FOREX NEWS: SUPPORT HOLDS, BULLS STEP BACK INTO THE GAME
EUR/USD
Forex News: U.S. Consumer Price Index disappointed Friday by showing a change of only 0.2% (forecast 0.3%), but also the Retail Sales showed a 0.4% change compared to the expected 0.6%. All this combined with rumours of ECB tapering the QE, triggered a strong move up.
Technical Outlook
Friday’s move up was fast and strong and broke the 50 period Exponential Moving Average to the upside, thus making the short term bias bullish. However, it must be noted that usually, moves like this one are followed by a counter move or a period of stagnation so we might see a descent into 1.0900 and the 50 EMA. If this support zone holds, the next destination will be 1.0950.
Fundamental Outlook
Today there are no major releases scheduled for either the US Dollar or the Euro, so the technical aspect will prevail and will be the main market mover.
GBP/USD
Friday the pair bounced at support following weak U.S. CPI and Retail Sales data but the bullish advances weren’t substantial and overall we had a slow session, below the 50 period Exponential Moving Average.
Technical Outlook
The support at 1.2855 (1.2850) rejected price twice during the recent period and this may be an indication that the bears lack the strength to clearly end the uptrend. The upside is capped by the 50 period Exponential Moving Average and as long as the pair is trading between these two barriers, our short term bias is neutral. A strong break will be probably followed by an extended move in that direction.
Fundamental Outlook
Similar to the United States and the rest of Europe, the United Kingdom didn’t schedule major news releases, so the technical side will decide the pair’s direction.