Technical News | Daily

[GDMFX]

FOREX NEWS: BULLS PUSH HIGHER, AIMING FOR KEY RESISTANCE

EUR/USD

Forex News: The day lacked major events and the pair moved initially lower but soon reversed direction and travelled back up, close to the opening price of the week.

Technical Outlook

It looks like the two sides are evenly balanced and that the pair might enter a ranging period, with price capped between the 50 period Exponential Moving Average and the resistance at 1.1340. For today we favour a move lower, into the moving average. A break of this line will extend the drop into 1.1240 and possibly into the bullish trend line seen above but the pair is in a short-to-medium term uptrend at the moment so we don’t exclude a move higher.

Fundamental Outlook

At 7:30 am GMT the German Manufacturing PMI is released, with an anticipated value of 53.7, almost unchanged from the previous 53.8. This survey is derived from the opinions of about 500 purchasing managers and is focused on their opinions regarding the health of the manufacturing sector. Usually, numbers above the forecast strengthen the Euro but the impact is often limited.

On the US Dollar side we have the New Home Sales, scheduled at 2:00 pm GMT and expected to show a number of 575K compared to the previous 592K. The indicator shows the annualized number of houses sold during the previous month and gauges the health of the U.S. housing market, thus higher values have a positive impact on the greenback.

GBP/USD

After another attempt to break the 50 period Exponential Moving Average, price bounced higher, generating a bullish day although the Pound wasn’t fueled by notable economic releases.

Technical Outlook

The fact that price tried for the second time to break the moving average but failed makes us anticipate a move to the upside, that will probably reach 1.3175. This level is now resistance and we expect it to reject price lower once and if it is touched. As an alternate scenario, a break of 1.3070 and the 50 EMA will probably bring in more sellers but this is less likely to occur until price climbs higher first.

Fundamental Outlook

The Pound will be affected today by the technical side and by the U.S. housing data because the United Kingdom didn’t schedule any notable economic news releases.

[GDMFX]

FOREX NEWS: RESISTANCE LEVELS HIT. WILL THE US DOLLAR START A NEW ASSAULT?

EUR/USD

Forex News: The bulls managed to take the pair into resistance yesterday despite positive U.S. housing data; however, the effects of the New Home Sales (actual 645K, forecast 575K) are likely to make their presence known and to strengthen the US Dollar.

Technical Outlook

Although the pair moved briefly above 1.1340 resistance, we expect a bounce lower from here, with the low at 1.1270 as first target. Price is trading above the 50 period Exponential Moving Average and it’s printing higher lows and higher highs so it’s clear that the pair is in an uptrend but the move up seems exhausted. The moving average is in close vicinity of the latest low so the way price behaves when and if it gets there, will offer hints about future movement. On the other hand, a break of 1.1340 will open the door for the high at 1.1366.

Fundamental Outlook

The only notable indicator on today’s calendar is the U.S. Existing Home Sales, scheduled at 2:00 pm GMT. The indicator excludes from calculation new buildings and usually has a low-to-medium impact, but higher numbers than the forecast 5.55M can strengthen the US Dollar.

GBP/USD

As expected the pair continued to climb and reached the resistance at 1.3175, generating a bullish day. Although the level was breached, we don’t consider that the move will extend much further.

Technical Outlook

The pair has moved above 1.3175 resistance but the Relative Strength Index is touching its overbought level and on top of that, bearish divergence is present. This type of divergence indicates that a move lower may soon follow and occurs when price is making a higher high but a corresponding oscillator (the RSI in this case) is just showing a lower high. If the pair returns soon below 1.3175, it means the bullish break was false and that we will see a move lower, probably into the 50 period Exponential Moving Average.

Fundamental Outlook

The Pound has another slow economic day ahead, with no major indicators on the calendar. The direction will be mainly decided by the technical aspect and to some extent, by the U.S. housing data.

[GDMFX]

FOREX NEWS: US DOLLAR SHOWS MIXED REACTION AHEAD OF JACKSON HOLE SYMPOSIUM

EUR/USD

Forex News: Yesterday the economic releases didn’t have a huge impact but after an encounter with resistance, the US Dollar gained some momentum and reached support, generating a bearish session.

Technical Outlook

The bears managed to break an important confluence zone, created by the support at 1.1270 and the 50 period Exponential Moving Average. This shows that the balance of power is starting to tilt in their favour and that we will probably see an encounter with the bullish trend line on the chart above. On the other hand, a move above the 50 EMA will open the door for a climb back into 1.1340 but the economic releases will likely be the deciding factor.

Fundamental Outlook

At 8:00 am GMT, the German IFO Business Climate survey comes out, showing the opinions of about 7,000 businesses regarding their economic expectations for the next 6 months. The large sample of this survey is what makes it important and usually numbers above the forecast 108.5, strengthen the Euro.

Later in the day, at 12:30 pm GMT the U.S. Durable Goods orders come out, with an anticipated 3.4% change, a strong increase from the previous -3.9%. If the actual number will be close to this forecast, the US Dollar is likely to strengthen.

Also keep in mind that today is the first day of the Jackson Hole Symposium and this may increase volatility because the event is attended by key financial and political personalities from across the globe.

GBP/USD

The Pound remained above 1.3175 and strengthened without apparent reason yesterday, generating a bullish day for the pair.

Technical Outlook

We expect the current climb to extend into the resistance at 1.3280 and if this barrier is broken, we may see a climb into 1.3365 during the days to come. However, the up move is exhausted and both oscillators are overbought so we rather favour a bounce lower around the 1.3280 zone. The U.S. economic indicators will have an important part to play in today’s direction and the Jackson Hole Symposium may do the same.

Fundamental Outlook

The United Kingdom didn’t schedule important economic releases but British personalities will be present at the Symposium so volatility may increase and caution is recommended.

[GDMFX]

FOREX NEWS: US DOLLAR PREPARES FOR YELLEN’S JACKSON HOLE SPEECH

EUR/USD

Forex News: Euro data released yesterday was slightly worse than anticipated while the U.S. Durable Goods Orders exceeded analysts’ expectations, yet the pair didn’t have a bearish reaction and instead moved above the moving average.

Technical Outlook

After nearly touching the support at 1.1240, the pair bounced higher and moved back above the 50 period Exponential Moving Average, setting the stage for a resumption of the uptrend. However, the current move up doesn’t show strength and in fact the entire yesterday’s session was low-volatility; this may suggest that price may be headed in fact lower, towards the bullish trend line seen on the chart above. The main levels to watch today are 1.1240 to the downside and 1.1340 as resistance; if the pair moves below the 50 EMA we favour a touch of the mentioned support.

Fundamental Outlook

At 12:30 pm GMT the U.S. Preliminary Gross Domestic Product comes out, showing changes in the total value of services and goods produced by the economy. This version is less important than the Advance, which was released already, but still, higher values than the forecast 1.1% can strengthen the US Dollar.

Fed Chair Janet Yellen will deliver a speech at the Jackson Hole Symposium at 2:00 pm GMT. The speech is titled “The Federal Reserve’s Monetary Policy Toolkit" so we can surely expect her to talk about monetary policy and usually this topic creates strong market movement.

GBP/USD

Yesterday price travelled the entire distance between resistance and support and seems like the positive U.S. economic data had a strong impact on the pair, unlike it was with the EUR/USD.

Technical Outlook

After the bearish bounce close to 1.3280, the anticipated retracement occurred, but now 1.3175 seems to have turned into support. If this level will push price higher, we expect a move into 1.3280, but a bearish break will make the 50 period Exponential Moving Average the first target. Both oscillators are coming down from overbought, favouring a bearish scenario.

Fundamental Outlook

At 8:30 am GMT the Second Estimate British GDP is released and anticipated to show a change of 0.6%, same as previous. The GDP is the gauge of overall economic performance, thus higher numbers usually have a positive impact on the currency.

We hope you had a profitable trading week and we wish you a relaxing weekend.

[GDMFX]

FOREX NEWS: US DOLLAR PREPARES FOR YELLEN’S JACKSON HOLE SPEECH

EUR/USD

Forex News: Euro data released yesterday was slightly worse than anticipated while the U.S. Durable Goods Orders exceeded analysts’ expectations, yet the pair didn’t have a bearish reaction and instead moved above the moving average.

Technical Outlook

After nearly touching the support at 1.1240, the pair bounced higher and moved back above the 50 period Exponential Moving Average, setting the stage for a resumption of the uptrend. However, the current move up doesn’t show strength and in fact the entire yesterday’s session was low-volatility; this may suggest that price may be headed in fact lower, towards the bullish trend line seen on the chart above. The main levels to watch today are 1.1240 to the downside and 1.1340 as resistance; if the pair moves below the 50 EMA we favour a touch of the mentioned support.

Fundamental Outlook

At 12:30 pm GMT the U.S. Preliminary Gross Domestic Product comes out, showing changes in the total value of services and goods produced by the economy. This version is less important than the Advance, which was released already, but still, higher values than the forecast 1.1% can strengthen the US Dollar.

Fed Chair Janet Yellen will deliver a speech at the Jackson Hole Symposium at 2:00 pm GMT. The speech is titled “The Federal Reserve’s Monetary Policy Toolkit" so we can surely expect her to talk about monetary policy and usually this topic creates strong market movement.

GBP/USD

Yesterday price travelled the entire distance between resistance and support and seems like the positive U.S. economic data had a strong impact on the pair, unlike it was with the EUR/USD.

Technical Outlook

After the bearish bounce close to 1.3280, the anticipated retracement occurred, but now 1.3175 seems to have turned into support. If this level will push price higher, we expect a move into 1.3280, but a bearish break will make the 50 period Exponential Moving Average the first target. Both oscillators are coming down from overbought, favouring a bearish scenario.

Fundamental Outlook

At 8:30 am GMT the Second Estimate British GDP is released and anticipated to show a change of 0.6%, same as previous. The GDP is the gauge of overall economic performance, thus higher numbers usually have a positive impact on the currency.

We hope you had a profitable trading week and we wish you a relaxing weekend.

[GDMFX]

FOREX NEWS: YELLEN BOOSTS THE US DOLLAR, PAIRS DROP THROUGH SUPPORT

EUR/USD

Forex News: The bears scored a major victory Friday, mostly fuelled by Fed Chair Yellen’s speech at the Jackson Hole Symposium. Several support levels were broken and now the balance has shifted towards the short side.

Technical Outlook

Friday’s fall took the pair below the 50 period Exponential Moving Average, broke 1.1240 support and the bullish trend line, making the bias clearly bearish. However, after a strong move in one direction, usually price retraces or moves sideways for a period, so we expect some bullish pullbacks today. The oversold position of the Relative Strength Index and the vicinity of 1.1185 support strengthen this view, making us anticipate bullish retracements but these will most likely be followed by another drop.

Fundamental Outlook

At 12:30 pm GMT the U.S. Personal Spending is released, showing the changes in the total value of expenditures made by U.S. individuals. The indicator has a relatively low impact on the US Dollar but higher numbers than the forecast 0.3% can strengthen it because consumer spending represents the main part of the entire economic activity.

GBP/USD

Friday, after a brief jump that took the pair into resistance, the US Dollar strengthened during Yellen’s speech and price dropped for more than 150 pips, creating a bearish trading session.

Technical Outlook

The resistance at 1.3280 is still a key level that stopped once again bullish advances and rejected the pair lower, into the 50 period EMA. As long as the bears can keep the pair below the moving average, our bias is negative and we anticipate a move into 1.3070. If the pair moves back above the moving average, we are likely to see a touch of 1.3175.

Fundamental Outlook

British banks will be closed today, celebrating their Summer Bank Holiday; this also means that no major indicators will be released and volatility may be low.

[GDMFX]

FOREX NEWS: BEARS IN CONTROL, OVERSOLD LEVELS CALL FOR RETRACEMENTS

EUR/USD

Forex News: The speed of movement slowed down yesterday but the US Dollar continued to strengthen against its peers and support was broken, creating a bearish trading session.

Technical Outlook

The current move is likely to extend into the support at 1.1150, where we expect a bullish retracement based on the oversold condition of the Relative Strength Index and Stochastic. This potential retracement can find resistance at 1.1185 and if this level rejects price, we expect a move below 1.1150, towards 1.1100.

Fundamental Outlook

At 12:00 pm GMT we take a look at German inflation with the release of the Preliminary version of their Consumer Price Index. This is a key indicator that can strengthen the Euro if it posts a reading above the forecast 0.1% (previous 0.3%).

On the US Dollar side we have the Consumer Confidence survey, released at 2:00 pm GMT and expected to show a value of 97.2, little changed from the previous 97.3. This is a leading indicator of consumer spending and higher values usually strengthen the greenback, with the opposite being true for lower values.

GBP/USD

After the break of the 50 period Exponential Moving Average, more sellers joined in and the fall extended into support. The economic scene was rather calm so the move was mostly technical.

Technical Outlook

Although the bears have short term control, we expect the pair to bounce at 1.3070 and to climb slightly, due to the oversold condition of the oscillators. However, a break of this important support would show that the bears are stronger than anticipated and would mean that further downside will follow. Even if the pair moves below support, we expect some sort of retracement to follow soon, based on the fact that the move will become overextended.

Fundamental Outlook

The United Kingdom didn’t schedule major economic announcements for today, so price direction will be influenced by the U.S. survey and by the technical aspect.

[GDMFX]

FOREX NEWS: ADP NON-FARM EMPLOYMENT REPORT – A FIRST LOOK AT U.S. JOBS DATA

EUR/USD

Forex News: The German Preliminary CPI released yesterday was slightly worse than expected and the U.S. Consumer survey was slightly better than anticipated, so the pair descended below 1.1150 after a short ranging period.

Technical Outlook

Price just pierced 1.1150 but did not break it decisively and the two oscillators are still oversold, making us anticipate a bullish retracement that will probably reach 1.1185. If this level turns into resistance and rejects the pair lower, then we can expect to see a clear break of 1.1150 and a move closer to 1.1100 but if 1.1185 doesn’t turn into resistance, we may see a climb into the 50 period Exponential Moving Average.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look at U.S. employment levels with the release of the ADP Non-Farm Employment, a report that tracks changes in the number of employed people, excluding the government and of course the farming industry. The anticipated number is 173K (previous 179K) and higher levels can strengthen the US Dollar but its impact (although high), is lower than the NFP report released Friday.

GBP/USD

The support at 1.3070 proved yesterday its importance once again and rejected price higher. However, the pair did not surpass the 50 period Exponential Moving Average so the bias is still bearish.

Technical Outlook

As long as the pair remains below the 50 EMA, we maintain a bearish stance and anticipate a break of 1.3070 but so far the sellers tried twice to break this level and each time they failed. This shows that control doesn’t clearly belong to either side and suggests that a break of the moving average will probably take price closer to 1.3175.

Fundamental Outlook

A lot will depend on the U.S. jobs data released today and this will probably be the main market mover, especially because the United Kingdom didn’t schedule major releases.

[GDMFX]

FOREX NEWS: RANGING MOVEMENT IN ANTICIPATION OF KEY U.S. JOBS DATA

EUR/USD

Forex News: Despite the oversold condition of the two oscillators, the pair grinded slowly lower yesterday and moved below 1.1150. The U.S. ADP jobs data came very close to the forecast value, thus the event didn’t have a huge impact.

Technical Outlook

The pair is en route to 1.1100 support and once it gets there, we expect the bulls to step in and take price higher, clearing the oversold condition of the Stochastic and Relative Strength Index. It’s possible to see such a retracement even before 1.1100 support is reached, because the speed of movement has decreased and the oscillators are oversold for a relatively long while. A bullish move will likely find resistance at 1.1185 and if 1.1100 is broken, price can find support at 1.1075.

Fundamental Outlook

The European scene is slow today and on the US Dollar side we have the ISM Manufacturing Purchasing Managers’ Index, scheduled at 2:00 pm GMT and expected to show a value of 52.0, little changed from the previous 52.6. The survey acts as a leading indicator of economic health, focused on the manufacturing sector and has a positive impact on the greenback if the actual number is higher than analysts’ forecast.

GBP/USD

The Pound bulls tried to move the pair above the 50 period Exponential Moving Average yesterday but overall price showed mixed direction, with sharp reversals.

Technical Outlook

After the move above the 50 EMA the pair returned close to 1.3070 and then pushed higher again. This type of movement shows that neither side in is clear control and that the next move is uncertain. Until the resistance at 1.3175 or the support at 1.3070 is broken, we consider the pair in a range and expect direction to be influenced by the economic releases scheduled today and tomorrow.

Fundamental Outlook

At 8:30 am GMT the United Kingdom will release Manufacturing data in the form of the Purchasing Managers’ Index. This is a survey derived from the opinions of purchasing managers from the manufacturing sector, regarding overall business conditions in said sector and usually has a medium impact, with higher numbers strengthening the Pound. The forecast for today’s release is 49.1, slightly higher than the previous 48.2.

[GDMFX]

FOREX NEWS: PREPARE FOR A VOLATILITY SPIKE. IT’S NFP DAY!

EUR/USD

Forex News: Yesterday the pair didn’t show a clear direction until the release of the U.S. Manufacturing PMI, which showed a value of 49.4, lower than the forecast 52.0. The greenback weakened once the indicator came out and the pair broke above resistance.

Technical Outlook

A weak US Dollar allowed the pair to climb above 1.1150 and close to 1.1185; although the distance travelled is not huge, this bullish impulse may generate a stronger climb that may reach the 50 period Exponential Moving Average. If this barrier is surpassed, we can expect to see a move into 1.1240 but if the move up proves to be short-lived, then 1.1100 will become the first bearish target. The technical aspect will be overshadowed today by the NFP release which is always a strong market mover.

Fundamental Outlook

At 12:30 pm GMT the most important U.S. jobs data is announced: the Non-Farm Payrolls (also known as Non-Farm Employment Change). This report shows changes in the number of employed people in the United States, during the previous month, excluding the farming industry and is considered a high impact indicator. In fact, almost always at the time of release, volatility increases drastically and the US Dollar moves strongly, so we recommend caution. The anticipated number is 186K (previous 255K) and as a rule of thumb, lower numbers weaken the greenback, with the opposite being true for higher numbers.

GBP/USD

The British Manufacturing PMI was much better than anticipated while the U.S. indicator with the same name showed a disappointing value. This strengthened the Pound and weakened the US Dollar, thus generating a strong bullish day for the pair.

Technical Outlook

The pair moved almost 200 pips north, broke 1.3280 and took the two oscillators in overbought territory. Strong moves are usually followed by retracements or periods of sideways movement but the main focus today will be on the U.S. jobs data and the technical side will be secondary; the levels to watch are 1.3365 as potential resistance and 1.3280 as potential support.

Fundamental Outlook

Apart from the important U.S. jobs data, the pair will be influenced by the release of the British Construction PMI, scheduled at 8:30 am GMT. The expected value is 46.6 and higher numbers are beneficial for the Pound but this indicator usually has a lower impact than the Manufacturing PMI which was released yesterday.

We hope you had a profitable trading week and we wish you a relaxing weekend.

[GDMFX]

FOREX NEWS: US DOLLAR IN FOR A SLOW DAY AS UNITED STATES CELEBRATE LABOR DAY

EUR/USD

Forex News: Friday’s highlight was the NFP release, which proved once again that it can create sharp reversals and irregular movement. The actual number was 151K, lower than the forecast 180K and this initially weakened the US Dollar but hawkish comments from a Fed official brought the pair back down.

Technical Outlook

Price dropped for almost 100 pips after the initial climb and the short-term bias is now bearish. The 50 period Exponential Moving Average offered good resistance and pushed price lower, confirming the bearish bias, so we expect a move below the support at 1.1150, probably into 1.1130. As an alternate scenario, if price climbs we don’t expect 1.1185 to be broken.

Fundamental Outlook

Today we expect a low volatility day, because U.S. banks will be closed due to Labor Day and Europe hasn’t scheduled major releases either. The only reason for volatility today may be the G20 Meetings but their impact is sometimes mild, depending on the matters discussed.

GBP/USD

The disappointing NFP number took the pair higher and although the US Dollar strengthened soon after, it didn’t manage to erase all the Pound gains. Overall the session was bullish but rejection is clearly present.

Technical Outlook

The NFP candle shows a long wick in its upper part, the two oscillators are overbought and price travelled a long distance in a relatively short while. All this makes us anticipate a retracement to the downside and a move back below 1.3280 but even if the bullish impulse generated Friday will continue today, we don’t expect the move to extend above 1.3365.

Fundamental Outlook

At 8:30 am GMT the British Services PMI is released, anticipated to show a value of 49.1, better than last month’s 47.4. This is a survey that shows the opinions of purchasing managers regarding the health of the services sector and usually has a medium-to-low impact but higher numbers strengthen the Pound.

[GDMFX]

FOREX NEWS: US DOLLAR STILL LACKS A CLEAR BIAS. TRADERS SHIFT ATTENTION TOWARDS U.S. NON-MANUFACTURING PMI

EUR/USD

Forex News: During yesterday’s trading session volatility remained relatively low and the pair moved in a 50 pip range but Friday’s low was broken; however, no major advances were made.

Technical Outlook

The support at 1.1150 pushed price higher initially but the climb lacked enough strength to reach the 50 period Exponential Moving Average and came close to the resistance at 1.1185, without threatening it. This suggests that control still belongs to the bears and that we will see an encounter with the support at 1.1130, possibly 1.1100. Once the oscillators become oversold and turn upwards, look for retracements north.

Fundamental Outlook

The day’s only notable indicator is the U.S. Non-Manufacturing PMI, scheduled for release at 2:00 pm GMT. This is a survey of purchasing managers from the services sector regarding their assessment of overall conditions in said sector. Numbers above 50 indicate optimism, strengthening the US Dollar; today’s forecast is 55.4, almost identical to the previous 55.5.

GBP/USD

The Pound strengthened yesterday on the back of a better than anticipated Services PMI (actual 52.9, forecast 49.1) but resistance wasn’t taken out and rejection signs are present.

Technical Outlook

For several days the pair is printing candles with long upper shadows (wicks) and the oscillators are overbought. These are strong signs of rejection and we expect price to change direction soon, heading for 1.3280 which may turn into support. If this level becomes support and rejects price, we will probably see another push to break 1.3365, otherwise the 50 period Exponential Moving Average is the next target but we don’t expect it to be hit during the course of one day unless exceptional developments take place.

Fundamental Outlook

Price direction today will be determined by the technical aspect and by the U.S. survey because the United Kingdom didn’t schedule important news releases.

[GDMFX]

FOREX NEWS: US DOLLAR DIPS ON WEAK DATA, POUND SOARS AHEAD OF MARK CARNEY’S TESTIMONY

EUR/USD

Forex News: The Non-Manufacturing PMI took a big hit and posted a value of 51.4, the lowest value since January 2010. The US Dollar immediately weakened and the pair broke resistance.

Technical Outlook

The weak survey for the US Services sector is likely to generate an extended move north but the current level at 1.1240 rejected strong movement in the past so the same could happen now. A clear break, followed by a re-test of the broken level will increase the chances for a continuation upwards, into 1.1340. The Stochastic is oversold, moving upwards and the Relative Strength Index is close to overbought so the oscillators show mixed signals and are not of much help.

Fundamental Outlook

The fundamental scene is calm for the US Dollar and the Euro, without any notable indicators, so the technical aspect will be the main market mover.

GBP/USD

This pair was also affected by the worse than expected United States survey and despite all signs of rejection, yesterday we had another strongly bullish day.

Technical Outlook

The dollar weakness allowed the pair to climb well above the resistance at 1.3365 despite the overbought condition of the oscillators and other rejection signs. However, now the chances of a retracement lower have increased, so we expect to see a bearish session today, or at least sideways movement as we don’t favour a continuation before the pair takes a “breather”. The levels to watch are 1.3480 as resistance and 1.3365 as potential support.

Fundamental Outlook

At 8:30 am GMT the UK will release the Manufacturing Production, an indicator that shows changes in the total value of goods produced by the Manufacturing sector; the release usually has a medium-to-high impact, with higher values than the expected -0.4%, strengthening the Pound.

Later in the day, at 1:15 pm GMT the Inflation Report Hearings take place. During these hearings, BOE Governor Carney will testify before the Parliament’s Treasury Committee on inflation expectations and economic outlook. The event usually has a strong impact on the Pound so it will likely overshadow the technical aspect, determining today’s Pound bias.

[GDMFX]

FOREX NEWS: EURO IN THE SPOTLIGHT AHEAD OF ECB PRESSER AND RATE ANNOUNCEMENT

EUR/USD

Forex News: Price action yesterday was mostly ranging and this was mostly due to the fact that no major indicators were released for either currency in the pair. Currently price is very close to 1.1240 and the next direction will probably be decided by the ECB events.

Technical Outlook

Yesterday’s sideways movement doesn’t offer a lot of clues about today’s direction and it seems like traders are waiting to see what the European Central Bank will decide regarding rates. The Relative Strength Index and Stochastic are turning downwards, close to overbought and this favours a move below 1.1240 but the technical aspect will be secondary to the fundamental.

Fundamental Outlook

Today’s highlight will be the ECB rate announcement, scheduled at 11:45 am GMT and followed at 12:30 pm GMT by ECB President Mario Draghi’s press conference. The rate sits currently at 0.00% and is not expected to change, but of course a surprise would trigger wild swings so caution is always recommended. As for Draghi’s conference, this is known to be a major market mover but the direction of the Euro will be decided by his attitude and answers to journalists’ questions.

GBP/USD

The Pound took a hit from a worse than expected Manufacturing Production report, that showed a change of -0.9% (forecast -0.4%), and the pair reversed to re-test the previous resistance.

Technical Outlook

Yesterday’s drop was triggered by disappointing economic data but the technical aspect agreed as well because the pair was clearly overbought. The level at 1.3365 was resistance and now it may turn into support if it will reject price higher, otherwise we expect a move into the 50 period Exponential Moving Average. To the upside the first potential target is yesterday’s top located at 1.3445.

Fundamental Outlook

The Pound has a calm day ahead, from a fundamental standpoint and price direction will be mostly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: ECB RATE REMAINS UNCHANGED, POUND FACES A BOUNCE-OR-BREAK SCENARIO

EUR/USD

Forex News: As expected, yesterday the European Central Bank kept the rate unchanged at 0.00% and on top of that, ECB President Mario Draghi maintained a neutral stance, so the Euro didn’t show dramatic movement.

Technical Outlook

Bullish action was seen ahead of the ECB events and during the press conference the pair had mixed reactions, moving upwards at first and nullifying the gains soon after. Now we have two long upper wicks on the last two four-hour candles and both oscillators are overbought, making us anticipate a bearish session today. If this comes true, the pair will likely find support around 1.1240 and if that is broken, then probably the 50 period Exponential Moving Average will be the next target. To the upside, 1.1340 remains the first resistance and target but a clear break of that zone today is a less likely scenario.

Fundamental Outlook

The week ends on a low note, without major economic releases; the only notable event is the start of the Eurogroup Meetings, attended by key political and financial personalities from the member states. Volatility may be triggered but this depends entirely on the matters discussed.

GBP/USD

The sellers stepped in yesterday, creating a bearish day and reaching the 50 period Exponential Moving Average. This was a much needed retracement because as mentioned previously, the pair was overextended.

Technical Outlook

We are dealing with a classic bounce-or-break scenario with the stars of the show being the 50 period EMA and 1.3280 support. If the bears manage to push the pair below this confluence zone, we will probably see an extended move south, but it must be noted that the pair is in an uptrend (starting at 1.2880) and this means that there’s an increased chance of a bounce higher. In any case, the way price behaves here is likely to determine the next medium-term direction.

Fundamental Outlook

The economic calendar is light today for the Pound so the main focus will be the technical aspect; U.K. representatives will attend the Eurogroup Meetings and this may be a reason for increased volatility.

We hope you had a profitable trading week and we wish you a relaxing weekend.

[GDMFX]

FOREX NEWS: BEARS IN SHORT-TERM CONTROL, SUPPORT THREATENED

EUR/USD

Forex News: The pair finished last week on a bearish note, dropping through 1.1240 support and touching the 50 period Exponential Moving Average. This type of movement will likely trigger an extended fall after a bullish correction.

Technical Outlook

After the failed attempt to reach 1.1340 resistance, the bears took over and managed to establish their control over the pair. If they manage to close a full candle below the 50 period Exponential Moving Average, we expect the pair to head into 1.1185 but a break of this level is not likely to happen today, mostly because we don’t have anything major on the economic calendar. Before the bearish movement can continue, we expect the pair to touch (and maybe pierce through) 1.1240 and to bounce lower soon after.

Fundamental Outlook

The economic calendar is empty for both the Euro and the US Dollar so we expect a slow Monday, with possibly ranging movement.

GBP/USD

Friday the sellers continued the move started earlier during the week and pushed the pair through two types of support. The short term bias is negative but an uptrend is still in place.

Technical Outlook

The horizontal support at 1.3280 and the dynamic support represented by the 50 period Exponential Moving Average were both broken Friday and now we see a small push up, which will possibly confirm 1.3280 as resistance. If this comes true, the pair is likely to continue downwards but the extent should be limited because the Stochastic is already oversold. Today we will probably see a ranging day, without major advances to either side.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected by major economic releases, thus the technical aspect will prevail.

[GDMFX]

FOREX NEWS: ACTION SPEEDS UP WITH THE RELEASE OF GERMAN ZEW SURVEY AND IMPORTANT BRITISH INFLATION DATA

EUR/USD

Forex News: Yesterday the economic calendar was light and the pair had trouble establishing a clear direction. Overall we had a ranging session, with price climbing at first and then dropping to erase the early gains

Technical Outlook

Price moved twice below the 50 period Exponential Moving Average and each time it returned above it but the bulls couldn’t capitalize on the bounce and didn’t push price significantly higher. This indecision will probably come to an end today and we are likely to see a more decisive move; if price descends and a full candle closes below the 50 EMA, we expect to see a move into 1.1185, otherwise the main direction will be north.

Fundamental Outlook

At 9:00 am GMT the German ZEW Economic Sentiment comes out, showing the opinions of 275 German professional investors and analysts regarding a 6-month economic outlook. Due to the nature of their jobs, these persons are well informed and their opinion matters, so higher numbers than the forecast 2.8 (previous 0.5) are viewed as beneficial for the Euro.

At the same time, ECB President Mario Draghi will deliver a speech at the 2016 Alcide De Gasperi Award ceremony, in Trento. We don’t expect this to create huge movement but surprises can always happen so we recommend caution.

GBP/USD

The Pound also had a slow start of the week but later in the afternoon the pair gained some speed and climbed above the 50 period Exponential Moving Average.

Technical Outlook

Yesterday’s climb is possibly showing that the drop from 1.3445 was a retracement in an uptrend; however, the picture is not yet clear and this doesn’t necessarily mean that we will see a resumption of the uptrend. What is certain at the moment is that price is trading above the 50 period Exponential Moving Average and above 1.3280 and these are bullish signs. That being said, our bias is bullish, aiming for a touch of 1.3365 but we don’t exclude the possibility of a drop lower.

Fundamental Outlook

British inflation data comes out at 8:30 am GMT in the form of the Consumer Price Index that is expected to show a change of 0.7% (previous 0.6%). If this forecast comes true (or if higher numbers are posted), we expect the Pound to strengthen and the pair to climb.

[GDMFX]

FOREX NEWS: US DOLLAR ADVANCES AGAINST POUND ON DISAPPOINTING BRITISH CPI DATA

EUR/USD

Forex News: Yesterday we had a very slow day, without a clear direction or notable developments. Mario Draghi’s speech was shifted 105 minutes later but as expected, it wasn’t a major market mover.

Technical Outlook

The pair is still hovering close to the 50 period Exponential Moving Average, without picking a direction and this makes our bias neutral, expecting a clear move to either side. Same as we mentioned before, a full candle that closes below the 50 EMA can be considered a clear break and may generate additional movement south, with 1.1185 as first target.

Fundamental Outlook

The economic calendar is light for both the Euro and the US Dollar but despite this, we expect stronger movement than yesterday.

GBP/USD

The British Consumer Price Index released yesterday posted a disappointing value of 0.6%, showing that inflation in not improving at the desired pace. This weakened the Pound and allowed the pair to drop through support.

Technical Outlook

The current move is very likely to touch and even pierce 1.3175 support after small retracements to the upside. Once the pair gets there and if the Relative Strength Index will be oversold, we expect a deeper retracement before a potential break of the mentioned support. If the pair reverses direction and moves straight up, the 50 period Exponential Moving Average will offer the first resistance.

Fundamental Outlook

At 8:30 am GMT we take a look at British unemployment situation with the release of the Claimant Count, an indicator that shows changes in the number of people who asked for unemployment related benefits. A higher number than the forecast 1.7K is usually detrimental for the Pound because a larger number of people without jobs means that consumer spending will drop in the future.

[GDMFX]

FOREX NEWS: U.S. RETAIL SALES, BOE RATE DECISION – THE STALEMATE MAY COME TO AN END

EUR/USD

Forex News: For the most part of yesterday the pair remained in a very tight range, mostly due to the fact that no major economic indicators were released. Later in the afternoon action picked up a bit but without a clear breakout.

Technical Outlook

The picture remains blurry as the pair cannot move away from the 50 period Exponential moving Average, which is flat and confirms the lack of bias. Today some important U.S. indicators will be released and we expect this to be the catalyst behind stronger movement; direction will be determined by the numbers posted and for the moment our bias is neutral.

Fundamental Outlook

At 12:30 pm GMT we have a cluster of events for the US Dollar: the Retail Sales release is probably the most important because sales made at retail levels represent the main part of consumer spending and this is why higher numbers than the forecast -0.1% usually strengthen the greenback.

At the same time the U.S. Producer Price Index comes out, showing changes in the price paid by consumers for the goods and services they purchase; the indicator has inflationary implications and numbers above the forecast 0.1% are beneficial for the US Dollar.

GBP/USD

The British Claimant Count showed a change of 2.4K, more than the anticipated 1.7K and this weakened the Pound at the time of release; however, most of the losses were soon erased.

Technical Outlook

The pair descended below 1.3175 but now it shows clear signs of rejection: the last candle has a long wick in its lower part and both the Stochastic and Relative Strength Index are very close to oversold. This makes us anticipate a rejection that will take price higher, possibly aiming towards the 50 period Exponential Moving Average. If this dynamic resistance holds, we will probably see a break of support in the days to come.

Fundamental Outlook

The Bank of England will announce the interest rate today at 11:00 am GMT and although no change is expected (currently 0.25%), volatility is likely to increase. At the same time we will get insights into the reasons that determined the rate decision, with the release of the Monetary Policy Summary, as well as a breakdown of the members’ votes.

[GDMFX]

FOREX NEWS: U.S. INFLATION DATA AND CONSUMER SENTIMENT – FINISHING THE WEEK ON A HIGH NOTE

EUR/USD

Forex News: The U.S. Retail Sales numbers released yesterday disappointed and the same was true for the Producer Price Index but despite all this, the US Dollar managed to erase all the losses incurred when the indicators came out.

Technical Outlook

Yesterday’s price action confirmed 1.1285 as minor resistance and now the pair has returned in the zone around 1.1240 so the indecision period still continues. This type of behaviour, with price confined in a small range for extended periods of time usually warns that a strong move is about to happen but the direction is difficult to predict. It is also worth noting that despite poor economic data, the US Dollar is still holding its ground against the Euro and this suggests underlying strength. For the time being our bias is neutral, in anticipation of today’s important releases.

Fundamental Outlook

At 12:30 pm GMT we take a look at U.S. inflation with the release of the Consumer Price Index; the forecast is a change of 0.1% (previous 0.0%) and under normal circumstances, higher numbers strengthen the greenback. Keep an eye on the CORE version of the indicator (excludes food and energy) released at the same time and expected to show a 0.2% change from the previous 0.1%.

The last notable release of the week is the University of Michigan Consumer Sentiment survey that comes out at 2:00 pm GMT. This is often a leading indicator of consumer spending and that’s the reason why numbers above the forecast 91.0 are beneficial for the US Dollar.

GBP/USD

As expected the Bank of England kept the rate unchanged and the release did not have a huge market impact. The Pound strengthened earlier yesterday but most of the gains were erased.

Technical Outlook

Price moved above the 50 period Exponential Moving Average but encountered the strong resistance at 1.3280 and bounced lower immediately after touching it. Now the pair has reached once again the support at 1.3175 and is already showing signs of rejection so we may see another push towards the moving average. However, if support is broken with a full candle, we expect the move to continue lower. Keep in mind that U.S. inflation data will play an important role in today’s price direction.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases so the pair’s movement will be mostly influenced by the U.S. indicators and by the technical aspect.

We hope you had a profitable trading week and we wish you a relaxing weekend.