FOREX NEWS: EURO IN THE SPOTLIGHT AS ECB RATE DECISION LOOMS
EUR/USD
Forex News: The euro-dollar pair wasn’t affected by major economic releases yesterday and movement was mixed, with a dip below support and a move back towards the opening of the session.
Technical Outlook
Price moved below 1.1025 and then returned to re-test the broken support; if here price will be rejected lower, then we can consider that 1.1025 has turned into resistance and we expect the pair to move lower. If price doesn’t bounce and instead continues higher, we anticipate a touch of the 50 period Exponential Moving Average. Keep in mind that today the technical aspect will be secondary to the fundamental due to the ECB rate announcement.
Fundamental Outlook
At 11:45 am GMT the European Central Bank will announce their rate decision and although no change is forecast (currently 0.00%), volatility will surely increase. Later at 12:30 pm GMT, ECB President Mario Draghi will hold the usual press conference during which he will offer insights into the rate decision and will answer journalists’ questions. This is known to be a major market mover and caution is always advised because price action is often irregular.
GBP/USD
The British unemployment situation showed improvement yesterday and as a result the pair climbed above 1.3119 and into the 50 period Exponential Moving Average, generating a bullish session.
Technical Outlook
Traders still lack a clear bias and as a result the pair reverses direction often. If today we will see a climb above the 50 period Exponential Moving Average, maybe more buyers will join in, taking price higher. The oversold condition of the Stochastic favours such a scenario but is not a sure indication that price will climb. The fundamental aspect will play an important role in today’s direction.
Fundamental Outlook
The British Retail Sales numbers come out at 8:30 am GMT and this will be the main event of the day for the Pound. The indicator shows changes in the total value of sales made at retail levels and is expected to post a figure of -0.4%, while the previous was 0.9%. Lower numbers are indicative of decreased consumer spending and this usually leads to a weaker Pound.