Technical News | Daily

FOREX NEWS: US DOLLAR BOUNCES AT SUPPORT, BEARISH PRESSURE STILL PRESENT

EUR/USD

Forex News: Both the U.S. CPI and Retail Sales posted a better than expected value and this strengthened the greenback yesterday, bringing the pair right into support. Fed Chair Yellen’s dovish testimony erased almost all the gains later in the day.


Technical Outlook

The support at 1.0525 rejected price higher as soon as it was touched and both the Relative Strength Index and Stochastic are very close to their oversold levels so we expect the pair to continue to climb, possibly into 1.0600 zone. If the pair drops below 1.0525, the next destination is 1.0460 but we don’t expect it to be reached before a stronger retracement to the upside is completed.

Fundamental Outlook

The day’s main events are release of the U.S. Building Permits and Philly Fed Manufacturing Index, both scheduled at 1:30 pm GMT. These are leading indicators of economic activity in the construction and manufacturing sectors respectively, and higher values usually strengthen the US Dollar but to a limited extent. The forecast for the Building Permits is 1.23M and for the Manufacturing Index is 18.5.

GBP/USD

Similar to the other pair, the Cable dropped when the U.S. data was released and then erased all losses during Janet Yellen’s testimony. Now the pair is trading above support but below the bullish trend line.


Technical Outlook

As long as the pair is trading below the 50 period Exponential Moving Average and below the recently broken uptrend line, our bias is bearish, anticipating a touch of 1.2350. However, it is important to note that yesterday the US Dollar took a hit during Yellen’s testimony speech and this makes the picture less clear so we cannot exclude a move above 1.2480 and above the 50 period EMA. If this is the case, the bulls will probably continue the momentum until 1.2550 is reached again.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases for today so the pair’s direction will be affected by the U.S. indicators and by the technical aspect.

FOREX NEWS: DOLLAR GIVES UP GAINS, BRITISH RETAIL SALES EYED

EUR/USD

Forex News: Despite better than expected data for the U.S. economy, the greenback had a rough day yesterday and the pair climbed for the entire session, breaking the 50 period Exponential Moving Average.


Technical Outlook

Yesterday’s climb took the pair above the 50 EMA and above 1.0650, making the short term bias bullish. However, if the current impulse will develop into a short term uptrend, we must first see 1.0650 turn into support. If the pair moves up and then returns to retest the mentioned level, it will establish support and it will open the door for a touch of 1.0700 zone. A quick move below 1.0650 will suggest that the bullish move was just a retracement and 1.0610 will be tested again.

Fundamental Outlook

The economic calendar is light today for both the Euro and the US Dollar, thus the pair’s direction will be mainly affected by the technical aspect.

GBP/USD

The Pound showed strength against the US Dollar but later in yesterday’s session, the pair started to show rejection and is now hovering close to the 50 period Exponential Moving Average, without clear direction.


Technical Outlook

The last two candles on a four hour chart show long wicks in their upper part, which is a sign of rejection. However, currently control doesn’t clearly belong to either side and the pair is mostly ranging, with a slight bearish bias. If price remains above the 50 period Exponential Moving Average, the day’s target will become 1.2550, otherwise we expect an encounter with 1.2420.

Fundamental Outlook

The British Retail Sales are today’s only notable release, scheduled at 9:30 am GMT and expected to show a change of 1.0% compared to the previous -1.9%. Sales made at retail levels are an important part of the entire economic activity, thus a higher change than anticipated will probably bring Pound strength.

FOREX NEWS: BEARISH PRESSURE AMPLIFIES, SUPPORT IN THE WAY


EUR/USD

Forex News: Friday’s session belonged almost exclusively to the bears and after finding resistance near 1.0680, the pair dropped to touch the support at 1.0610. The 50 EMA was also broken decisively so we might be looking at a short term downtrend.


Technical Outlook

It looks like the climb above the 50 period Exponential Moving Average seen last week did not generate additional buying pressure and now that the pair has returned below it, the bears might be taking over the pair’s movement. Last week ended right on 1.0610 level but this doesn’t mean that support is holding and today we will get a real sense of direction: if price moves below support, we will probably see another move into 1.0525 in the near future, otherwise we will probably have a ranging day, with price confined between 1.0610 and 1.0650.

Fundamental Outlook

The United States celebrates Presidents’ Day and banks will be closed so we will probably see low volatility during the New York session. Also, no economic indicators will be released on either side of the Atlantic so the entire session may be ranging.


GBP/USD

The British Retail Sales showed a disappointing change of -0.3% (forecast 1.0%) and this was one of the main reasons why the pair had a bearish session Friday, moving below 1.2420.


Technical Outlook

Although the latest impulse is bearish, the pair is ranging from a longer term perspective and 1.2420 support is not decisively broken so a move up cannot be excluded. However, we slightly favour the short side for today, mostly because the effect of the disappointing Retail Sales figure will probably extend to the early stages of this week. The first notable support is located at 1.2350, while resistance sits around 1.2480.

Fundamental Outlook

Similar to the other two currencies, today the Pound will not be affected by economic releases, so the main focus will be on the technical side.

FOREX NEWS: POUND IN THE SPOTLIGHT: BRITISH INFLATION REPORT HEARINGS

EUR/USD

Forex News: As expected, yesterday’s session was slow and price remained confined in a tight range after failing to break the support at 1.0610. Most of the choppiness was due to the United States banks being closed in celebration of Presidents’ Day.


Technical Outlook

It looks like the pair is struggling to find the next direction but both the buyers and sellers are hesitant at the moment. The main levels to watch are 1.0610 as support and 1.0650 as resistance but an important role will be played by the 50 period Exponential Moving Average, which currently is moving downwards and is above price, thus making the bias bearish. Once we will see a strong break of one of the horizontal levels or the EMA, direction will become clearer but as long as price stays between them, our bias is neutral.

Fundamental Outlook

We have another lacklustre day ahead, with the only notable release being the European Manufacturing Purchasing Managers’ Index, scheduled at 9:00 am GMT. This is a measure of economic health, derived from the opinions of purchasing managers, that usually brings Euro strength if it posts values above expectations. The forecast for today is 55.0 but keep in mind this is a medium impact indicator.

GBP/USD

The bears couldn’t keep the pair below 1.2420 support yesterday and the buyers took control of price action, climbing into resistance; however, the pair is not out of the range and control doesn’t clearly belong to wither side.


Technical Outlook

As long as the pair is trading between 1.2420 support and 1.2480 resistance, our bias is neutral. Nevertheless, it must be noted that to the upside we have three important elements that can push price lower: the 50 period Exponential Moving Average, the level at 1.2480 and a bearish trend line. If price will choose the path of least resistance, we will see a bounce from here and a move into 1.2420 but a break of the current resistance zone would show bullish strength and will make 1.2550 the next target.

Fundamental Outlook

Today at 10:00 am GMT, Bank of England Governor Carney and MPC members will testify on inflation and economic outlook before the Treasury Committee of the Parliament. These hearings have the potential to be a strong market mover for the Pound and will be the main event of the day but keep in mind that price action may be irregular during the speeches.

FOREX NEWS: US DOLLAR SHOWS MIXED SIGNALS AGAINST COUNTERPARTS. FOMC MINUTES EYED FOR RATE HIKE CLUES

EUR/USD

Forex News: A much needed breakout took place yesterday on the back of better than forecast European economic data. The pair dropped to touch the important support at 1.0525 where we expect a pause or possible bounce higher.


Technical Outlook

Last time the pair visited 1.0525 area, it bounced strongly and it’s very possible to see the same type of behaviour again. This view is also supported by the oversold condition of the Stochastic and Relative Strength Index, so even if we will see price move below 1.0525, the extent should be limited and a pullback should soon follow. Overall our bias is bearish as long as the pair is trading below the 50 period Exponential Moving Average.

Fundamental Outlook

The German IFO Business Climate comes out at 9:00 am GMT, showing the opinions of about 7,000 businesses regarding current economic conditions as well as a 6-month outlook. The impact is medium-to-high and usually, numbers above the forecast strengthen the Euro; today’s anticipated value is 109.6 vs. 109.8 prior.

Later in the day, at 7:00 pm GMT the Fed will release the FOMC Meeting Minutes, which contain details about the latest rate vote and possibly hints about the next rate hike. Usually the Minutes have a strong impact on the US Dollar only if they offer clues about the next rate hike and if that is the case, we expect strong movement on all USD pairs.

GBP/USD

The Inflation Report Hearings had a surprisingly low impact on the Pound but later in yesterday’s session the pair showed increased volatility and jumped after another failed attempt to break support.


Technical Outlook

Once again the US Dollar showed that it lacks the strength to break support and the pair immediately jumped higher, testing the 50 period Exponential Moving Average and coming very close to horizontal resistance and to the bearish trend line. Once the bearish trend line is broken (by then the other 2 elements will be probably broken as well), we expect price to move into 1.2550. Of course, given the current stalemate, it’s not out of the question to see a move back into support, so our view is currently neutral, expecting a clear breakout.

Fundamental Outlook

The main event for the Pound is the British Second Estimate Gross Domestic Product, scheduled at 9:30 am GMT and expected to show a change of 0.6%, same as previous. The GDP is an economy’s main gauge of performance but the version released today is less important than the Preliminary version released a month ago; nonetheless, values above expectations can strengthen the currency and the opposite is valid for numbers below forecast.

FOREX NEWS: US DOLLAR STILL WITHOUT POWER, DESPITE HINTS OF ‘FAIRLY SOON’ RATE HIKE

EUR/USD

Forex News: After a small pause at 1.0525, the bears managed to break the level yesterday, ahead of the FOMC Minutes release but the pair returned above it although some FOMC members said that a rate hike may come fairly soon.


Technical Outlook

The FOMC Minutes also showed that some members fear downside inflation risks and the pair moved above the recently broken level at 1.0525. The oversold condition of the two oscillators gave an early warning about this potential bounce higher but the overall bias remains bearish. Probably the pair will continue higher, into the 50 period EMA but if it gets there, we expect it to start moving to the downside again.

Fundamental Outlook

Today we have a lackluster session, with the U.S. Unemployment Claims as the main focus. The indicator is released at 1:30 pm GMT and is expected to show a number of 242K unemployed people during the previous week. A higher number suggests that economic activity is slowing down and usually this means the US Dollar will weaken; however, the indicator is released each week and this somewhat limits its impact.

GBP/USD

Despite a better than expected British GDP reading, the pair dropped in the early stages of yesterday’s session but the FOMC Minutes brought mixed movement and the pair did not exit the range.



Technical Outlook

The choppy movement is likely to continue until 1.2480 or 1.2420 will be broken and re-tested from above or below, respectively. Our bias remains neutral until one of these levels is broken; the 50 period Exponential Moving Average is almost flat, confirming the lack of determination showed by both the bulls and bears.

Fundamental Outlook

There are no major releases on the British economic calendar today so the direction will be mostly decided by the technical aspect.

FOREX NEWS: GREENBACK SLIDES LOWER AS COUNTERPARTS GAIN GROUND

EUR/USD

Forex News: The US Dollar continued to show weakness throughout yesterday’s trading session and the pair remained well above support, coming close to the 50 period Exponential Moving Average.


Technical Outlook

We expect the current bullish move to extend into the 50 EMA or slightly above, into 1.0610 and there, the sellers are likely to regain control, taking the pair lower for another attempt to break 1.0525. It must be noted that the US Dollar has shown clear weakness over the last couple of days, despite hints towards a possible rate hike and this could mean that bullish movement might not stop at the Moving Average or at 1.0610. However, the way price behaves there will offer clues about the future medium term trend.

Fundamental Outlook

The U.S. New Home Sales numbers are released today at 3:00 pm GMT and this is the only notable indicator of the day. Usually the impact is medium-to-low but a higher number than the forecast 575K shows increased activity in the housing sector and strengthens the US Dollar.

GBP/USD

The pair finally showed a little determination yesterday and managed to break the bearish trend line as well as the resistance at 1.2480, giving us a one-directional trading session.


Technical Outlook

Now that the pair has finally broken an important level, we expect to see additional movement in the direction of the break, which in this case is up. For today the first target is 1.2550 resistance but it’s very possible to see a return at the recently broken 1.2480 for a re-test form above. If this happens, the previous resistance will turn into support and the probability of an extended move to the upside will increase.

Fundamental Outlook

The United Kingdom didn’t schedule any important economic releases for today so the technical aspect will be the main market mover. We hope you had a profitable trading week and we wish you a relaxing weekend.

FOREX NEWS: PAIRS SLIDE LOWER, US DOLLAR SHOWS SIGNS OF RECOVERY

EUR/USD

Forex News: Friday the pair initially moved above the 50 period EMA but reacted to resistance and dropped back below the Moving Average. U.S. President Trump spoke at the Conservative Political Action Conference but the speech was announced late and came as a surprise.


Technical Outlook

The pair found resistance at 1.0610 and posted a nice drop that took it below the Exponential Moving Average. The Stochastic has crossed downwards in overbought territory and price shows lower highs and lower lows, which is a characteristic of a downtrend, thus making us anticipate a drop into 1.0525. However if price moves higher from the current level, then a new higher low will be created, and the pair may be entering a ranging period.

Fundamental Outlook

Today’s main event is the release of the U.S. Durable Goods Orders, scheduled at 1:30 pm GMT. The indicator shows changes in the total value of purchase orders for long lasting goods, with a life expectancy of at least 3 years. Higher values than the forecast 1.6% (previous -0.5%) usually strengthen the US Dollar but the impact is limited if the actual number comes close to analysts’ expectations.

GBP/USD

Friday the US Dollar strengthened and the pair dropped, nullifying all the gains accumulated a day before and leaving market participants with more uncertainty regarding the next direction.



Technical Outlook

The bulls ran out of steam at 1.2550 resistance and the pair dropped sharply to touch the recently broken bearish trend line. The way price behaves here will offer clues about future direction: if price responds well to the trend line and bounces higher, we expect another move into 1.2550 (not necessarily today) and otherwise, 1.2420 will be probably broken.

Fundamental Outlook

The economic calendar for the Pound is light today, without any major news announcements so we may get a ranging session, with price direction mainly affected by the technical aspect.

FOREX NEWS: U.S. GROSS DOMESTIC PRODUCT: A LIFELINE FOR THE US DOLLAR?

EUR/USD

Forex News: The first day of the week was controlled by the bulls despite a better than expected value for the U.S. Durable Goods Orders. The pair moved above the 50 period EMA and resistance was tested but not broken.


Technical Outlook

Yesterday’s price action created a higher low and the pair moved above the 50 Exponential Moving Average, showing bullish signs. However, the resistance at 1.0610 is not broken at the time of writing and this means that the way price behaves here may decide the future medium term direction: a break will make the bias bullish and 1.0650 will become the first target, otherwise the pair is headed towards 1.0525 zone once again.

Fundamental Outlook

Today’s main event is the release of the U.S. Preliminary Gross Domestic Product, scheduled at 1:30 pm GMT and expected to show a 2.1% change compared to the previous 1.9%. The GDP is an economy’s main performance gauge and higher numbers usually strengthen the currency although the effect may take some while to materialize.

Later in the day, at 3:00 pm GMT we have another U.S. release: the Consumer Confidence survey, which tries to gauge the opinions of about 5,000 households regarding current and future economic conditions. The forecast is 111.1 and numbers above this value usually strengthen the US Dollar.

GBP/USD

The pair had a mixed session Monday, without major advances to either side but we saw another failed attempt to move below 1.2420, which resulted in a bounce higher.


Technical Outlook

The pair has tried several times to break 1.2420 and has established another support at 1.2385 but it remains in a range overall. The current move up is likely to reach the 50 period Exponential Moving Average but there it will also encounter the resistance at 1.2480 and given the current conditions, we don’t expect that level to be broken.

Fundamental Outlook

The Pound has a light economic calendar for today, without any major economic releases, thus the U.S. events and the technical side will be the factors that will decide direction.

FOREX NEWS: CHOPPINESS CONTINUES, BREAKOUTS ON THE HORIZON


EUR/USD

Forex News: U.S. Gross Domestic Product showed a change of 1.9%, below analysts’ expectation of 2.1% and this contributed to bullish price action for the pair yesterday. Despite a better than expected U.S. Consumer Confidence survey released later in the day, the US Dollar couldn’t drive the pair lower.


Technical Outlook

Price has moved above the resistance at 1.0610 for the second time in a short while and it seems like the bulls are taking control of price action, although volatility remains relatively low. Price is trading above the 50 period Exponential Moving Average and above resistance, with the Relative Strength Index showing some upside momentum so we expect to see a climb into 1.0650 but once the RSI becomes overbought, the pair is likely to reverse, especially if this happens near resistance and volatility remains low.

Fundamental Outlook

Early today, at 2:00 am GMT, U.S. President Trump will speak before the Congress about healthcare and other topics. The impact of this speech is not known but caution is recommended. Later in the day, at 1:00 pm GMT the German Preliminary Consumer Price index comes out, showing changes in the price paid by consumers for the goods and services they purchase. This is the main gauge of German inflation and plays an important role for overall European inflation, with higher values than the expected 0.6% strengthening the Euro.

The last important release of the day is the U.S. Manufacturing PMI, scheduled at 3:00 pm GMT and expected to post a figure of 56.2. The survey acts as a leading indicator of economic health, derived from the opinions of purchasing managers and usually a higher value strengthens the US Dollar but the impact is often limited if the actual number matches expectations.

GBP/USD

The pair completed another lacklustre day yesterday, without any major developments on the fundamental scene and with choppy price action, which lacked clear direction.


Technical Outlook

Resistance was touched and price moved lower but failed to break support and now appears to be headed higher; this behaviour is a clear indication that neither bulls nor bears are in control and the pair lacks direction. As long as price remains between 1.2420 and 1.2480 and the 50 Exponential Moving Average is flat, we consider it in a range and our bias is neutral, expecting a strong breakout.

Fundamental Outlook

Today at 9:30 am GMT the Pound will be affected by the release of the British Manufacturing PMI, a survey of purchasing managers from the manufacturing sector. The indicator usually brings Pound strength if it posts a higher reading than today’s forecast of 55.7 but the impact is often mild.

FOREX NEWS: US DOLLAR GAINS THE UPPER HAND, BUYERS LIKELY TO RETALIATE

EUR/USD

Forex News: The US Dollar finally showed signs of strength yesterday and pushed the pair lower after another false break of resistance. The pair is still not clearly trending but at least it moves in a more decisive manner.


Technical Outlook

After another failed push above 1.0610, price moved below the 50 period Exponential Moving Average and continued lower into 1.0525 support. If the US Dollar strength seen yesterday will continue today, we expect to see a move below the current support and into 1.0460 but a bullish pullback is very likely before the next support is reached. As long as the pair remains below the 50 EMA, our bias is bearish.

Fundamental Outlook

The day’s highlight is the release of the Eurozone Consumer Price Index, scheduled at 10:00 am GMT and expected to show a change of 1.8%, same as previous; however, the release is likely to have just a medium impact because the German CPI, which accounts for an important part of overall European inflation, was already released yesterday. Normally, higher inflation brings strength for the currency.

GBP/USD

Yesterday the pair finally broke out of the tight range it was trapped in for a long while and key support was broken, opening the door for additional bearish movement.


Technical Outlook

The recent breakout will probably generate a move into 1.2250 support but before that can happen, it’s very possible to see a re-test of 1.2350 from below. If this previous support turns into resistance, then the chances of a move into 1.2250 will increase, otherwise the pair is likely to re-enter a ranging condition. The oscillators are becoming oversold and this makes a pullback more likely.

Fundamental Outlook

The British Construction PMI is released today at 9:30 am GMT and is the only notable event for the Pound. This survey acts as a leading indicator of optimism and economic health but the impact is usually low if the actual number matches analysts’ forecast, which for today is 52.2, same as previous.

FOREX NEWS: OVERSOLD LEVELS CALL FOR BULLISH PULLBACKS


EUR/USD

Forex News: Yesterday the Eurozone CPI showed that inflation is improving but despite this, the pair descended below 1.0525 after a small bullish pullback. Volatility remained relatively high and price approached minor support.


Technical Outlook

The fact that 1.0525 support was broken yesterday is a major victory for the bears but it must be noted that this level was broken before and price returned above it almost immediately. Also, we have minor support around 1.0495 and the Stochastic is close to oversold, so we expect to see a bounce higher. If the pair remains below 1.0525, the next target will become 1.0460, otherwise the move up may find resistance at the 50 period EMA.

Fundamental Outlook

At 3:00 pm GMT the U.S. Non-Manufacturing PMI (also called Services PMI) is released, showing the opinions of about 400 purchasing managers regarding the condition of the services sector. The forecast is 56.5, same as previous and usually numbers above it, strengthen the US Dollar.

The last event of the week is a speech delivered by Fed Chair Yellen at the Executives Club of Chicago on the topic of economic outlook. The speech should be treated with caution because it may spark increased volatility; the time is 6:00 pm GMT.

GBP/USD

The British Construction PMI released yesterday matched analysts’ expectations and the event went mostly unnoticed but the pair continued lower and came very close to 1.2250 support.


Technical Outlook

The last candles show long wicks in both their upper and lower parts, which is a clear sign of indecision but also a warning that the bearish move will retrace higher. On top of that, both oscillators are moving into oversold territory, further increasing the chances of a move north. If this type of move occurs today, we don’t expect it to surpass 1.2350 but if the pair moves below 1.2250 before the mentioned pullback, the extent should be limited.

Fundamental Outlook

The British Services PMI is the last in this week’s series and shows the opinions of purchasing managers from the services sector regarding economic conditions in said sector. The impact is often low but usually, higher values than the expected 54.2 bring Pound strength; the time of release is 9:30 am GMT.

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

FOREX NEWS: US DOLLAR ON THE ROPES AGAIN, RESISTANCE THREATENED


EUR/USD

Forex News: The pair moved higher for the entire trading session Friday, with the most distance covered during Fed Chair Yellen’s speech, despite the fact that she mentioned a possible rate hike at the next Fed meeting.


Technical Outlook

Price travelled a very long distance compared to previous days and this usually generates a move to the opposite side in the form of a retracement. First resistance is located at 1.0630 and we expect it to be hit early in the day, then price to return lower but as long as the pair is trading above the 50 period Exponential Moving Average, our bias is bullish. A break of 1.0630 will open the door for 1.0680 but price will most likely retrace again before hitting that target.

Fundamental Outlook

The U.S. Factory Orders are today’s only notable indicator but usually the impact on the US Dollar is low, especially if the actual number matches the forecast. The release is scheduled at 3:00 pm GMT and the expected change is 1.1% (previous 1.3%); higher values strengthen the US Dollar and show that manufacturers will increase their activity to fill the orders.

GBP/USD

The pair briefly dipped below 1.2250 Friday but soon climbed back above it; most of the US Dollar weakness was seen during and after Janet Yellen’s speech but the bias is still bearish.


Technical Outlook

Although price climbed Friday, this doesn’t make our bias bullish and in fact, such a retracement higher was already predicted, mostly because the pair travelled a long distance without pullbacks and both oscillators were already oversold. The pair may continue higher but the extent of this correction should be limited and followed by another drop into 1.2250.

Fundamental Outlook

The economic calendar for the Pound is light, without any important releases, thus we may see ranging price action, influenced mainly by the technical aspect.

FOREX NEWS: BUYERS RUN OUT OF STEAM AT RESISTANCE. WHAT’S NEXT FOR THE US DOLLAR?

EUR/USD

Forex News: As it was expected, yesterday the pair retraced lower after Friday’s strong climb but resistance was tested before that. The fundamental scene was calm, without important releases.


Technical Outlook

The pair tested the resistance at 1.0630, which proved a strong barrier in front of rising price but today we expect another encounter with the mentioned level and the way price behaves there will determine the next direction. If the barrier cannot be surpassed on the second attempt, it should be considered a sign that the bulls have run out of steam and that we will probably see a move below the 50 period Exponential Moving Average. On the other hand, a break of 1.0630 will open the door for a touch of 1.0680.

Fundamental Outlook

Similar to yesterday’s trading session, the technical aspect will prevail today because the pair will not be affected by major economic releases for the Euro or US Dollar.


GBP/USD

Yesterday’s trading session was rather slow, without major developments on either side. The bullish retracement seems complete now and we expect the bears to step back in.


Technical Outlook

The pair was in need of a bullish retracement, mostly due to the oversold condition of both oscillators but now that retracement seems complete so we expect a break of 1.2250 support and a touch of 1.2215. If 1.2250 is not broken today, the pair will either enter a ranging period or will continue higher until the 50 period Exponential Moving Average is hit.

Fundamental Outlook

The United Kingdom didn’t schedule any important economic releases for today, so the technical side will be the deciding factor for direction.

FOREX NEWS: DOLLAR STRENGTHENS AHEAD OF FIRST U.S. JOBS DATA OF THE MONTH


EUR/USD

Forex News: Yesterday’s trading session was mostly controlled by the sellers, who managed to take the pair below the 50 period Exponential Moving Average. It is now clear that 1.0630 is strong resistance and that it will probably reject price in the future.


Technical Outlook

If the pair remains below the 50 period Exponential Moving Average, the current move will turn into a reversal of the previous move up and will make 1.0525 the first target. The Stochastic and Relative Strength Index are showing good downside momentum and this increases the chances of a move into the mentioned support. As long as the pair is trading below the 50 EMA our bias is bearish but an important role will be played today by the U.S. jobs data.

Fundamental Outlook

At 1:15 pm GMT we take a first look at the U.S. jobs situation with the release of the ADP Non-Farm Employment Change, a report that tracks changes in the total number of employed people, excluding the Government and Farming sectors. The impact is lower than the Government issued Non-Farm Payrolls (which is scheduled Friday) but nonetheless, the US Dollar usually reacts strongly to the data. Higher numbers than the forecast 184K show increased economic activity and signal a future increase in consumer spending.

GBP/USD

The US Dollar continued to strengthen against the Pound yesterday, breaking support and re-establishing a medium term downtrend.


Technical Outlook

The pair is now headed towards the key support zone between 1.2125 and 1.2090 and the overall picture seems bearish but it must be noted that the Relative Strength Index has entered oversold for the second time in a short while. This is a solid indication that the pair is likely to show a deeper retracement to the upside in the near future.

Fundamental Outlook

At 12:30 pm GMT the HM Treasury will release UK’s Annual Budget and this may trigger increased Pound volatility but the exact impact is not known.

FOREX NEWS: DRAGHI TAKES CENTRE STAGE AS THE MARKET PREPARES FOR ECB MEETING

EUR/USD

Forex News: Yesterday the ADP Non-Farm Employment report showed a reading of 298K, way above the expected 185K but the Dollar’s reaction was mixed, strengthening at first and then erasing all gains and moving back to where the initial drop started.


Technical Outlook

There is no clear reason for the climb back up but it must be noted that the entire move is just under 30 pips and no major S/R level was broken so we may very well see another drop generated by a delayed effect of yesterday’s U.S. jobs data. The pair is still under the 50 period Exponential Moving Average so the bias is bearish but direction will probably be decided by the ECB meeting today.

Fundamental Outlook

Today the focus is on the Euro as the ECB will announce their interest rate at 12:45 pm GMT, followed at 1:30 pm GMT by a press conference held by ECB President Mario Draghi. The rate is not expected to change from the current 0.00%, so unless anything surprising happens, the event will mostly go unnoticed because usually traders wait for Draghi’s reaction at the press conference. The way he answers journalists’ questions will have a high impact on the Euro, especially if he hints towards a rate hike.

GBP/USD

Price action established 1.2215 as resistance and continued lower as the Pound weakened and the greenback strengthened throughout the day, generating a bearish session overall.


Technical Outlook

The pair is headed towards the support at 1.2125 but the Stochastic and Relative Strength Index are both showing clear oversold condition and also bullish divergence (price is making lower lows while the oscillator is making higher lows). These factors make us anticipate a bounce higher, possibly into the newly established resistance at 1.2215, but may extend into 1.2250.

Fundamental Outlook

It’s another slow day for the Pound as the United Kingdom did not schedule major economic news releases, thus the pair will be mainly affected by the technical side.

FOREX NEWS: NFP REPORT – FINISHING THE WEEK WITH A BANG

EUR/USD

Forex News: After reaching the support at 1.0525 the pair immediately jumped higher, boosted by a stronger Euro. The ECB decided to maintain the rate unchanged, as expected but Draghi’s press conference was the main catalyst for the move.


Technical Outlook

It looks like the pair is entering a ranging period, capped by 1.0525 as support and 1.0630 as resistance. Yesterday’s price action clearly showed that 1.0525 is still a strong support and that it may reject falling price in the future but for the time being the Euro is strengthening and the pair seems headed towards 1.0630. Today’s direction will be heavily affected by the U.S. jobs data and the technical aspect will be somewhat secondary.

Fundamental Outlook

The U.S. Non-Farm Payrolls report is released today at 1:30 pm GMT, showing changes in the total number of employed people, excluding the farming sector. This is widely considered the most important jobs data in the U.S. and usually has a very strong impact on the US Dollar, with higher values than the forecast 185K, strengthening it.

GBP/USD

As it was expected, the pair retraced higher yesterday, following an oversold condition of the oscillators. However, movement was rather slow and without conviction from either side.


Technical Outlook

We will probably see an extended period when the pair will remain trapped between 1.2215 resistance and 1.2125 support, unless today’s NFP can trigger strong movement and a clear breakout. Both oscillators are moving upwards, from their respective oversold levels, thus increasing the chances of a move into resistance but the medium-term downtrend is down and this makes another drop probable. Our bias is slightly bearish, expecting the NFP release for further clues.

Fundamental Outlook

At 9:30 am GMT the Pound will be affected by the release of the Manufacturing Production, an indicator that tracks changes in the total value of goods produced by manufacturers. The expected change is -0.6% from the previous 2.1% and higher numbers are usually beneficial for the Pound but the pair will probably respond stronger to the NFP report later in the day.

FOREX NEWS: US DOLLAR WEAKNESS – A TEMPORARY AFFAIR?

EUR/USD

Forex News: The US Dollar softened Friday against the Euro, despite the Non-Farm Payrolls report posting a number of 235K jobs, higher than the expected 196K. The weakness was mostly generated by a drop in hourly wages.


Technical Outlook

Friday’s strong climb took the pair above 1.0680 resistance and sent the two oscillators in overbought territory. This move is likely to retrace lower and to find support at 1.0630 but if price continues higher, we don’t expect it to pass 1.0710 before a retracement occurs. Keep in mind that the NFP report was better than expected and this may trigger a delayed strengthening effect on the US Dollar, so a drop into the 50 period Exponential Moving Average is not out of the question.

Fundamental Outlook

At 1:30 pm GMT, ECB President Mario Draghi will deliver a speech at the Massachusetts Institute of Technology Labs for Innovation Science and Policy Fostering, in Frankfurt. Although the topic is not directly tied to the financial markets, caution is recommended, as always when Draghi speaks. Other than this, no major events will affect the currencies today.

GBP/USD

The pair was mostly unaffected by the Non-Farm Payrolls and remained in a relatively tight range for the entire duration of Friday’s trading session, without threatening support or resistance.


Technical Outlook

Friday’s price action doesn’t give a lot of clues about the next move and our bias is neutral until 1.2215 resistance or 1.2125 support is broken. The pair is in a medium term downtrend but the Relative Strength Index and Stochastic are exiting oversold, moving up and thus increasing the chance of a test of 1.2215. Given the lack of major economic indicator releases, we don’t expect to see a clean break of either support or resistance today.

Fundamental Outlook

United Kingdom’s economic calendar is light and the Pound will not be affected today by major economic releases.

[B]FOREX NEWS: US DOLLAR STILL FEEBLE, RESISTANCE EXPOSED[/B]

[B]EUR/USD[/B]

Forex News: The pair pushed into 1.0710 resistance but there, an expected retracement took place and now price is moving lower, below 1.0680. Mario Draghi’s speech didn’t have a strong impact and yesterday’s price direction was mostly driven by the technical aspect.

[B]Technical Outlook[/B]

As seen from the chart above, the Stochastic and Relative Strength Index reached overbought almost at the same time and this also coincided with the touch of 1.0710 resistance. These factors generated a bearish move, which is considered a retracement at the moment, not a reversal. We expect 1.0710 to be tested again today and if the bulls fail to take price above it, this will suggest that a reversal is in the making and 1.0630 will become the first target.

[B]Fundamental Outlook[/B]

The first important release of the day is the German ZEW Economic Sentiment, a survey of about 275 German investors and analysts that tries to gauge their opinions regarding a 6-month economic outlook. The survey acts as a leading indicator of optimism, with higher numbers strengthening the Euro. The time of the release is 10:00 am GMT and the expected number is 13.2.

The US Dollar will be affected by the release of the Producer Price Index, which tracks changes in the price charged by producers for their goods. It acts as a leading indicator of inflation because a higher producer price will eventually translate into a higher price paid by the consumer. The release is scheduled at 12:30 pm GMT and the forecast is a change of 0.1% (previous 0.6%).

[B]GBP/USD[/B]

The pair retraced higher, as it was signaled by the long distance traveled to the downside and by the bottoming pattern formed near 1.2125 support. Overall the bias remains bearish after the retracement becomes exhausted.

[B]Technical Outlook[/B]

Yesterday’s climb took the pair into the 50 period Exponential Moving Average and now the candles are showing long wicks, which is a sign of indecision; however, this could be just an accumulation for a push above the 50 EMA and above 1.2250 resistance. If this is the case and the two forms of resistance are broken, the pair is likely to climb back towards 1.2350 but this distance will not be traveled in one day unless surprising events take place.

[B]Fundamental Outlook[/B]

The United Kingdom didn’t schedule important economic releases, thus the deciding factors for direction will be the technical aspect and the U.S. Producer Price Index.

FOREX NEWS: FED IN THE SPOTLIGHT, US DOLLAR SET FOR BIG MOVES. RATE HIKE EXPECTED

EUR/USD

Forex News: European data disappointed yesterday, while the U.S. Producer Price Index showed a better than expected change, triggering a drop into support and a trading session mostly controlled by the bears.


Technical Outlook

Price is testing the support at 1.0630 and the 50 period Exponential Moving Average is in close vicinity, creating a confluence zone which will be difficult to break. The current level was touched several times in the recent past and almost every time the pair had a strong reaction to it, so the same may be happening now; a bounce here is very possible but on the other hand, a break followed by a move below the 50 EMA would be a clear sign of strength from the part of the sellers.

Fundamental Outlook

Today is a key day for the US Dollar, because the Fed will meet to announce the interest rate at 6:00 pm GMT and Fed Chair Yellen will hold a press conference half an hour later, discussing the rate decision. A rate hike is expected, from the current <0.75% to <1.00% and if this prediction comes true, the US Dollar will likely strengthen and a lot of volatility will be generated. We recommend caution if trading during the event.

GBP/USD

Price dropped yesterday, partly due to technical reasons and partly due to Brexit fears, so now the pair is in a bearish environment, testing support.


Technical Outlook

After failing to stay above the 50 period Exponential Moving Average, the pair is testing 1.2125 and the US Dollar seems to have regained some of its strength. However, a stronger support is located at 1.2090 but it must be noted that the pair is already showing signs of rejection at 1.2125. Today’s price direction will be mainly affected by the fundamental side but the levels to watch remain 1.2090 as support and 1.2250 as resistance.

Fundamental Outlook

At 9:30 am GMT we take a look at the UK unemployment situation with the release of the Claimant Count Change, an indicator that shows changes in the number of people who asked for unemployment benefits. The forecast is 3.2K (previous -42.4K) and higher numbers usually weaken the Pound. Of course, later in the day the pair will be directly affected by the Fed rate decision.