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Positive risk vibes and a full calendar ahead for the U.K. and euro area makes this short-term setup on EUR/GBP one to watch to close out the week.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13390.47 +1.07%
FTSE: 7600.95 +0.78%
S&P 500: 3239.28 +0.26%
DJIA: 28659.06 +0.42%
US 10-yr 1.854% -0.056
Bund 10-YR -0.23% -0.043
UK 10-YR: 0.779% -0.046
JPN 10-YR: -0.02% -0.015
Oil: 60.89 -0.28%
Gold: 1532.70 +0.63%
Bitcoin: 7111.79 -0.83%
Etherium: 129.08 -0.59%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.K. Housing Prices at 7:00 am GMT (Jan. 3)
  • French Inflation at 7:45 am GMT (Jan. 3)
  • Spanish Unemployment change at 8:00 am GMT (Jan. 3)
  • German Unemployment rate at 8:55 am GMT (Jan. 3)
  • Euro area Loan growth & M3 money supply
  • U.K. Mortgage approvals at 9:30 am GMT (Jan. 3)

What to Watch: EUR/GBP

EUR/GBP 1-Hour Forex Chart
EUR/GBP 1-Hour Forex Chart

Kicking of the new year with this look at EUR/GBP on the one hour chart. We’ve got a positive global risk environment after China adds stimulus to their economy and slew of upcoming European and U.K. economic data points that could keep volatility elevated into the Friday trading session.

If you’re a short-term bear on EUR/GBP, the technicals currently play in your favor as the market recently saw bearish momentum to the 0.8450 handle before bouncing to currently levels around 0.8500. This area was a strong area of interest in mid-December and it’s also the Fibonacci retracement area of the recent swing move lower. So, this retest could draw in sellers once again, especially if the U.K. housing data surprise positive while the European unemployment data disappoints. A positive global risk environment would also likely support a bearish move in EUR/GBP, so be on the look out for that as well.

If you’re a bull on EUR/GBP, some combination of positive European data, weak U.K. housing data, and/or a negative shift in global risk sentiment would likely support a  move higher in the market, and if traders can push the pair above the Fibs/consolidation area around the major psychological level of 0.8500, look out for traders to build a support base there before considering a long position.