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.