Current trend

The EUR/GBP pair shows ambiguous trading dynamics, holding near 0.8545. Market activity remains rather low as investors prepare for the release of the US labor market report for June.

Forecasts suggest an increase in the Nonfarm Payrolls by 225.0 thousand after increasing by 339.0 thousand in the previous month, while the Unemployment Rate may update a record low, falling from 3.7% to 3.6%, and the Average Hourly Earnings in June are expected at around 0.3%, while in annual terms, the figure may slow down from 4.3% to 4.2%.

May data on the volume of Retail Sales in the eurozone turned out to be weak: on a monthly basis, the indicator did not change and amounted to 0.0%, although experts expected an increase of 0.2%, and on an annual basis it decreased by 2.9%, with an expected reduction of 2.7%. Overall, consumption remains low as real household incomes fall and most of them are used to pay for electricity and repay loans, which reduces demand for other goods. Today, market participants are evaluating the May statistics on Industrial Production in Germany: the monthly figure slowed down from 0.3% to -0.2%, which turned out to be worse than the forecast at the level of 0.1%.

The day before, traders followed the dynamics of the S&P Global Construction PMI in the UK: in June it fell from 51.6 points to 48.9 points against preliminary estimates of 51.0 points. In general, the construction of residential real estate in the country is slowing down at the most significant pace since the start of the coronavirus pandemic against the backdrop of a long "hawkish" monetary policy of the Bank of England.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, having reached its lows, reverses upwards, signaling in favor of the development of corrective growth of the single currency in the ultra-short term.

Resistance levels: 0.8555, 0.8574, 0.8606, 0.8634.

Support levels: 0.8532, 0.8508, 0.8479, 0.8450.

Trading tips

Long positions can be opened after a breakout of 0.8555 with the target of 0.8606. Stop-loss — 0.8532. Implementation time: 2-3 days.

A rebound from 0.8555 as from resistance, followed by a breakdown of 0.8532 may become a signal for opening of new short positions with the target at 0.8479. Stop-loss — 0.8555.