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.