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652

FOREX NEWS: RESISTANCE LEVELS SHATTERED AHEAD OF CLUSTER OF U.S. ECONOMIC RELEASES

EUR/USD

Forex News: The US Dollar reacted negatively to President-Elect Trump’s speech delivered yesterday and this allowed the Euro to take the pair through several resistance levels, making the bias bullish again.


Technical Outlook

The level at 1.0460 offered great support yesterday and reversed an earlier drop; after the bounce, the pair is trading above 1.0650 resistance and way above the 50 period Exponential Moving Average. This makes our bias bullish for the day, anticipating a touch and possibly a break of 1.0710; however, a retracement lower may be in order before price can move higher. Today is the busiest day of the week in terms of economic releases and this will play a major part in the pair’s behaviour.

Fundamental Outlook

At 1:30 pm GMT the U.S. Retail Sales numbers come out, showing the change in the total value of sales made through retail outlets. This type of sales represents a major part of the entire consumer spending which in turn accounts for about two thirds of the entire economic activity, so today’s release has the potential to strongly affect the US Dollar. Numbers above the forecast 0.5% (previous 0.1%) usually strengthen the currency.

At the same time the U.S. Producer Price Index is released, showing changes in the price that producers charge for their goods; the indicator has inflationary implications because any change in the price charged by the producer will be eventually reflected in the price paid by the consumer. Values above the forecast 0.1% are usually beneficial to the greenback.

The final release of the day is the University of Michigan Consumer Sentiment survey, scheduled at 3:00 pm GMT. It acts as a leading indicator of consumer spending and usually strengthens the US Dollar if it posts numbers above the forecast, which for today is 98.6.

GBP/USD

The bearish momentum was reversed yesterday by a strong bullish candle and the pair continued to move to the upside for almost 300 pips. Most of this US Dollar weakness was generated by Trump’s speech.


Technical Outlook

The pair printed a new low at 1.2037 but now it has moved above the 50 period Exponential Moving Average and broke through several resistance levels. The bullish bias is likely to continue but before that, we expect a retracement that will possibly test the 50 period EMA and the level at 1.2250 that may turn into support. To the upside the first target is 1.2325 and we expect it to be reached today if the pair remains above the Moving Average.

Fundamental Outlook

The United Kingdom didn’t schedule major economic news announcements for today, thus the technical aspect will prevail and the pair will be also influenced by the U.S. releases mentioned above.

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

653

FOREX NEWS: PRICE STRUGGLES FOR DIRECTION. MORE CHOPPINESS TO FOLLOW?

EUR/USD

Forex News: Friday the US Dollar was boosted by better than expected numbers for the U.S. Producer Price Index and Retail Sales, so the pair briefly dipped below 1.0610 but it wasn’t enough for a break and the bulls took price it back up into resistance by the end of the day.


Technical Outlook

Friday’s price action shows that the pair is confined between 1.0610 support and 1.0650 resistance, without a clear bias and we don’t expect today to be much different. However, a break of 1.0650 will open the door for 1.0700 zone, while a break of 1.0610 will probably generate a touch of the 50 period Exponential Moving Average. The Relative Strength Index is almost flat and the Stochastic is slightly turned to the downside but these are not clear indications of future direction and our view is neutral until a clear breakout is seen.

Fundamental Outlook

Today U.S. banks will be closed due to Martin Luther King Day and no economic data will be released. The European Union didn’t schedule important economic news announcements either, thus price action will be mainly driven by the technical aspect.

GBP/USD

Friday’s trading session was very choppy and price bounced all over, without a clear direction. The US Dollar benefited from positive economic data but the gains were quickly erased and choppiness continued.


Technical Outlook

Price tried twice to move above the 50 period Exponential Moving Average and both times it was rejected lower immediately; the same happened when the pair touched 1.2125 support, so now neither side is in control. Our view remains neutral until a clear break occurs but it is likely to get another ranging session due to the lack of economic announcements and the fact that U.S. banks are closed today.

Fundamental Outlook

Similar to the US Dollar and the Euro, the Pound has a lacklustre day, without major economic data on the economic calendar; price action and volatility may be affected by this and we may see a choppy session.

654

FOREX NEWS: BREXIT FEARS TAKE CENTRE STAGE AGAIN AS U.K. PRIME MINISTER MAY SPEAKS IN LONDON

EUR/USD

Forex News: U.S. banks were closed yesterday and the European Union didn’t release any important economic data and this resulted in a rather slow session, without major developments. The pair is now trading in close vicinity to the 50 period EMA.



Technical Outlook

The pair has approached the 50 period Exponential Moving Average and is now showing small signs of rejection higher. The picture remains still mixed and control doesn’t clearly belong to either side, so we are likely dealing with a ‘bounce or break’ scenario: a bounce will put the bulls in short term control and will open the door for a break of 1.0650, while a move below the 50 EMA will make 1.0525 the first destination.

Fundamental Outlook

Today the World Economic (WEF) Annual Meetings start in Davos and will be attended by political and financial personalities from more than 90 countries. The Meetings will continue throughout the week and are likely to generate increased volatility.

The Euro will be directly affected at 10:00 am GMT by the release of the German ZEW Economic Sentiment, a survey of about 275 German professional analysts and investors that tries to gauge their opinion about a 6 month economic outlook for the German economy. The expected number is 18.9 and usually higher values show optimism and strengthen the Euro.

GBP/USD

The week opened with a gap lower, mostly due to increased fears regarding a “hard” Brexit. We now have a new important low, at 1.0986.


Technical Outlook

More often than not, weekly gaps are closed, meaning that price will retrace to where the gap originated. If that will be the case this time, we will see a climb back into 1.2200 area, but on the other hand, if 1.2090 turns into resistance, then the pair will probably test 1.2000 zone again. Keep in mind that even if the gap is closed, the time span of the move cannot be anticipated, meaning that several days (or even weeks) may pass until the target is reached.

Fundamental Outlook

United Kingdom Prime Minister Theresa May will speak today about her Brexit approach but at the time of writing the exact time of the event is not known. However, be extra careful throughout the day because this speech is likely to trigger very strong movement for the Pound. Also, the WEF Meetings will increase the chances of high volatility.

655

FOREX NEWS: BRITISH PRIME MINISTER MAY ADOPTS A HAWKISH STANCE. THE POUND DOWNTREND MAY COME TO AN END

EUR/USD

Forex News: The German ZEW survey posted a lower figure than anticipated but still higher than the previous and this, combined with a hawkish speech delivered by British Prime Minister May, generated a climb into 1.0700 zone.


Technical Outlook

The 50 period Exponential Moving Average offered good support and pushed price through 1.0650 and into 1.0710, which the pair is now struggling to break. If this resistance is surpassed, price will be heading towards the more important 1.0800 but the Relative Strength Index is rapidly approaching overbought, so a bearish pullback may be next. For the time being the pair is in an uptrend and should be treated as such until a significant low is created.

Fundamental Outlook

Today’s highlight is the release of the U.S. Consumer Price Index, scheduled at 1:30 pm GMT and expected to show a 0.3% change. This is the main gauge of inflation in the United States and usually has a hefty impact on the currency, with higher values strengthening it. Keep in mind that the WEF Meetings continue in Davos and this may be another reason for increased volatility.

GBP/USD

Yesterday the Pound got a tremendous boost from Prime Minister May’s hawkish speech regarding the Brexit and the pair shot through several resistance levels, traveling more than 350 pips to the upside.


Technical Outlook

Price started to move to the upside and closed the weekly gap even before Prime Minister’s speech but the biggest part of the move was completed during her speech. It is clear that the pair travelled a long distance in a very short amount of time and this usually calls for a pullback to the opposite side. We expect a retrace, possibly back into 1.2325 but overall our bias is bullish considering the latest developments.

Fundamental Outlook

The main release of the day for the Pound will be the British Claimant Count Change, an indicator that tracks changes in the total number of people who asked for benefits due to their unemployed condition. The time of the release is 9:30 am GMT, with a forecast of 4.6K (previous 2.4K); a larger number of unemployed people suggests that consumer spending may decrease in the near future and this usually weakens the currency.

656

FOREX NEWS: EURO STEALS THE SPOTLIGHT, PREPARING FOR ECB PRESS CONFERENCE. POUND STILL VOLATILE

EUR/USD

Forex News: The U.S. Consumer Price Index released yesterday matched analysts’ expectations and the event did not generate a strong impact; however, the pair retraced lower but speed of movement slowed down considerably.


Technical Outlook

The resistance at 1.0710 rejected price lower but the bearish move failed before 1.0650 could be broken. This level can be considered support now, because price was rejected from its close vicinity and overall the picture remains bullish, so if support holds, we expect a break of 1.0710 but a lot will depend today on the ECB decision regarding interest rates and on ECB President’s press conference. The technical aspect will be overshadowed by the fundamental and caution is recommended.

Fundamental Outlook

As mentioned above, today the ECB will release their interest rate decision; the event is scheduled at 12:45 pm GMT and although no change is expected (currently 0.00%), volatility is likely to increase. Forty-five minutes later, at 1:30 pm GMT, ECB President Mario Draghi will hold his usual press conference, discussing the reasons behind the rate decision and answering journalists’ questions. This second part is known to generate strong and possibly erratic movement, depending on his answers and attitude, but a prediction cannot be made so, as always, use caution or wait until the conference is over.

GBP/USD

The Pound retraced lower yesterday, as it was anticipated after the strong climb seen a day before, but it’s still trading above the 50 period Exponential Moving Average and the bias is still bullish.



Technical Outlook

On an Hourly chart the pair is approaching the 50 period EMA and this, combined with the vicinity of the potential support at 1.2250, will probably generate another push higher. The first upper barrier is 1.2325, followed by 1.2385; the latter was breached twice but price soon returned below it, so we still consider this zone resistance. As an alternate scenario, we may see an extended move lower, into the four-hour 50 EMA but as long as price is trading above it, our bias remains bullish.

Fundamental Outlook

There are no major releases scheduled for the Pound but any Brexit-related talks or new developments may generate strong movement, so at the moment the pair is considered high-risk.

657

FOREX NEWS: BUCKLE UP FOR A US DOLLAR STORM: PRESIDENT-ELECT TRUMP DELIVERS INAUGURATION SPEECH

EUR/USD

Forex News: Yesterday the Euro weakened during Mario Draghi’s Q&A section of the press conference and the pair has now dropped below the 50 period Exponential Moving Average and below horizontal support.


Technical Outlook

If the bears can keep the pair below the Moving Average and below 1.0610 support, the uptrend may be coming to an end and the first target will become the support at 1.0525. For the time being the current support zone is not clearly broken because price did not re-test it from below; such a possible re-test may happen on the lower time frames and it would still be valid but until that happens, we do not consider the break a true one. The oscillators are moving to the downside, with good momentum and this increases the chances of an extended move south.

Fundamental Outlook

Today U.S. President-Elect Trump will deliver his Presidential Inauguration speech in Washington DC. Some sources have 2:00 pm GMT as the scheduled time, while others have not yet posted the exact time but what is almost certain is that his speech will generate a lot of volatility for the US Dollar. Use extra caution during the event.

GBP/USD

The pair showed bullish price action yesterday, bouncing at support but failing to break resistance. Overall we had a normal trading session, without major developments.



Technical Outlook

The perfect bounce at 1.2250 shows that the bulls still have what it takes to continue the strong impulse started earlier this week but 1.2325 resistance is still holding for now. Once this level is broken, we expect another test of 1.2385 zone, otherwise the pair will probably move back down into 1.2250 and into the 50 period Exponential Moving Average. The fundamental aspect will play a major role for today’s direction.

Fundamental Outlook

At 9:30 am GMT the British Retail Sales numbers are released, showing changes in the total value of sales made through retail outlets. The indicator is considered a high-impact one and usually a higher number than the anticipated -0.1%, generates Pound strength. Later in the day, the pair will be directly affected by President-Elect Trump’s inauguration speech.

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

658

FOREX NEWS: US DOLLAR WEAKENS, PAIRS TEST RESISTANCE LEVELS

EUR/USD

Forex News: Surprisingly, President Trump’s inauguration speech delivered Friday did not create the strong volatility we anticipated but it weakened the US Dollar nonetheless and allowed the pair to reach resistance.


Technical Outlook

Price bounced at the 50 period Exponential Moving Average and is now facing a strong barrier to the upside, represented by the level at 1.0710. If this barrier can be surpassed today, the next target will become 1.0800 but we don’t expect it to be reached during the course of one day. On the other hand, if the bulls cannot break resistance, the pair will probably drop back into the 50 period EMA or it will start to move sideways, in a tight range.

Fundamental Outlook

The economic calendar doesn’t hold any important releases and this may generate slow, ranging price action, with the technical aspect being the most important.

GBP/USD

Friday’s movement was controlled by the bulls and the main market mover was President Trump’s speech but the Pound was already strong as seen earlier in the week.


Technical Outlook

The level at 1.2250 acted as strong support and rejected price higher twice during last week but also a strong level is 1.2385. The latest impulse is bullish so we expect a break of the mentioned resistance; if this happens, the next move will probably reach the resistance at 1.2480 but this will probably take more than a day and price will also retrace before reaching that target. A bounce lower from the current price will take the pair into 1.2325 and possibly into the 50 EMA.

Fundamental Outlook

The United Kingdom also has a lacklustre economic calendar for today so we don’t expect major developments or substantial moves.

659

FOREX NEWS: UK’S HIGH COURT DUE TO ANNOUNCE BREXIT-RELATED RULING


EUR/USD

Forex News: The pair continued the bullish impulse started Friday and moved above the resistance at 1.0710. The fundamental environment was lacklustre and didn’t have a major role to play in yesterday’s price action.


Technical Outlook

After moving above 1.0710 resistance, the pair returned lower to re-test the level; if this previous resistance can turn into support, we will probably see a move higher, possibly into 1.0800 in the short to medium term (today or tomorrow). On the other hand, a quick drop below 1.0710 would show that the break was false and that the uptrend may be coming to an end soon. This would also make 1.0650 the first bearish target and would take price in close vicinity to the 50 period Exponential Moving Average.

Fundamental Outlook

At 8:30 am GMT we take a look at the health of the German Manufacturing and Services sectors with the release of the respective Purchasing Managers’ Indexes. Usually the indicators don’t have a huge impact but higher values show optimism among purchasing managers and strengthen the Euro; the Manufacturing PMI is expected to show 55.5 and the Services PMI, 54.6.

GBP/USD

The Pound strengthened for the most part of yesterday’s trading session and the pair climbed to touch resistance. Overall price action was bullish but price stalled at resistance.


Technical Outlook

The pair is now facing an important resistance at 1.2480, with the Stochastic and Relative Strength Index approaching overbought levels. This increases the chance of a retracement lower but the bulls have been strong lately, so a move past the mentioned resistance will take the pair into 1.2550. To the downside the first support and target is represented by 1.2385; if the pair reaches that level, we expect it to bounce higher.

Fundamental Outlook

At 9:30 am GMT the United Kingdom High Court will decide if the Government can trigger Article 50 of the Lisbon Treaty without the approval of the Parliament. The article would initiate the Brexit and this would probably have a very high impact on the Pound. Whatever the High Court decides, the Pound will probably move erratically at the time so we recommend caution.

660

FOREX NEWS: UPTREND CONTINUES, US DOLLAR STILL SHAKY AGAINST COUNTERPARTS

EUR/USD

Forex News: The pair had a choppy session yesterday but the bias remained bullish although the economic data was mixed, showing a higher value for the German Manufacturing PMI and a lower value for the Services sector.


Technical Outlook

Price remained above the resistance turned support at 1.0710 and seems headed towards the next resistance at 1.0800. However, some bearish signs have already appeared: the candles show long wicks and the Stochastic is trading above its 80 level, showing an overbought condition. As long as the pair is trading above the 50 period Exponential Moving Average, our bias remains bullish but a retracement is needed and it’s very possible to happen today.

Fundamental Outlook

Today’s highlight is the release of the German IFO Business Climate, a survey of about 7,000 businesses, which tries to gauge the respondents’ opinions regarding economic conditions and expectations for the next 6 months. A higher number than the forecast suggests optimism and usually strengthens the Euro. The time of release is 9:00 am GMT and the anticipated value is 111.3.

GBP/USD

United Kingdom’s High Court ruled yesterday that the Government must seek the Parliament’s approval before triggering Article 50. This initially created Pound strength, followed by weakness but overall movement was irregular and without a clear bias.


Technical Outlook

After a very close encounter with 1.2550 resistance the pair dropped below 1.2480 and now the candles show long wicks, which is a sign of indecision. If the bears can keep price below 1.2480, we are likely to see a touch of the potential support at 1.2385 and possibly of the 50 period EMA; otherwise, if price moves quickly above 1.2480, the bulls will remain in control and we will see another test of 1.2550.

Fundamental Outlook

The Pound’s economic calendar is light today, without any major releases, thus price direction will be mainly affected by the technical aspect.

661

FOREX NEWS: TODAY’S MARKET MOVERS: U.S NEW HOME SALES, BRITISH GDP


EUR/USD

Forex News: The pair had a mixed trading session yesterday and no significant advances were made by either side. The support at 1.0710 was tested again and once more it rejected price higher.



Technical Outlook

After the re-test of 1.0710 support, the pair moved up into the short term resistance created around 1.0770 but there the bullish impulse faded and some of the earlier gains were erased. This is very likely to be the start of a ranging period, with price confined between 1.0800 and 1.0710 because the uptrend seems to slow down but on the other hand, the bears cannot break immediate support. However, as long as price is trading above the 50 EMA, the bias is bullish.

Fundamental Outlook

The U.S. New Home Sales will be released today at 3:00 pm GMT and expected to show an annualized number of 585K. The indicator acts as a gauge of health for the U.S. house market but the impact is usually medium-to-low; however, under normal circumstances, numbers above expectations strengthen the US Dollar and take the pair lower.

GBP/USD

The Pound continued to strengthen yesterday and now the pair is trading above 1.2250 but the oscillators are starting to show overbought so a retracement might follow.


Technical Outlook

The resistance at 1.2550 was the last barrier before the key level at 1.2725 and now the US Dollar lacks the strength to regain control. The next medium term target is the resistance level we just mentioned but until price gets there, it will probably retrace lower; in the short term we expect a pullback to 1.2550, followed by another rally. The Relative Strength Index is approaching its overbought level, increasing the chance of a pullback.

Fundamental Outlook

The British Preliminary Gross Domestic Product is today’s highlight for the Pound. The GDP is considered the main gauge of economic performance and this version is the most important out of the three (Preliminary, Second Estimate and Final); the time of the release is 9:30 am GMT and the anticipated change is 0.5% compared to the previous 0.6%. A higher value shows increased economic activity and usually strengthens the currency.

662

FOREX NEWS: PULLBACKS IN AN UPTREND. A GOOD OPPORTUNITY TO BUY?

EUR/USD

Forex News: Yesterday’s trading session belonged to the bears and the uptrend is now going through a retracement that brought the pair below the 50 period Exponential Moving Average.


Technical Outlook

After several failed attempts to move above 1.0770, the pair dropped through 1.0710 support and through the 50 period EMA, putting the short term control in favour of the bears. The next target is the support at 1.0650 but it must be noted that a significant low was not yet formed so the pair is still in an uptrend. If today price will return above the 50 EMA, we will probably see uptrend resumption with 1.0770 as first destination.

Fundamental Outlook

The US Dollar will be affected today by two important indicators: the first is the Advance Gross Domestic Product, which is considered the economy’s main performance gauge and the second is the Durable Goods Orders, an indicator that shows changes in the value of purchase orders for goods with a life expectancy of at least 3 years. Both indicators are released at 1:30 pm GMT and values above forecast usually strengthen the currency. The GDP is expected to show a 2.1% change while the Durable Goods Orders have a forecast of 2.7% change.

GBP/USD

Although the pair is in a clear uptrend, yesterday it showed a bearish day, retracing lower to the last level of importance. This was a much needed “breather” and overall the bulls remain in control.


Technical Outlook

The current move down should be considered a retracement in an uptrend and not a reversal, meaning that probably the bulls will step back in and take price higher again. The level at 1.2550 acts as support and is already showing signs of rejecting price higher; the first bullish target is the resistance located at 1.2675, created yesterday. If the current move south continues, we don’t expect it to extend below 1.2480 and the 50 period EMA.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for today, so the pair will be affected by the U.S. events mentioned earlier and by the technical aspect.

663

FOREX NEWS: KICKING OFF THE WEEK WITH GERMAN INFLATION DATA

EUR/USD

Forex News: After a close encounter with support, the pair started to move higher Friday; part of the US Dollar weakness was generated by a disappointing GDP figure: actual 1.9%, anticipated 2.1%.



Technical Outlook

The uptrend is slowing down as shown by the failed attempts to move past 1.0770 but the sellers seem to lack the strength to break 1.0650. Also, the 50 period Exponential Moving Average is flat, indicating that the pair might be entering a ranging period. The levels to watch today are 1.0710 as resistance and 1.0650 as support but if neither is broken early, we may get a choppy session.

Fundamental Outlook

At 1:00 pm GMT the German Preliminary Consumer Price Index is released; this is the main gauge of inflation and can strengthen the Euro if it posts a higher change than the forecast -0.5% (previous 0.7%). German economy is an important pillar of the entire Eurozone and this is the main reason why the indicator usually has a strong impact on the single currency.

GBP/USD

Friday the bears took control of price movement and the pair dropped below support but no major advances were made after that; from a short-to-medium term the pair is still in an uptrend.


Technical Outlook

After breaching 1.2550 to the downside the bears lost steam and price started ranging in close vicinity of the mentioned level. Neither side is in clear control of short term price movement but the bearish retracement might extend into the 50 period Exponential Moving Average, where we expect the buyers to step back in and take the pair higher; 1.2480 is also close to the 50 EMA and together will form a confluence zone which will be tough to break.

Fundamental Outlook

The British economic calendar is light today, without any notable economic releases, thus the pair’s direction will be mostly influenced by the technical side.

664

FOREX NEWS: US DOLLAR STRIKES BACK. THE END OF THE UPTREND?

EUR/USD

Forex News: Yesterday’s German inflation data disappointed by showing a -0.6% change and this contributed to a session dominated by the bears. Support was breached but most of the Euro losses were erased later in the day.


Technical Outlook

The pair has now descended below the 50 period Exponential Moving Average and the medium term uptrend seems to come to an end. However, the last four hour candle is showing a long tail, which is a clear sign of rejection so the support at 1.0650 is not decisively broken yet. This means that we could see a resurgence of the uptrend and if the bulls can keep price above 1.0650, we will probably see an encounter with the 50 period EMA. If the pair doesn’t move above this dynamic resistance, we will probably see more downside movement.

Fundamental Outlook

At 8:00 am GMT, ECB President Mario Draghi will deliver a speech at a conference in Frankfurt, organized by the European Central Bank and the European Commission. His speeches are always a potential reason for increased volatility, thus caution is recommended.

Later in the day, at 3:00 pm GMT the U.S. Consumer Confidence survey is released, showing the opinions of about 5,000 households regarding economic and business conditions and job availability. A number higher than the forecast 112.6 shows optimism and usually strengthens the greenback.

GBP/USD

Yesterday’s session belonged to the bears who managed to take the pair almost 100 pips lower, below immediate support and into the 50 period Exponential Moving Average.


Technical Outlook

The pair is facing a strong support zone created by the confluence between 1.2480 and the 50 period Exponential Moving Average. If the bears manage to break this zone, it will be a testament of their strength, so we expect to see further downside action if that happens (possibly into 1.2420); on the other hand, a bounce higher from here would show that the bearish move was just a retracement in an uptrend and will likely mean that 1.2550 will be tested again.

Fundamental Outlook

The Pound has a light day ahead in terms of economic releases, thus the main focus will be on the technical aspect and on the U.S. consumer survey.

665

FOREX NEWS: ALL EYES ON A WEAK US DOLLAR: FED RATE DECISION AND FIRST LOOK AT U.S. JOBS DATA

EUR/USD

Forex News: Early during yesterday’s session the pair moved above the 50 period Exponential Moving Average and the rest of the day belonged to the bulls on the back of a weak US Dollar. Part of the weakness was due to a worse than expected U.S. Consumer Confidence survey (actual 111.8, forecast 112.6) but also comments made by U.S. President Trump.


Technical Outlook

Price surpassed 1.0770 resistance and is now testing 1.0800, which is an important technical resistance but also an important psychological level (round number). We expect to see a bearish retracement soon but now the uptrend is renewed and the US Dollar doesn’t show any signs of recovering soon, so after the said retracement, we expect the pair to move above 1.0800, into 1.0850.

Fundamental Outlook

Today is a very important day for the US Dollar as we take a first look at U.S. jobs situation with the release of the ADP Non-Farm Employment Change, scheduled at 1:15 pm GMT and expected to show a number of 165K compared to the previous 153K. The indicator tracks changes in the number of employed people, excluding Government and the farming industry. A higher number is beneficial to the US Dollar but the impact is not as big as the Non-Farm Payrolls released later this week.

At 7:00 pm GMT the FOMC will release their Statement containing the rate decision and the reasons that determined the decision; more importantly, the document may contain hints about the next rate hike and if this is the case, we will likely see increased activity on all USD pairs. The rate is currently set at <0.75% and is not expected to change today.

GBP/USD

After an almost perfect bounce at 1.2420 the Pound strengthened and the pair begun to move to the upside, generating a trading session controlled almost totally by the bulls.


Technical Outlook

The pair is approaching the minor resistance at 1.2600 and once it gets there, we expect to see some sort of retracement lower considering that yesterday price travelled a long distance straight up, without any pullbacks. Overall the bias is bullish, with a weak Dollar, a strong Pound and price trading above the 50 period Exponential Moving Average after a strong bounce at support. The levels to watch today are 1.2550 as potential support and 1.2600 as immediate resistance.

Fundamental Outlook

The British Manufacturing PMI is released today at 9:30 am GMT, with an anticipated value of 55.9; this is a survey of purchasing managers from the Manufacturing sector, which acts as a leading indicator of economic health. Usually numbers that surpass expectations strengthen the Pound but the impact is not always huge.

666

FOREX NEWS: US DOLLAR CONTINUES ITS LOSING STREAK, FOCUS SHIFTS ON POUND FOR INFLATION REPORT AND BOE RATE DECISION

EUR/USD

Forex News: Yesterday the US Dollar got a boost from a much better than anticipated ADP Non-Farm Employment Change (actual: 246K, forecast: 165K) but the Fed kept the rate unchanged and the FOMC Statement didn’t offer any hints about a March hike so the greenback weakened and the pair climbed.


Technical Outlook

After attempting to break 1.0800 resistance the pair took a dive and came close to the 50 period Exponential Moving Average but the FOMC Statement weakened the US Dollar and now rejection is present. The pair is in an uptrend, trading above the 50 EMA and the greenback is surrounded by a negative sentiment so we expect to see another attempt to break 1.0800 resistance; if the barrier is surpassed, the pair will likely touch 1.0850.

Fundamental Outlook

Today at 12:15 pm GMT, ECB President Mario Draghi will speak in Slovenia at a conference organized by the European Central Bank and Bank of Slovenia. The main topic is Slovenia’s 10th anniversary of the adoption of the single currency but we cannot anticipate the impact on the market; however, as always when he speaks, caution is recommended because volatility may surge.

GBP/USD

The pair pushed above immediate resistance yesterday before the Fed event, which brought more weakness for the US Dollar, thus making the entire session bullish and testing the high at 1.2675.


Technical Outlook

Yesterday’s price action confirmed that 1.2550 has now turned into support (price touched it from above and immediately bounced higher) so we can expect this level to reject falling price in the future. Currently the pair is testing the high at 1.2675 and once it’s broken, we expect to see a climb into 1.2725, where a retracement is likely to happen because price traveled a relatively long distance and the Relative Strength Index is approaching overbought. If 1.2675 is not broken, the first target will become 1.2600.

Fundamental Outlook

At 12:00 pm GMT the Bank of England will release their Inflation Report, containing economic and inflation projections for the next 2 years and at the same time the interest rate is announced. No change is expected but the event usually creates volatility on Pound pairs; also, half an hour later, at 12:30 pm GMT, BoE Governor Mark Carney will hold a press conference discussing the Inflation Report and this is another reason for increased volatility.

667

FOREX NEWS: ENDING THE WEEK ON A HIGH NOTE WITH U.S. NON-FARM PAYROLLS

EUR/USD

Forex News: The pair had another bullish day yesterday and broke through resistance but action clearly slowed down and now signs of rejection are present. Draghi’s speech went mostly unnoticed and did not generate substantial movement.


Technical Outlook

The resistance at 1.0800 was breached yesterday but the pair slowed down soon after moving past the level. However, we maintain our bullish bias and still anticipate a touch of 1.0850, where a deeper retracement will occur but the overbought condition of the Stochastic must be noted; although this is a lagging indicator, it warns of a potential pullback so we don’t exclude a drop into 1.0770. Today’s price direction will be mostly influenced by the fundamentals, which will overshadow the technical side.

Fundamental Outlook

The most important U.S jobs data of the month is released today at 1:30 pm GMT: the Non-Farm Payrolls (also known as the Non-Farm Employment Change). The report tracks changes in the number of employed people and acts as a leading indicator of consumer spending (people with jobs tend to spend more). The forecast is a change of 170K and higher numbers usually generate US Dollar strength; volatility is almost always high at release and price action may be irregular.

GBP/USD

The Pound weakened substantially yesterday, after the release of the Inflation Report and Carney’s press conference. Support was broken and now the pair is testing the 50 period Exponential Moving Average.


Technical Outlook

After the failed attempt to break 1.2675 the pair dropped to touch the 50 period Exponential Moving Average but it must be noted that an uptrend is still present so at the moment this is considered just a retracement. If the 50 period EMA is broken and then a lower high is formed, the uptrend will be in serious jeopardy and we may see a full scale reversal; the current level at 1.2550 is support and in confluence with the moving average it will create a strong barrier.

Fundamental Outlook

At 9:30 am GMT the Services Purchasing Managers’ Index is released, showing opinions about business conditions and the overall health of the sector; the anticipated number is 55.8 and higher values strengthen the Pound but the highlight of the day will be the NFP release, which will directly affect the pair.

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

668

FOREX NEWS: US DOLLAR WEAKENS DESPITE ENCOURAGING NFP REPORT. MORE EFFECTS STILL TO COME?

EUR/USD

Forex News: The U.S. Non-Farm Payrolls posted a figure of 227K, while the forecast was 170K; however, another report showed that hourly earnings have decreased compared to the previous month and this triggered a mixed reaction, weakening the US Dollar overall.


Technical Outlook

Friday the pair bounced perfectly between 1.0710 support and 1.0800 resistance and now it has printed a lower low as well as a lower high, a pattern that may indicate a reversal to the downside. However, the bias remains mostly neutral as long as price is trading between 1.0800 and 1.0710. We expect a choppy session, with the pair ranging between the two mentioned zones.

Fundamental Outlook

The German Factory Orders are released today at 7:00 am GMT and although this is not a high impact indicator, it is today’s only notable one. It measures changes in purchase orders and acts as a leading indicator of production, with higher values strengthening the Euro; today’s forecast is a change of 0.6% while the previous was -2.5%.

GBP/USD

The pair slowed down Friday and remained in a relatively tight range, capped to the downside by 1.2480 and to the upside by the 50 period Exponential Moving Average. Most of this indecision was created by the mixed U.S. employment data.


Technical Outlook

Price is clearly trading below the 50 period EMA after a drop from 1.2675 resistance zone, but the support at 1.2480 is doing a good job at hindering downside movement. Once and if this barrier is broken, we expect to see a touch of 1.2420 but the oversold condition of the Stochastic mustn’t be overlooked (although this is a lagging indicator), so we expect a bounce up if the mentioned support is reached. To the upside, 1.2550 is the first target and place where price is likely to bounce lower.

Fundamental Outlook

The Pound will not be affected today by any important economic indicators, so the technical side will prevail.

669

FOREX NEWS: US DOLLAR ‘BACK WITH A VENGEANCE’. KEY SUPPORT AHEAD

EUR/USD

Forex News: Yesterday the US Dollar erased all the losses incurred Friday and the pair slipped below the 50 period Exponential Moving Average, reaching support. Most of the session was controlled by the bears and the uptrend seems to have hit a dead end.


Technical Outlook

The pair is showing rejection at 1.0710 support and is currently trading below the 50 period EMA after a failed attempt to renew the uptrend. Signs point towards a break of 1.0710 and a consequent move into the zone near 1.0650, however, a bounce higher here is not out of the question and would open the door for another shot at 1.0800 zone. As long as price remains below the 50 EMA, our bias is slightly bearish.

Fundamental Outlook

At 1:30 pm GMT the U.S. Trade Balance is released, showing the difference in value between imported and exported goods. The indicator has a medium impact usually, but higher numbers would strengthen the US Dollar because exports and currency are directly linked (the buyer must purchase the domestic currency). Today’s forecast is -45.0B, while the previous value was -45.2B.

GBP/USD

Yesterday’s session belonged to the bears who scored a major victory by breaking 1.2480, a level that had stopped last week’s downside movement.


Technical Outlook

Short term price action is controlled by the bears and we will probably see an encounter with 1.2420 support, which is a key level for medium term movement. It must be noted that last time when the pair reached the level, it jumped higher immediately and also the Stochastic and Relative Strength Index are approaching oversold territory, thus increasing the chance of a bullish pullback. If the pair breaks 1.2420, the extent of the move should be limited and followed by a retracement.

Fundamental Outlook

The economic calendar for the Pound is light, without any major releases so price direction will be mainly determined by the technical aspect.

670

FOREX NEWS: POUND NULLIFIES LOSSES. IS THE EURO NEXT?

EUR/USD

Forex News: The US Dollar continued its assault on the Euro yesterday and the pair dropped in close vicinity of support. Overall the session was bearish, with very little buyer presence.


Technical Outlook

The US Dollar has regained short term control and is dragging the pair lower, aiming for 1.0650 support. Once it gets there, we expect to see a climb closer to the 50 period Exponential Moving Average but not above 1.0700 zone of resistance; the oscillators are approaching oversold, thus increasing the chances of a bullish pullback. Although lately the pair is controlled by the bears, we must acknowledge the uptrend that is still present, so we cannot exclude a sudden jump above 1.0700.

Fundamental Outlook

The European Commission will release today the forecasts for the next 2 years regarding economic expectations but the exact time is not yet known. This is not a high impact event but usually a hawkish stance generates Euro strengths and takes the pair higher.

GBP/USD

The pair dropped for the main part of the session but all the move was erased in the afternoon and now price is trading back above support after a strong rejection.


Technical Outlook

The break of 1.2420 support proved short lived and price reversed sharply before reaching 1.2325 support. The Stochastic was already oversold and moving up, while the Relative Strength Index just reached oversold before the bounce and these were early signs of a potential move north. The current situation is fuzzy but we expect the climb to extend into 1.2480 and the 50 period Exponential Moving Average where the next direction will be decided.

Fundamental Outlook

There are no major events scheduled for the Pound or the US Dollar today so the technical aspect will prevail.

671

FOREX NEWS: THE BALANCE OF POWER SHIFTS AGAIN. INDECISION TAKES OVER

EUR/USD

Forex News: Yesterday was a slow day on the fundamental scene but the pair didn’t lack action and showed a perfect bounce at support, followed by a touch of resistance. It remained capped and a breakout didn’t occur.


Technical Outlook

Price is bouncing between 1.0650 support and 1.0710 resistance and so far we don’t have a clear winner. If the current move extends past 1.0710, it will encounter the 50 period Exponential Moving Average and the way it will behave there, will probably decide the next direction. If the bulls can close a full candle above the 50 EMA, we may expect to see a resurgence of the uptrend but a bounce lower will show that the balance of power is shifting towards the short side, so we will be looking for a break of 1.0650.

Fundamental Outlook

The only notable event of the day is the release of the U.S. Unemployment Claims, an indicator that shows how many people asked for unemployment related benefits during the previous week. Usually the impact is low-to-medium, mostly because the indicator is released every week, but higher numbers than the forecast 249K can weaken the US Dollar. The time of the release is 1:30 pm GMT.

GBP/USD

After a brief stall at the 50 period Exponential Moving Average, the bulls took control again and now resistance is tested, with price confined between support and resistance.


Technical Outlook

The latest impulse is bullish and the pair is now trading above the 50 period EMA, with the oscillators showing a strong momentum. However, upside action is capped by 1.2550 resistance and if this barrier is not breached early into the session, we expect a drop below the Moving Average and possibly below 1.2480 support. Overall the picture is mixed and neither side is in clear control.

Fundamental Outlook

Today at 6:30 pm GMT, Bank of England Governor Mark Carney will deliver a speech at the Bank of England Inclusion Reception, in London. As always, speeches of heads of central banks should be treated with caution because volatility may surge, depending on the speaker’s attitude and matters discussed.