EUR/GBP Weekly Fundamental Analysis, December 24-28, 2012, Forecast

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Updated: Aug 21, 2015, 01:00 UTC

Introduction: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to

EUR/GBP Weekly Fundamental Analysis, December 24-28, 2012, Forecast

Introduction: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.

The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
European and UK economic data
Growth differentials between the Euro zone and UK

Weekly Analysis and Recommendations

The EUR/GBP broke records this week trading at 0.8113 to 0.8156. The euro continues to trade strongly most of the week as market sentiment turned to risk on pushing the record to recent highs. A risk-on attitude seems to have grasped the markets over the past 24-hours and the influence can be clearly seen in currency trading, as the risk-correlated Euro and sterling set new highs. Signs of risk appetite could be seen in equity trading, as the S&P climbed 1.15% in yesterday’s trading, and today European equities are showing decisive gains across the board.

The Euro set new 7-month highs in this week’s trading; most of the gains came shortly after the better than expected IFO German business sentiment survey. However, the reaction was delayed and may have been more of a reaction to general risk appetites.

The rise in euro happened at the same time a sudden rise in Greek bond prices led to what has so far been a 64 basis point drop in today’s trading. The rise in Greek bond prices follows the overnight S&P upgrade to Greek bond ratings. Greece’s sovereignty rating is now at B- with a stable outlook, up from a selective default rating.

Date	Last	Open	High	Low	Change %
Dec 21, 2012	0.8154	0.8134	0.8156	0.8116	0.25%
Dec 20, 2012	0.8134	0.8131	0.8162	0.8126	0.04%
Dec 19, 2012	0.8131	0.8141	0.8168	0.8116	-0.12%
Dec 18, 2012	0.8141	0.8123	0.8145	0.8118	0.22%
Dec 17, 2012	0.8123	0.8141	0.8147	0.8113	-0.21%

I would like to take this time to express my best wishes to all of my readers during this holiday season and extend the best hopes for profitable trading in 2013.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of December 17-21 actual v. forecast for Euro, GPB, the Franc, and USD

Date	Time	Currency	Event	Actual	Forecast	Previous
Dec. 17	00:01	GBP	Rightmove House Price Index (MoM)	-3.3%		-2.6%
	13:30	USD	NY Empire State Manufacturing Index	-8.1	-1.0	-5.2
	14:00	USD	TIC Net Long-Term Transactions	1.3B	25.0B	3.2B
Dec. 18	09:30	GBP	Core CPI (YoY)	2.6%	2.7%	2.6%
	09:30	GBP	CPI (YoY)	2.7%	2.6%	2.7%
	09:30	GBP	PPI Input (MoM)	0.1%	-0.1%	0.1%
	09:30	GBP	CPI (MoM)	0.2%	0.2%	0.5%
	09:30	GBP	PPI Input (YoY)	-0.3%	-0.5%	0.1%
	13:30	USD	Current Account	-107.5B	-103.4B	-118.1B
Dec. 19	09:00	EUR	German Ifo Business Climate Index	102.4	102.0	101.4
	09:00	EUR	German Current Assessment	107.1	108.0	108.1
	09:00	EUR	German Business Expectations	97.9	96.3	95.2
	11:00	GBP	CBI Distributive Trades Survey	19	25	33
	13:30	USD	Building Permits	0.899M	0.875M	0.868M
	13:30	USD	Housing Starts	0.861M	0.873M	0.888M
Dec. 20	09:30	GBP	Retail Sales (MoM)	0.0%	0.3%	-0.7%
	09:30	GBP	Retail Sales (YoY)	0.9%	1.5%	0.8%
	13:30	USD	Initial Jobless Claims	361K	357K	344K
	13:30	USD	GDP (QoQ)	3.1%	2.8%	2.7%
	13:30	USD	Continuing Jobless Claims	3225K	3199K	3213K
	15:00	USD	Existing Home Sales	5.04M	4.87M	4.76M
	15:00	USD	Philadelphia Fed Manufacturing Index	8.1	-3.0	-10.7
Dec. 21	07:00	EUR	GfK German Consumer Climate	5.6	5.9	5.8
	09:30	GBP	Business Investment (QoQ)	3.8%	3.5%	3.7%
	09:30	GBP	Current Account	-12.8B	-14.0B	-17.4B
	09:30	GBP	GDP (QoQ)	0.9%	1.0%	1.0%
	09:30	GBP	GDP (YoY)	0.0%	-0.1%	-0.1%
	13:30	USD	Core Durable Goods Orders (MoM)	1.6%	-0.2%	1.9%
	13:30	USD	Core PCE Price Index (MoM)	0.0%	0.1%	0.1%
	13:30	USD	Durable Goods Orders (MoM)	0.7%	0.2%	1.1%
	13:30	USD	Personal Spending (MoM)	0.4%	0.3%	-0.1%
	14:55	USD	Michigan Consumer Sentiment	72.9	74.7	74.5