The strong decline was not triggered by any kind of event or even a rumor and as such we must attribute the 100-pips drop to a substantial attempt from investors taking profits off the table. On Friday, long positions held in the GBP/USD pair were at a 14-month high and it would be reasonable to suggest that after the completion of the Vodafone-Verizon deal flows a large number of traders decided to cash in.

The rest of the week holds no important releases for the UK currency apart from today’s Manufacturing and Industrial Production figures that are expected to show a positive outlook for the UK economy so a retracement higher could be expected.

The Euro on the other hand ended the day pretty much unchanged and held on its recent gains to trade above 1.3850. Today the German Trade Balance figures are expected and should these surprise to the upside we could see new highs for the European currency. Yesterday the Sentix Investor Confidence report rose to a 35-month high showing that market participants are optimistic over Europe’s outlook and at this point the only factor that could cast doubts over Euro’s bullishness is a turn for the worse in the situation in Crimea.

The FTSE 100 was down yesterday mostly affected by the weak Chinese trade data that showed a 18.1% decline in exports during February. The UK index is pointing downwards from a technical standpoint but a break below the 6,670 support is required to suggest further losses.

German Trade data and British Production figures

The Economic Calendar today holds a number of tier-two releases from the Euro-zone and the UK. Early in the morning the German Trade Balance is scheduled for release and given the strong releases coming out of Germany during the recent period there’s a possibility that figures will surprise higher.

A couple of hours later, the UK Industrial and Manufacturing Production data are scheduled for release and the reports are expected to print near previous levels. The Pound was hit by some significant profit taking yesterday so a good reading here might allow it to regain some of the lost ground

Economic Calendar 

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