FOREX NEWS: MORE THAN A RETRACEMENT? US DOLLAR WAVERS AGAINST COUNTERPARTS
EUR/USD
Forex News: The German ZEW Economic Sentiment survey posted a reading of 19.5, much better than the anticipated 13.2, so yesterday’s session mostly belonged to the bulls but resistance wasn’t yet threatened.
Technical Outlook
Currently the pair is in a retracement that will probably extend into the resistance located at 1.0630 and into the 50 period Exponential Moving Average. The way price will react when (and if) it reaches that zone, will offer clues about the next move: if it will show difficulties breaking the zone, then the retracement up will probably end and we will see another test of 1.0570. On the other hand, an easy break will make 1.0680 the next destination. Our view is slightly bearish after a touch of the 50 EMA.
Fundamental Outlook
The Euro and US Dollar will not be affected today by major economic releases, so the technical aspect will be the deciding factor for direction.
GBP/USD
British inflation improved as shown by yesterday’s CPI release (actual change 2.3%, expected 2.2%) and this was one of the reasons for the climb above the 50 period Exponential Moving Average and for the break of the bearish trend line.
Technical Outlook
The break above the 50 EMA and above the bearish trend line shows that the current move is more than a simple retracement, so it’s very likely to see an extended climb, possibly into 1.2550. It must be noted that at the time of writing the resistance zone around 1.2480 is still holding so we may see a small bounce lower before the level is broken. Also, if the pair reaches 1.2550 it will probably retrace on the way there, meaning that is will not shoot up in a straight line.
Fundamental Outlook
At 8:30 am GMT the Pound will be affected by the release of the British Claimant Count, an indicator that shows changes in the total number of persons who asked for unemployment related social help. A higher number signals decreased economic activity and usually weakens the Pound but the impact is often mild. Today’s forecast is a change of -10.2K, while the previous was -11.3K.