16:12 UTC

The EUR/GBP closed at .7580, down 0.0031 or -0.41% as traders continued to react to polls showing that most Brits want to remain a member of the European

EUR/GBP Fundamental Forecast – May 26, 2016

The EUR/GBP closed at .7580, down 0.0031 or -0.41% as traders continued to react to polls showing that most Brits want to remain a member of the European Union. The charts suggest this market is likely to continue to drop until at least .7549 to .7416.

The “Brexit” theme continues to dominate the market. Prices have fallen sharply over the past week as polls continue to show a growing number of Brits prefer that Britain remain a member of the European Union.

The latest poll conducted by the ORB for the Daily Telegraph suggests that “Remain” is building a big lead in the Brexit vote. 50% of respondents said they back staying in the EU, compared to just 42% who said they want to leave.

The referendum will take place on June 23.

The Euro posted a limited reaction to reports showing better-than-expected results from Germany. GfK German Consumer Climate for June came in at 9.8, besting its 9.7 estimate. German Business Expectations for May were 101.6, better than the 100.8 forecast. German Current Assessment for May came in at 114.2, higher than the 113.2 estimate. German IFO Business Climate Index for May was 107.7, beating the 106.8 forecast.

Traders also failed to respond to the news that Euro Zone finance ministers agreed with Greece and the International Monetary Fund (IMF) on what they called a “breakthrough” deal that will address Athens’ requests for debt relief.

Late Wednesday, the Eurogroup ministers agreed to release 10.3 billion Euros ($11.42 billion) for Greece after Athens agreed to a package of painful austerity and reform measures over the weekend.

The price action suggests EUR/GBP traders are going to be focused primarily on the Brexit polls until the referendum in June. The volatility and direction of the Forex pair will be determined by the results of these pools so at times we could experience a choppy, two-sided trade.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock	-5.137M	-3.300M	-1.140M
USD	API Weekly Cushing Crude Oil Stock	-0.189M	-0.950M	0.508M
NZD	Trade Balance (MoM) (Apr)	292M	60M	117M
NZD	Trade Balance (YoY) (Apr)	-3,660M	-3,940M	-3,380M
AUD	Construction Work Done (QoQ) (Q1)	-2.6%	-1.5%	-3.6%
EUR	GfK German Consumer Climate (Jun)	9.8	9.7	9.7
EUR	German Business Expectations (May)	101.6	100.8	100.4
EUR	German Current Assessment (May)	114.2	113.2	113.2
EUR	German Ifo Business Climate Index (May)	107.7	106.8	106.6
EUR	EU Finance Ministers Meeting
USD	Goods Trade Balance (Apr)	-57.53B	-60.10B	-56.90B
USD	FOMC Member Harker Speaks
USD	Services PMI (May)	51.2	53.1	52.8
CAD	Interest Rate Decision		0.50%	0.50%
USD	Crude Oil Inventories	-4.226M	-2.450M	1.310M
USD	Cushing Crude Oil Inventories	-0.649M		0.461M
USD	FOMC Member Kashkari Speaks
USD	FOMC Member Kaplan Speaks
AUD	Private New Capital Expenditure (QoQ) (Q1)		-3.0%	0.8%

Upcoming Economic Events that you should be monitoring:

Thursday, May 26, 2016

Cur.	Event	Actual	Forecast	Previous
GBP	BBA Mortgage Approvals		44.8K	45.1K
GBP	Business Investment (QoQ) (Q1)		0.1%	-2.0%
GBP	GDP (YoY) (Q1)		2.1%	2.1%
GBP	GDP (QoQ) (Q1)		0.4%	0.4%
USD	FOMC Member Bullard Speaks
USD	Core Durable Goods Orders (MoM) (Apr)		0.3%	-0.2%
USD	Durable Goods Orders (MoM) (Apr)		0.5%	1.3%
USD	Initial Jobless Claims		275K	278K
AUD	RBA Assist Gov Debelle Speaks
USD	Pending Home Sales (MoM) (Apr)		0.6%	1.4%
USD	FOMC Member Powell Speaks
AUD	RBA Assist Gov Debelle Speaks
JPY	National Core CPI (YoY) (Apr)		-0.4%	-0.3%
JPY	Tokyo Core CPI (YoY) (May)		-0.4%	-0.3%

Government Bond Auctions

May 25 11:03 Sweden Sek 1bn 3.5% 2022 & Sek 3bn 1% 2026 bonds

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 25 19:00 US Holds 5Yr Notes Auction, 2Yr FRN

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn Apr 2021 Bobl

Jun 01 11:30 UK 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction

About the Author

James Hyerczykauthor

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.