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The GBP/EUR exchange rate continues oscillating within a relatively well-defined range which should hold this week.

The Pound-to-Euro exchange rate is currently quoted at 1.1296 having opened the new week at 1.1303.

The overall outlook for Pound Sterling versus its European counterpart has not changed very much from the previous week with the exchange rate continuing to trade a sideways range roughly between the 1.1100 and 1.1500 levels.

Our technical studies do however maintain there is an overall upside bias which favours an eventual breakout higher once the sideways mode has finished but as we have been saying for some time - patience is required by those looking for a better exchange rate.

Elias Haddad, a foreign exchange strategist with Commonwealth Bank Australia, says the Pound will "consolidate over the coming week supported by favourable Brexit developments and encouraging UK labour market conditions."

But why do we believe the conversion remains longer-term bullish and therefore expect the range to eventually resolve in a breakout higher?

Our bullishness comes from the fact the pair has broken above a major trendline drawn from the 2015 highs (see below) which is a bullish indication in itself, and the look-and-feel of the chart also suggests the pair will probably go higher rather than lower.

To confirm a breakout from the range we would ideally wish to see more than simply a break above the range highs at 1.1513.

We would also like to see the exchange rate clear the R1 monthly pivot at 1.1560, which is likely to present a significant obstacle to further upside, and ideally see a clearance signaled by a move above 1.1600 for confirmation of more upside, to a target at 1.1690, just below the R2 monthly pivot at 1.1693.

Pivots are calculated from the previous month's price data and are levels where prices often stall, pull-back or even reverse.

Pivots present traders with an opportunity to sell (in the case of an uptrend) in anticipation of a pull-back, which adds to the supply at that level, further enhancing the bearish pressure.

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Data and Events to Watch for the Pound

Brexit related news will likely be the key driver of any big Sterling moves from a domestic perspective we believe.

"Faced with widespread criticism that the government’s plans for the next phase of Brexit talks are, at best, unclear, PM May and several ministers are set to deliver a series of speeches seeking to clarify the government’s position, demonstrate that the Cabinet is unified and provide some impetus to allow PM May to move forward with transitional phase talks with Brussels," says Victoria Clarke, an ecomomist with Investec.

Clarke says we can expect a more substantial speech from May and other key Brexit ministers, probably following the planned gathering of the Cabinet at Chequers.

"For sterling and UK focused investors more broadly, that speech will be key in shaping sentiment amidst rapidly waning optimism that the UK will be able to reach a transitional arrangement deal over the coming weeks or even months," says Clarke.

Data-wise, in the week ahead December and January Unemployment data is the most significant release for the Pound.

Average earnings (ex-bonuses) for the three months to January are released on Wednesday, February 21, at 9.30 GMT and are forecast to show a 2.4% rise compared to the same 3-month period a year ago; earnings including bonuses are forecast to show a 2.5% rise.

A higher-than-expected result would put upside pressure on the Pound as it would signal to markets that the Bank of England is likely to raise interest rates by 0.25% in May, and perhaps even once more before 2018 is out.

Higher wages mean higher inflation as increased consumer demand bids prices in the economy higher, which in turn leads the Bank of England to raise interest rates. Higher interest rates tend to restrict spending growth as the cost of borrowing goes up but another side effect is a higher Sterling because higher rates tend to attract greater inflows of foreign capital as overseas investors are drawn by the promise of higher returns.

The unemployment rate in December is released at the same time and expected to remain unchanged at 4.3%.

If it drops it will be positive for the Pound as lower unemployment generally leads to higher wages as fewer job-hunters means there is less competition.

"One headwind for U.K. economic growth is that real disposable income growth weakened over the course of 2017," say analysts at Wells Fargo.

"That may be poised to change as the downward trend in the unemployment rate may eventually result in a pickup in disposable income," they continue, adding:

"That is the reason the financial market in the United Kingdom will be paying particularly close attention to the release of the latest unemployment figures on Wednesday of this coming week."

The second estimate of GDP in the last quarter of 2017 is out on Thursday at 9.30 and is forecast to slide to 1.5% compared to a year ago, from the first estimate's 1.7%.

On a quarterly basis, it is forecast to rise 0.5% from 0.4% previously.

If it falls markedly it would be negative for Sterling as lower growth generally lessens the likelihood the Bank of England will raise interest rates. It also lessens inflows from outside investors who tend to choose to put their money in fast-growing economies.

Business investment is a key gauge of confidence and growth in the economy.

Is is also extremely sensitive to Brexit politics as shown by the chart below, which shows a market slowdown post-referendum, as companies put big projects on ice until after clarification on the UK's new relationship with Europe.

The level of business investment in Q4 2017 will also be revealed in data out at the same time as GDP and is estimated to show continued growth of 0.5% quarter-on-quarter.

Data and Events to Watch for the Euro

The main releases in the week ahead are the minutes of the European Central Bank's (ECB) February monetary policy meeting, the ZEW investor sentiment survey and the Markit PMI releases for Manufacturing and Services.

The ZEW and the Markit PMI releases are seen as having forward-looking properties and the ECB minutes will reveal further detail on the stance of the various members of the ECB governing council which decides monetary policy in the EZ.

Currently, there is much speculation about when the ECB will finally stop their quantitative easing (QE) stimulus programme and start to raise interest rates. Purely from the Euro's perspective the sooner the ECB ends QE and starts raising rates the better.

The ZEW survey of financial professionals asks what they think of current economic conditions and what they think they will be like in 6-months time.

ZEW is out at 10.00 GMT on Tuesday, February 20, and is expected to show a dip in economic sentiment to 28.4 in February from 31.8 previously.

Manufacturing and services PMI's for the Eurozone in February, are released on Wednesday, February 21 at 9.00 GMT.

These are surveys of purchasing managers in the largest sectors of the economy and provide a reasonably accurate indicator of activity and growth levels before most of the 'official' government indicators are released.

They are already at a relatively high level of 58.0 for Services and 59.6 for Manufacturing and are expected to fall marginally in February to 57.7 for the former and 59.4 for the latter.

Only a dramatic collapse is likely to send the Euro so positive is sentiment currently in the Eurozone's upward growth trajectory.

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