FOREX NEWS: US DOLLAR BOUNCES BACK AFTER MONDAY’S BEAT DOWN
EUR/USD
Forex News: Price action was bullish yesterday, with the pair moving above the 50 period Exponential Moving Average and above previous resistance. Some of this movement may be attributed to the Easter holidays and thin liquidity.
Technical Outlook
If the pair holds above 1.0630, we will probably see a test of 1.0680, and a consequent move into 1.0710. However, we don’t expect to see a break of the zone created by the two mentioned levels today, mostly because there are no major releases scheduled and the markets may still be affected by irregular volatility. For now the pair remains in a range and an overbought condition of one or both oscillators will probably trigger a move down.
Fundamental Outlook
At 12:30 pm GMT the U.S. Building Permits are released, showing how many permits were issued for the construction of residential buildings during the previous month. The number is expressed in an annualized format and can strengthen the US Dollar if it comes out above the forecast, which for today is 1.25M; however, more often than not the impact of this indicator is medium, not high.
GBP/USD
The Pound won the battle against the US Dollar yesterday and the pair moved strongly above the resistance located at 1.2550. This sets the stage for a continued climb, into the next resistance zone.
Technical Outlook
The strong move above 1.2550 is likely to extend into the high at 1.2615 but it should be noted that the Relative Strength Index has reached its 70 level, thus indicating an overbought condition of the pair. This increases the chance of a move lower to re-test the recently broken level (1.2550) before 1.2615 can be reached.
Fundamental Outlook
The pair will be affected only by the U.S. indicator mentioned above, because the United Kingdom didn’t schedule any important releases.