Technical News | Daily

[GDMFX]

FOREX NEWS: ALL EYES TURN TOWARDS EUROPEAN INFLATION INDICATORS

EUR/USD
Forex News: The US Dollar continued to advance against the Euro as Fed Chair Janet Yellen maintained a hawkish attitude and the US Producer Price Index change surpassed analysts’ expectations. Price is nearing support but no attempts were made to break it.

Technical Outlook
An important support for medium term price action is ahead: 1.3520 and we are faced with another bounce-or-break scenario. However, this time we slightly favor a bounce north, mostly because the Relative Strength Index has passed the 30 level downwards, suggesting oversold conditions and from a medium term perspective, the pair has been ranging. If the current support is broken, the next destination is likely to be 1.3480 (visible on a Daily chart).

Fundamental Outlook
The day’s main event will be the release of the European Consumer Price Index scheduled at 9:00 am GMT and expected to remain unchanged at 0.5%. ECB’s inflation target is just below 2% and the current CPI value is considered too low, thus an even lower value would be detrimental for the Euro.

At 2:00 pm GMT the Philly Fed Manufacturing Index comes out, showing the opinions of about 250 manufacturers from the Philadelphia district regarding current economic and business conditions. The expected value is 15.6, a decrease from the previous 17.8 and lower numbers usually weaken the greenback.

GBP/USD
The pair had a mixed trading day yesterday and price remained confined between support and resistance despite signs of improving job market in the United Kingdom.

Technical Outlook
Price is still on its way to 1.7095 following a bounce off 1.7180 resistance zone. The Relative Strength Index doesn’t show an extreme reading so there is no major reason to believe that bulls will take back control of the pair unless the US economy will show surprising figures.

Fundamental Outlook
The United Kingdom has a calm day ahead in terms of economic releases so all eyes will turn towards the United States events.

[GDMFX]

FOREX NEWS: SUPPORT LEVELS AHEAD. A BOUNCE-OR-BREAK SCENARIO UNFOLDS

EUR/USD
Forex News: The pair touched 1.3520 support yesterday but the European CPI remained unchanged and price stalled. The US Manufacturing Index for the Philadelphia district posted a surprisingly good value but the release just briefly strengthened the US Dollar.

Technical Outlook
The bears’ run seems exhausted and the Relative Strength Index is starting to climb out of oversold territory, a fact which suggests that support is still too strong for the sellers to break and that a bounce up might be next. However, yesterday’s ranging price action leaves the door open for both a bounce and a break. First resistance is located at 1.3585 while support sits at 1.3480 (if the current level is broken).

Fundamental Outlook
The sole release that can trigger sharp moves is the US Consumer Sentiment which is a leading indicator of consumer spending because usually when people are optimistic about the country’s economic conditions, they tend to spend more. The release is scheduled at 1:55 pm GMT and the expected figure is 83.5, a rise from the previous 82.5; if analysts’ forecast is surpassed, we are likely to see US Dollar strength.

GBP/USD
The Pound wasn’t affected by major news releases yesterday and the pair continued to move down towards 1.7095 as predicted. The US release helped the bears achieve this target.

Technical Outlook
For medium term movement, the support located at 1.7063 is very important but the first barrier in front of falling prices is the current level of 1.7095. A break of both these levels would indicate that the pair is ready for a bigger retracement and that the uptrend is starting to fade away. A bounce higher could potentially generate a climb back into 1.7180 area of resistance.

Fundamental Outlook
Ahead we have another day that lacks major United Kingdom news, thus price direction will be mainly affected by the technical factors and by the US release.

[GDMFX]

FOREX NEWS: A LACKLUSTER FUNDAMENTAL SCENE TRANSLATES INTO A SLOW MONDAY

EUR/USD
Forex News: Friday’s trading session was characterized by a major reversal of what seemed to be a clear break of support. The US Consumer Sentiment survey showed a small decrease but the release didn’t have major impact on the pair.

Technical Outlook
Once price entered the zone created between 1.3520 and 1.3480 it was immediately rejected higher. This fact shows that bulls still have underlying strength and that a break of support is a low probability occurrence. The Relative Strength Index continues to move upwards, coming from an oversold condition and for today, we expect higher prices but a slow, ranging day is also a distinct possibility since no major economic indicators are released.

Fundamental Outlook
The German Bundesbank will release their Monthly Report at 10:00 am GMT, containing statistical data and analysis of current and future financial conditions. The event tends to have a higher impact if Bundesbank’s viewpoint differs from the one shown by the ECB.

GBP/USD
The pair had mixed direction Friday as the bears controlled the first part of the day but the Pound erased almost all losses during the second part. Support was tested but price was price higher after a brief dip below.

Technical Outlook
The fact that price was rejected after trying to break 1.7063 may very well be a sign that bulls are ready to resume upwards movement and to take the pair into 1.7180 once again. Even if such a move occurs, we don’t believe the entire distance will be traveled in one day and at the moment 1.7095 sits in front of rising prices. We anticipate a ranging day, with price moving above and below the level which was just mentioned.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today, thus price action will be mainly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: MARKET PICKS UP DIRECTION AHEAD OF US INFLATION DATA

EUR/USD
Forex News: Yesterday’s trading session was mostly characterized by indecision and we saw the pair move higher just to drop immediately to touch support again. Overall the direction was mixed and price had ranging behavior.

Technical Outlook
For today we expect a more directional price action as the pair will probably break away from the current level of 1.3520. However, the direction of the move will be mostly influenced by the US economic data due to be released today, because the technical side of the market doesn’t hold any special clues. Yesterday’s high (1.3550) will potentially act as resistance while 1.3520 – 1.3500 zone still acts as support.

Fundamental Outlook
The day’s main event is the release of the US Consumer Price Index, scheduled at 12:30 pm GMT. A small change is expected from the previous 0.4% to 0.3%, a fact which would suggest that inflation has slowed down and could potentially weaken the US Dollar. AT 2:00 pm GMT the US Existing Home Sales numbers are released, showing the change in the annualized number of houses sold during the last month. If the number of houses sold increases, this often means that the buyers will spend additional money for furniture, house appliances, electronic devices, etc., thus spurring consumer spending. It also indicates that people are confident in economic conditions since a house is purchased usually when the economy is thriving. Today’s expected number is 4.98M, an increase from last month’s 4.89M.

GBP/USD
The lack of major economic releases generated a ranging day for the GBP/USD as well. Price moved between 1.7095 and 1.7063 without being able to break free for the entire day.

Technical Outlook
If the bears can take price below 1.7063 and at least one four-hour candle will close below this level, we are likely to see a touch of 1.7010 support next. A move above 1.7095 will open the door for uptrend resumption and possibly a touch of 1.7080 resistance zone (even if this comes true, the distance is too big to be traveled in a single day).

Fundamental Outlook
AT 10:00 am GMT the Confederation of British Industry will announce the Industrial Orders Expectations. This is a survey based on the opinions of about 550 manufacturers which shows the expectations of order volume for the next 3 months. Analysts’ forecast is a decrease from the previous 11 to 9, a fact which would be detrimental for the Pound if it were to come true.

[GDMFX]

FOREX NEWS: BEARS BREAK SUPPORT. SOME CORRECTION EXPECTED

EUR/USD
Forex News: The US Dollar strengthened yesterday against the Euro as speculation of Fed increasing interest rates took over the market. The American Consumer Price Index came out as anticipated, at 0.3%.

Technical Outlook
The pair finally broke the support zone created around 1.3500 and is now headed for the next important level of 1.3400 seen on the daily chart above. However, from a four hour chart perspective, the Relative Strength Index has passed the 30 level to the downside once again, suggesting an oversold condition of the market. This indicates that upside corrections are likely to happen today and we expect moves above 1.3480 before price can resume bearish movement.

Fundamental Outlook
Today price action will be dictated mainly by the technical factors since no major economic indicators are released by either the United States or Europe.

GBP/USD
Price moved below 1.7063 yesterday on the back of US Dollar strength but the gains weren’t as significant as the ones seen against the Euro. The pair continues to lack clear direction but the long term uptrend is severely weakened.

Technical Outlook
The first barrier in front of the bears is located at 1.7010 but for the time being the support at 1.7063 is still not clearly surpassed. The four hour candle has long upper and lower wicks, a fact which indicates indecision and shows that control doesn’t belong to either side completely. The pair’s direction will be decided today by the fundamental aspect.

Fundamental Outlook
At 8:30 am GMT the votes on the latest BOE interest rate will be made public, showing how many MPC members voted for a rate change and how many voted to keep the rate unchanged. Analysts predict that all 9 members voted to keep rates unchanged and if this forecast comes true, the impact of the release will be mild.

At 11:45 am GMT, BOE Governor Mark Carney will speak in Glasgow at the Commonwealth Games Trade and Investment conference. As always, his speeches can be accompanied by increased volatility and sudden moves, thus caution is recommended.

[GDMFX]

FOREX NEWS: MANUFACTURING DATA BRINGS THE EURO OUT OF CONSOLIDATION PHASE

EUR/USD
Forex News: Price moved sideways for the entire day yesterday as no major economic indicators were released by either the United States or Europe. The trading session was extremely slow and no important levels were broken.

Technical Outlook
The pair almost paused yesterday, consolidating below 1.3480 and moving in a 20 pip range for almost the entire day, making trading very difficult. Also, yesterday’s price action doesn’t add any clues to the pair’s next direction so we maintain our belief that price will correct slightly to the north before dropping further. On a four hour chart the Relative Strength Index is coming out of oversold territory, a fact which adds to the bias showed above.

Fundamental Outlook
The Euro will be influenced today by two releases: at 7:00 am GMT the French Manufacturing PMI is scheduled and at 7:30 am GMT, the same indicator for the German economy comes out. The French PMI is expected to increase from 48.2 to 48.5 while the German PMI is anticipated to change from 52.0 to 52.2. These are surveys derived from the opinions of purchasing managers from the Manufacturing sector and better readings show optimism, usually strengthening the single currency.

GBP/USD
All members of BOE’s Monetary Policy Committee voted to keep rates unchanged but the Minutes of their latest meeting were a bit more dovish than market participants anticipated and the Pound weakened throughout the day as a result.

Technical Outlook
We expect the current direction to continue until 1.7010 is touched as this is the first level of support and it is likely to act as a magnet for price. Yesterday price moved north to touch 1.7095 and immediately bounced lower, showing that this level is now resistance. If the Relative Strength Index will indicate oversold conditions once support is touched, the probability of a move north will increase.

Fundamental Outlook
The main event for the Pound will be the release of UK’s Retail Sales, scheduled at 8:30 am GMT. Sales made at a retail level represent a major part of the economy and thus hold a great importance for the Pound’s strength. The anticipated change is 0.2%, compared with last month’s -0.5%, a fact which would strengthen the Pound if it were to come true.

[GDMFX]

FOREX NEWS: BEARS IN CONTROL BUT BULLISH PRESSURE MOUNTS

EUR/USD
Forex News: Yesterday the Euro was strongly affected by a German survey which showed that optimism among purchasing managers from the Manufacturing sector has increased. The better than expected value reversed a previous drop generated by the French counterpart of the same indicator.

Technical Outlook
At the moment price is re-testing the recently broken level of 1.3480 and if this results in a bounce lower, the level will turn into resistance and the door will be open for a move towards 1.3400 which is the next support. If 1.3480 doesn’t become resistance, the next level that can stop bullish movement is located at 1.3500.

Fundamental Outlook
At 8:00 am GMT the German IFO Business Climate is released and expected to show a value of 109.6. The survey draws its importance from the large sample of about 7,000 businesses which are asked to rate the current economic conditions and to give a 6-month outlook. Under normal circumstances, better than anticipated numbers strengthen the Euro and push the pair higher.

The US Durable Goods Orders come out at 12:30 pm GMT and a hefty increase is expected: 0.4% from the previous -0.9%. This is a leading indicator of production since more orders suggest that producers will have to increase their activity in order to fill them.

GBP/USD
United Kingdom’s Retail Sales disappointed as the value was lower than forecast and this fact triggered Pound weakness which took the pair below support.

Technical Outlook
The level at 1.7010 was broken decisively and lower prices may follow, but before that can happen, a pullback to the upside is very probable; the Relative Strength Index has already passed the 30 level, reaching oversold territory, a fact which increases bullish pressure. The first potential resistance is now located at 1.7010 while support sits at 1.6950 followed by 1.6920.

Fundamental Outlook
United Kingdom’s most important gauge of economic performance is announced today at 8:30 am GMT: the Gross Domestic Product. No change is expected from last month’s value of 0.8% but any fluctuations will most likely have a big impact.

[GDMFX]

FOREX NEWS: MIXED PRICE ACTION AHEAD OF US HOUSE-MARKET DATA

EUR/USD
Forex News: Friday’s entire trading session was controlled by the bears as the US Dollar benefited from a better than expected value of the Durable Goods Orders and the Euro was weakened by a disappointing German

Technical Outlook
The current direction is likely to remain unchanged until price reaches 1.3400 which is the next support. The Relative Strength Index shows an oversold condition of the pair, a fact which increases the possibility of bullish corrections. If this will be the case, the first place where price can resume downwards motion is the resistance located at 1.3480. It is also possible to see ranging price action, considering the fact that Monday’s are usually slow days and that Friday price moved pretty strong compared to its latest behavior.

Fundamental Outlook
The only notable event of the day is the release of the US Pending Home Sales numbers scheduled at 2:00 pm GMT. The indicator shows the change in the number of houses under contract to be sold upon the completion of a final transaction and usually a higher value is beneficial to the US Dollar; today’s expected change is -0.2%, a major drop from the previous 6.1%.

GBP/USD
The pair exhibited ranging price action Friday as the release of the American Durable Goods Orders didn’t seem to affect the Pound too much.

Technical Outlook
Price is likely to hit 1.6950 before retracing higher, but if the level will be broken to the downside, the next support is located at 1.6920 and we don’t expect it to be broken today. To the upside the first target is 1.7010 and we might see moves in close vicinity of this level depending on the outcome of the US Pending Home Sales release.

Fundamental Outlook
The United Kingdom didn’t schedule any news releases for today so price will be mainly affected by technical factors and the US house data.

[GDMFX]

FOREX NEWS: US DOLLAR AFFECTED BY CONFIDENCE AMONG AMERICAN CONSUMERS

EUR/USD
Forex News: Yesterday’s price action was slow and lacked clear direction as both the US Dollar and the Euro were little affected by news and economic indicators. The bulls were slightly more active but price traded in a narrow range.

Technical Outlook
Price is moving upwards, coming from oversold territory and this behavior is likely to continue until the Relative Strength Index will reach its 50 level. The medium term trend is bearish and moves north should be considered just corrections, not a change of trend; resistance is located at 1.3480 and support at 1.3400.

Fundamental Outlook
The Euro will not be affected by major news releases today and the US Consumer Confidence will be the main market mover for the Dollar. The survey is scheduled for release at 2:00 pm GMT and the anticipated value is 85.5, a small increase from the previous 85.2. Confidence among consumers is a leading indicator of consumer spending, thus higher than anticipated numbers usually strengthen the US Dollar.

GBP/USD
US Dollar weakness was seen throughout yesterday and the pair moved slowly upwards for almost the entire day. The disappointing value of the US Pending Home Sales also played a role in this bullish move.

Technical Outlook
Yesterday’s price action cleared the oversold condition of the Relative Strength Index and this opens the door for short term downtrend resumption. The first target to the south is 1.6950, followed by 1.6920 while potential resistance sits at 1.7010. We must keep in mind that from a long term perspective the pair is in a clear uptrend, a fact which increases the chances of bullish moves.

Fundamental Outlook
The Pound will be affected today by the release of the Net Lending to Individuals. This indicator shows the change in the total value of loans granted to consumers and is also a leading indicator of consumer spending. A higher value suggests that consumers are willing to spend money and banks are comfortable granting loans, a fact which usually strengthens the Pound. The release is scheduled at 8:30 am GMT and the expected value is 2.6B, a slight decrease from last month’s 2.7B.

[GDMFX]

FOREX NEWS: ALL THE INGREDIENTS FOR A MARKET STORM ARE PRESENT. MAJOR US EVENTS SCHEDULED

EUR/USD
Forex News: The US Dollar strengthened yesterday on the back of improved American consumer confidence as shown by a report which came out with a reading of 90.9 compared with the anticipated value of 85.5. Sellers controlled the day but the distance traveled wasn’t spectacular.

Technical Outlook
Price is close to the support located at 1.3400 and we consider that today this level will be touched. The technical aspect of the market will be greatly overshadowed by the fundamentals but keep in mind that the Relative Strength Index is moving again below the 30 level, a fact which indicates an oversold market and favors bullish moves. Support is still located at 1.3400 while resistance sits at 1.3480.

Fundamental Outlook
The first event of the day is the release of the German Consumer Price Index, scheduled at 12:00 pm GMT and expected to decrease slightly from the previous 0f 0.3% to 0.2%. Such a decrease would be detrimental for the Euro as German inflation accounts for the major part of Euro Zone’s inflation.

The ADP Non Farm Employment Change is released at 12:15 pm GMT, showing the change in the number of jobs created during the last month. The report is put together by a privately owned company and tries to mimic the more important Government issued data which comes out 2 days later. The expected number is 234K and better numbers usually
strengthen the greenback.

At 12:30 pm GMT the American Advance Gross Domestic Product is announced with a hefty increase expected: 3.1% while last month’s value was -2.9%. Such a big change would benefit the Dollar as the GDP is the main gauge of an economy’s performance and this is the earliest version which usually has the highest impact.

Later in the day, at 6:00 pm GMT the American interest rate is announced but no change is anticipated and the FOMC Statement which accompanies the rate decision will be a more important market mover as it outlines possible future rate changes and the pace of the bond-buying program.

GBP/USD
The Pound was little affected by economic releases yesterday and Dollar strength took the pair below minor support.

Technical Outlook
A strong support level is ahead: 1.6920; price is likely to stall or even reverse here, considering also the position of the Relative Strength Index, but as we mentioned above, the US Dollar will be highly affected today by economic data and the technical aspect will be secondary. The next strong and confirmed support (if 1.6920 is broken) is located at 1.6700 while first resistance sits at 1.7010.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases and all eyes will be focused on the United States.

[GDMFX]

FOREX NEWS: SUPPORT TURNS RESISTANCE? PRICE ACTION WILL TELL

EUR/USD
Forex News: The US Dollar gained on the back of a value of the American Gross Domestic Product which surpassed analysts’ expectations. During the Fed announcements the greenback initially added to previous gains but it soon started to weaken, given the dovish attitude of the Statement.

Technical Outlook
Support at 1.3400 was broken during the day but price immediately returned to test it from below. The cluster of data released yesterday didn’t create unidirectional movement and this brings us to a crossroad: if previous support will turn into resistance, price will likely continue downwards into the next major support which is located at 1.3295, but otherwise, the break of support will prove to be a false one and the pair will be headed north. For the time being, yesterday’s low located at 1.3366 might act as minor support.

Fundamental Outlook
The fundamental scene calms down a bit today as the only major event is the release of the Euro Zone Consumer Price Index scheduled at 9:00 am GMT and expected to remain unchanged at 0.5%. ECB’s target for inflation is just below 2.0% and the current value is considered too low, thus an even lower number would be detrimental for the Euro and would most likely drive the pair south.

GBP/USD
US Dollar strength seen throughout the day allowed the bears to break the major support located at 1.6290 but once the FOMC Statement was released, the Pound managed to erase some of the previous losses.

Technical Outlook
If the break of 1.6920 wasn’t a false one and it can be sustained, it means that a major victory was scored by the bears and the medium term balance shifts in their favor. Note that the Relative Strength Index is still in oversold territory and tries to move out of it, a fact which favors bullish moves and if these types of moves occur, the first resistance and target is located at 1.6950.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today and price direction will be mainly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: NON FARM PAYROLLS – THE WEEK’S FINAL MARKET MOVER

EUR/USD
Forex News: The pair had mixed direction yesterday as the Euro was weakened by a disappointing value of the Consumer Price Index, but apparently the US Dollar wasn’t strong enough to take the pair significantly lower.

Technical Outlook
From a four-hour chart perspective the pair is in a clear downtrend but signs of weakness are present although the support at 1.3400 was broken and was tested from below several times (visible on the lower time frames). A sign of weakness is the fact that bears failed to break the low at 1.3366 even if 1.3400 turned into resistance; also, the Relative Strength Index spent a lot of time hugging the 30 level which suggests an oversold market. However, today’s direction will be decided by the fundamental rather than the technical aspect.

Fundamental Outlook
The day’s market moving event is the release of the US Non Farm Payrolls which is the most important jobs-related data for the US economy and tracks changes in the number of employed people during the previous month, excluding the farming sector. The release is scheduled at 12:30 pm GMT and the expected change is 230K while last month’s number was 288K. Such a decrease would weaken the greenback and drive the pair higher.

GBP/USD
The Pound continued to lose ground to the US Dollar yesterday and we saw the bears in control for the most part of the day. Broken support was successfully re-tested from below and price bounced lower.

Technical Outlook
The Relative Strength Index is trading below the 30 level for an extended period of time and the short term downtrend is in need of a retracement higher. Yesterday’s low will most likely act as minor support and if today the bears don’t manage to break it, we will most likely see higher prices. The US Dollar will be highly affected by the NFP release and the technical aspect will be secondary.

Fundamental Outlook
United Kingdom’s Manufacturing PMI will be released today at 8:30 am GMT and expected to drop slightly from the previous 57.5 to 57.2. This survey is based on the opinions of purchasing managers from the manufacturing sector and acts as a leading indicator of economic health so better than expected numbers will probably strengthen the Pound.

[GDMFX]

FOREX NEWS: US DOLLAR WEAKENED BY EMPLOYMENT FIGURES. POUND AFFECTED BY CONSTRUCTION DATA

EUR/USD
Forex News: Friday’s main event was without a doubt the disappointing number shown by the US Non Farm Payrolls (actual 209K; expected 231K). As a result, the US Dollar weakened and the pair moved above resistance.

Technical Outlook
Today we expect a quiet day, with mostly ranging price action as the pair will probably take a “breather” after Friday’s strong move. However, the latest momentum favors the bulls and the first barrier in front of rising prices is located at 1.3445; support sits at 1.3400 but we don’t expect this level to be broken today.

Fundamental Outlook
The fundamental scene lacks major economic indicators today and this fact adds to our belief that price will not make any spectacular advances.

GBP/USD
The Pound was weakened Friday by a worse than anticipated Manufacturing PMI and that’s why the bulls couldn’t capitalize on the disappointing value of the US Non Farm Payrolls. The day belonged to the bears as price closed lower than the opening of the day.

Technical Outlook
Pound weakness continues to be seen and the bears continue to dominate although the US economy shows signs of contraction and the Relative Strength Index is trading below the 30 level for an extended period of time. First potential support is represented by Friday’s low (1.6809) but today’s price action will be mainly influenced by the value of the Construction PMI.

Fundamental Outlook
At 8:30 am GMT the day’s only notable indicator of the day is released: United Kingdom’s Construction PMI. This is a survey derived from the opinions of purchasing managers from the Construction sector and acts as a leading indicator of economic health. The anticipated value is 62.1 which is a decrease from the previous 62.6 and lower than expected numbers will most likely weaken the Pound further.

[GDMFX]

FOREX NEWS: ECONOMIC DATA BRINGS PRICE OUT OF MONDAY’S TIGHT RANGE

EUR/USD
Forex News: Yesterday’s trading session lacked volatility almost completely as the market took a “breather” after Friday’s stronger than usual movement. No economic indicators were released and this contributed to the ranging price action.

Technical Outlook
The minor resistance created at 1.3445 wasn’t threatened yesterday but this will be the first barrier which the bulls need to break in order to weaken last month’s downtrend. Support is located at 1.3400 and until either one of the mentioned levels is broken, the market will remain in a ranging phase. For the time being our bias is neutral, expecting a breakout.

Fundamental Outlook
The Euro Zone Retail Sales change percentage is released today at 9:00 am GMT and expected o increase to 0.4% from the previous 0.0%. Higher numbers suggest increased economic activity and usually strengthen the Euro as the retail sector is a major part of the European economy.

At 2:00 pm GMT the US Non Manufacturing PMI is released, showing the opinions of purchasing managers outside of the manufacturing sector about economic and business conditions. The expected value is 56.6, an increase from the previous 56.0 and under normal circumstances, higher than anticipated values are beneficial for the US Dollar.

GBP/USD
United Kingdom’s Construction PMI showed yesterday a slightly better than anticipated reading and as a result the Pound climbed but overall we had a slow trading day.

Technical Outlook
For the time being the bulls lack the strength needed to reverse the medium term downtrend and we are likely to see another encounter with the support located at 1.6809. If this potential encounter will occur, and support will hold, price is likely to shoot up, considering the fact that the pair needs a bullish correction after such an extended drop as the one seen during the last month.

Fundamental Outlook
United Kingdom’s Services PMI is announced today at 8:30 am GMT and expected to increase from the previous 57.7 to 58.1. The indicator is an index derived from the opinions of purchasing managers from the Services sector regarding current and future business conditions and acts as a leading indicator of economic health. Readings above 50 indicate optimism and numbers above estimates usually strengthen the Pound, driving the pair higher.

[GDMFX]

FOREX NEWS: US DOLLAR CONTINUES ITS ADVANCE. EURO BULLS FIGHT BACK

EUR/USD
Forex News: The US Dollar gained against most of its counterparts as yesterday’s reports showed improvements for the US economy and traders’ interest for the American currency was renewed.

Technical Outlook
The pair fell for almost the entire day and the downtrend has new found strength as 1.3400 support was clearly broken. The next important support level is located at 1.3295 but the current level of 1.3365 is very likely to stop short term movement as we will probably see price stall here. The day ahead lacks major economic releases thus ranging price action might be in order.

Fundamental Outlook
The German Factory Orders are announced at 6:00 am GMT and expected to increase from -1.7% to 0.5%, a fact which would benefit the Euro; later in the day, at 12:30 pm GMT the US Trade Balance is released, showing the difference between imported and exported goods. The expected figure is -44.2B and values closer to zero will most likely strengthen the greenback. Both indicators usually have a medium-impact on the market but surprising numbers can increase their importance.

GBP/USD
United Kingdom’s Services PMI posted a better than expected value and momentarily strengthened the Pound; however, the rally couldn’t be continued and the Dollar erased some of the Pound’s early gains.

Technical Outlook
The first logical place where downwards motion can be resumed is the resistance located at 1.6920, but considering the way the pair has been moving lately, we might see this resumption occur before the level is hit. The US Dollar is strong at the moment and bullish moves should be regarded as corrections, not reversals of the medium term downtrend. The first level of interest to the downside is 1.6809.

Fundamental Outlook
The main Pound-affecting event of the day is the release of the UK Manufacturing Production which is expected to change to 0.7% from last month’s -1.3%. The indicator measures change in the output produced by the manufacturing sector and is considered a high-impact indicator; the time of the release is 8:30 am GMT and better values will most likely strengthen the Pound.

[GDMFX]

FOREX NEWS: ECB PRESS CONFERENCE: THE DAY’S MOST INFLUENTIAL EVENT

EUR/USD
Forex News: The Euro dropped yesterday as the German Factory Orders showed an extremely disappointing figure, while demand for the US Dollar increased on the back of a better than expected value of the American Trade Balance.

Technical Outlook
After a brief stall at 1.3365 minor support, the pair resumed bearish price action and broke the level with relative ease. If this previous minor support will turn into resistance today (after a test from below, followed by a potential bounce lower), the next target will become the key level at 1.3295, but today price direction will be heavily influenced by Mario Draghi’s speech at the ECB Press Conference.

Fundamental Outlook
At 11:45 am GMT the ECB will announce their decision regarding the Interest Rate (no change is anticipated) but the real market mover will probably be the Press Conference held 45 minutes later. ECB President Mario Draghi will read a prepared statement and afterwards, he will answer journalists’ questions about monetary policy, rate changes and economic recovery plans. This second part of the Press Conference is usually the one that creates the highest volatility as traders around the world try to interpret Draghi’s attitude and answers. We recommend caution if trading at the time because price action can be erratic during the Conference.

GBP/USD
United Kingdom’s Manufacturing output showed a figure of 0.3%, lower than the anticipated 0.7%, a fact which weakened the Pound and allowed the US Dollar to resume the pair’s downwards movement.

Technical Outlook
Yesterday’s price action created minor resistance around 1.6885 and the first support is located at 1.6809. The medium term downtrend seems to be resumed but as a confirmation, the level at 1.6809 must be broken today. Bearish pressure is present and the Pound is weakened by the latest disappointing figures but a major role will be played today by the BOE decision regarding the interest rate.

Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the interest rate and although no changes are anticipated (currently the rate is set at 0.50%), the event is likely to generate some volatility. The outcome of the rate decision is somewhat known as almost all analysts expect it to remain unchanged but caution is recommended nonetheless.

[Abdul2012]

Very interesting analysis , thank you .

[GDMFX]

FOREX NEWS: THE WEEK FINISHES WITH THE GREENBACK IN CONTROL

EUR/USD
Forex News: Yesterday’s ECB Press Conference generated mixed movement as the pair reversed direction several times. ECB President Mario Draghi mentioned that rates in Europe will remain lower for a longer period than they will in the United States.

Technical Outlook
The Euro was weakened by Mario Draghi’s comments and this bearish momentum is likely to continue throughout today’s session. First support and barrier in front of falling prices is located in the zone around 1.3330 and a break would open the door for a move into the more important support located at 1.3295; first resistance is represented by the level at 1.3400.

Fundamental Outlook
Both the Euro and the US Dollar have a calm day ahead as far as economic news releases are concerned. Price action will be mostly influenced by the technical aspect.

GBP/USD
The Bank of England maintained the interest rate value unchanged and as a result the event didn’t create volatility or strong directional movement.

Technical Outlook
The pair remained confined between 1.6885 resistance and 1.6809 support. Today we are likely to see a breakout which will probably favor the bears, considering the fact that the medium term trend is down. The next major support is located at 1.6700 but we don’t expect such a distance to be traveled in one day even if 1.6809 is broken decisively; first resistance is represented by the top created around 1.6885.

Fundamental Outlook
United Kingdom’s Trade Balance is released today at 8:30 am GMT, showing the difference between imported and exported goods. The indicator is considered to have a mild impact but higher numbers than the anticipated -8.9B will most likely strengthen the Pound, driving the pair higher.

[GDMFX]

Very interesting analysis , thank you .

Dear Abdul2012,

Thanks for reading it. It is great to know that you like the analysis=)

[GDMFX]

FOREX NEWS: IRAQ TENSIONS MAKE THEIR MARK ON THE CURRENCY MARKET

EUR/USD
US planes bombed several military targets in Iraq as tensions escalated and the Americans intervened in order to prevent a massacre of religious minorities. The Dollar was negatively affected by these events and the pair climbed Friday for the entire day.

Technical Outlook
At the moment market participants are moving to safe-haven assets as the UD Dollar is considered too volatile and risky. The current rally is likely to continue thru 1.3445 resistance if the political situation doesn’t calm down; the Dollar’s movement will be highly affected by this new tension and S/R levels might be broken with ease so we recommend caution for the next days.

Fundamental Outlook
The day lacks major economic indicators and we expect slow movement but a lot depends on the developments in Iraq.

GBP/USD
Minor support was broken and the Pound weakened Friday against the greenback although the latter was affected by the Iraq crisis.

Technical Outlook
The bearish move is overextended as the Relative Strength Index is again trading in oversold territory. Today we are likely to see a move higher which can find resistance at the recently broken level of 1.6809 but, as mentioned above, price will be prone to sudden changes of direction, depending on Iraq developments. First support is located at 1.6700 but this level is not likely to be touched today.

Fundamental Outlook
The United Kingdom didn’t schedule any major news releases today but we recommend caution, considering the political environment.