The EURGBP Exchange Rate has UK retail sales data on Friday, alongside German PMI, both of which are high-level releases.
EURGBP – 4H Chart
The EURGBP on the 4H chart has support at 0.8800 and resistance at 0.8865. Those could be tested to determine the next path.
The latest data will close out the week and could set the tone for trading ahead of Wednesday’s important British government budget.
The situation isn’t promising for the UK, with economists expecting 0% growth in retail sales after a 0.5% improvement last month. Consumers are already feeling cash-strapped, and they could face punitive tax measures in the budget. The retail data comes out at 2 pm HKT, followed by Euro data at 3:30 pm.
The German and Eurozone HCOB PMI data will give important updates on manufacturing and services economy strength. Germany’s joint number is expected to dip from 53.9 to 53.7, with manufacturing and services mostly flat. European data at 4 pm is expected to show a similar tone with all numbers flat.
Then we will get the release of the UK versions at 4:30 pm, and the support and resistance zones could be important ahead of early trading next week, until we hit Wednesday’s budget, when high-volume trading is certain.
The British economy has to fill a so-called “black hole” in its finances while still offering a growth path.
“Gilt yields jumped after reports the UK government was scrapping plans to raise income tax, casting fresh doubt over how a £30bn gap will be plugged. We expect about half to come from upfront tax hikes, so yields may not climb much further,” analysts at ING said.
On the euro side, the central bank recently warned of potential banking shocks.
“Geopolitical tensions and shifting trade policies, climate and nature-related crises, demographic change and technological disruptions are exacerbating structural vulnerabilities, making the likelihood of extreme, low-probability events unprecedentedly high,” a statement said.
