- EUR/GBP trades a narrow 23 pip range, caution prevails ahead of crucial risk events - UK construction PMI and ECB.
- UK construction PMI is expected to stay in expansion at 52.6, slightly better than the previous 52.0 result.
- A downside surprise cannot be ruled out given softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum.
- PMI reading matching or better expectations could see EUR/GBP slip to 0.77 and then 0.7680. Contrarily, disappointing result should see upside upto 0.7795 and 0.78 levels.
- Markets are expecting ECB to keep the monetary policy unchanged, with the deposit rate steady at -0.40%.
- However the central bank is expected to announce the first upward revision to the inflation forecasts since the asset purchasing began in January 2015.
- Our previous call (http://www.econotimes.com/FxWire-Pro-EUR-GBP-edges-above-077-handle-on-track-to-test-100-DMA-at-07792-215680) has achieved TP1.
Recommend exiting trade at highs ahead of major risk events. Enter fresh longs only on close above 0.7795.
