Technical News | Daily

FOREX NEWS: WEAKNESS CONTINUES, RETRACEMENTS IN SIGHT AS OSCILLATORS REACH OVERBOUGHT LEVELS

EUR/USD

Forex News: The pair pushed higher yesterday, above 1.0710 and returned to re-test the level from above, thus establishing it as support. The economic data released yesterday was mixed and didn’t have a substantial impact on the pair.


Technical Outlook

It looks like the bulls are in clear control of the pair and now that 1.0710 is support, we expect price to head towards 1.0800 in the medium term. However, it must be noted that both oscillators are approaching overbought and the Relative Strength Index is also showing bearish divergence (price is making a higher high and the oscillator is making a lower high), which is a signal that a move south may soon follow. If this potential move extends below 1.0710 and 1.0680, the 50 EMA will become the first place where bullish action may resume.

Fundamental Outlook

The University of Michigan will release today at 2:00 pm GMT a Consumer Sentiment survey, which gauges the opinions of about 500 consumers regarding current and future economic conditions. Usually a higher number than the forecast 97.1 shows optimism and strengthens the US Dollar but to a limited extent.

Also today the G20 Meetings start, attended by central bankers and finance ministers from the member states. Volatility may increase, depending on the matters discussed.

GBP/USD

The Bank of England decided to maintain the rate unchanged but one of the 9 members of the Monetary Policy Committee (MPC) saw the need for a rate hike (previously all agreed to hold rates) and this triggered Pound strength that took the pair above another resistance level.


Technical Outlook

Although the Pound is in control and several resistance levels have been broken, we expect a move lower, possibly after 1.2385 is reached. Supporting this view is the fact that both oscillators are approaching overbought and also, price travelled a long distance without a deeper pullback. A good target for this potential move down is 1.2300.

Fundamental Outlook

The Pound will not be affected by major economic releases today but United Kingdom representatives will attend the G20 Meetings and this may be a cause for increased volatility.

DAILY ANALYSIS: PULLBACKS IN SIGHT, AS OSCILLATORS REACH OVERBOUGHT LEVELS

EUR/USD

Daily Analysis: The Consumer Sentiment survey released Friday by the University of Michigan didn’t have a strong impact on the US Dollar, mostly because it came very close to analysts’ expectations, but the pair retraced lower due to overbought conditions signalled by both oscillators.


Technical Outlook

The move lower seen Friday should be considered just a simple retracement at the moment, not a reversal but it is very possible to extend into the support at 1.0710. As long as this barrier remains intact, our view is bullish, anticipating a move into 1.0800; however, such a long distance will not be travelled today probably, mostly due to the lack of major economic releases, a fact which may generate ranging price action. Also, the oscillators are just coming out of overbought, favouring a touch of support.

Fundamental Outlook

Today’s direction will be mainly driven by the technical aspect because the United States and Europe have a lacklustre economic calendar, without any major releases.

GBP/USD

Price action was choppy Friday but the buyers managed to remain in control and to keep the pair above 1.2350. Rejection is present and the upside momentum seems to fade away but the medium term bias is still bullish.


Technical Outlook

Long wicks have started to appear on the last few candles and both oscillators have reached overbought, with price at resistance. These factors suggest that a deeper retracement will soon follow, so we don’t expect to see a break of 1.2420 today but if the pair does move above this level, the extent should be limited. After the potential retracement, we expect the pair to move above 1.2420 and into 1.2480 but this will not happen today unless surprising developments take place.

Fundamental Outlook

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

FOREX NEWS: RESISTANCE HOLDS. US DOLLAR STAGES A COMEBACK?

EUR/USD

Forex News: Yesterday’s price action slowed down and the pair retraced after making another attempt to break last week’s high. The fundamental scene was lacklustre, without major announcements.


Technical Outlook

Price printed a lower high, which is a sign that the bullish run may come to an end or at least that we will see a move into 1.0710 support. By the time price reaches support, the 50 period Exponential Moving Average will probably climb and will be in close vicinity of 1.0710, thus creating a confluence zone that will increase the chances of a bounce higher. A move below the moving average and the mentioned level would show that the balance of power is tipping towards the sellers; however, the pair is still in a good uptrend, so a move above the minor resistance around 1.0775-1.0780 will add more strength and would make 1.0800 the first target.

Fundamental Outlook

Today the ECOFIN Meetings start and will be attended by Finance Ministers from the European Union member states. The matters discussed may have an impact on the Euro but the meetings are closed to the press and a formal statement is released at the end of the day.

GBP/USD

Price pierced 1.2420 resistance yesterday but in the afternoon the US Dollar showed signs of recovery and pushed the pair lower. The bearish move is considered a simple retracement, which was overdue, considering the overbought position of the oscillators.


Technical Outlook

The move lower seen yesterday was mostly generated by the fact that price travelled a long distance north without a proper retracement and was signalled earlier by the overbought condition of the oscillators. However, the pair remains in a short-to-medium term uptrend and this means that once the overbought condition is cleared and a notable level is touched, we may see another push higher. The first level of importance is 1.2350 and there we expect to see a resumption of the uptrend.

Fundamental Outlook

The release of the British Consumer Price Index is today’s highlight, scheduled at 9:30 am GMT and expected to show a change of 2.1% from the previous 1.8%. The CPI is the main gauge of inflation and can have a strong impact on the currency, with higher numbers usually strengthening it so be careful if you plan on trading at the time of release.

FOREX NEWS: POUND POSTS FRESH HIGHS ON THE BACK OF SOLID INFLATION DATA

EUR/USD

Forex News: After moving very close to 1.0710 support yesterday, the pair jumped higher and briefly took out 1.0800 resistance, in a session that was controlled by the bulls almost entirely.


Technical Outlook

The resistance at 1.0800 was breached yesterday but after moving above it, the pair returned below and is now showing some signs of exhaustion, with the Relative Strength Index continuing to hover near its overbought level. Considering that 1.0800 is both psychological and technical resistance, we expect to see a deeper retracement from here, and a potential touch of 1.0775, which was previously resistance and now may turn into support. Overall the bias is bullish and the uptrend is healthy but in need of a pullback.

Fundamental Outlook

The day ahead lacks major economic releases, with the most notable one being the U.S. Existing Home Sales, scheduled at 2:00 pm GMT and expected to show a reading of 5.59M. The indicator shows the annualized number of homes sold, excluding new constructions and usually strengthens the US Dollar if it posts figures above expectations but the impact is not very high.

GBP/USD

The British Consumer Price Index released yesterday exceeded expectations, showing a 2.3% change and this was the main reason why the Pound had another solid day against an already soft Dollar.


Technical Outlook

After bouncing around 1.2350 support, the pair shot up through 1.2420 and reached 1.2480 resistance. In the past the pair spent a lot of time moving above and below this level, so we are likely to see some reaction this time as well; also, the Relative Strength Index is touching its overbought level, signalling that a move south may be next. If the current bullish impulse continues past 1.2480, we expect the extent to be limited and followed by a pullback but overall the bias remains bullish.

Fundamental Outlook

The Pound will not be affected by major economic releases, so the technical aspect will be the main driver behind price action today.

FOREX NEWS: BULLISH MOMENTUM WANES, BRITISH RETAIL SALES EYED FOR NEXT MOVE

EUR/USD

Forex News: The pair slowed down yesterday as the upside momentum faded and the bears stepped in, creating a pullback. The U.S. House data was softer than anticipated but the impact was mild and this contributed to the overall slow session.


Technical Outlook

The pair retraced lower but bounced perfectly at 1.0775, which is now support and a place where the pair might show some interesting movement in the future. The bias remains bullish and we expect to see a touch of 1.0830, followed by 1.0850 but a move below 1.0775 would invalidate such a scenario for the time being and would make the 50 period Exponential Moving Average the first target.

Fundamental Outlook

At 12:45 pm GMT, Fed Chair Yellen will speak at the Federal Reserve System Community Development Research Conference. We don’t expect this speech to trigger strong movement but it all depends on the matters she will discuss and her attitude; nonetheless, caution is recommended.

The release of the U.S. New Home Sales is today’s other notable event, scheduled at 2:00 pm GMT and expected to show a number of 566K. The impact is usually medium but a reading above expectations is considered bullish for the US Dollar.

GBP/USD

The pair had trouble breaking the resistance zone around 1.2480 and retraced lower yesterday, for a perfect touch of 1.2420. For now support is holding and the bias remains bullish.


Technical Outlook

The bounce at 1.2420 and the consequent move up show that the US Dollar is still weak and that we will soon see a break of 1.2480, which will open the door for a move into 1.2550. Both oscillators remain very close to overbought and this increases the chances of an extended move lower but even if this happens, as long as the pair is trading above the 50 period Exponential Moving Average, the overall bias is bullish.

Fundamental Outlook

The British Retail Sales come out today at 9:30 am GMT, showing changes in the total value of sales made through retail outlets during the previous month. A higher change than the forecast 0.4% usually brings Pound strength and the opposite is true for a lower reading.

FOREX NEWS: BEARISH PRESSURE MOUNTS, AHEAD OF EUROPEAN PMIS, U.S. DURABLE GOODS ORDERS

EUR/USD

Forex News: The US Dollar remained mostly indifferent to Yellen’s speech and to the better than expected figure posted by the U.S. New Home Sales. All this combined with the lack of major news from the Euro side, generated a slow and choppy trading session.


Technical Outlook

It’s becoming clearer that the bullish momentum has faded as the buyers failed to reach 1.0830 and the candles started to show long wicks in their upper side. However, the sellers also lack strength and determination so currently there is no short-term clear bias but as long as the 50 period Exponential Moving Average is below price and angled upwards, the overall trend is up.

Fundamental Outlook

At 9:00 am GMT two medium-impact indicators are released: the European Manufacturing PMI (expected reading 55.3) and Services PMI (expected reading 55.4). These are surveys of purchasing managers that focus on the health of the two sectors and usually strengthen the Euro if they show a better than expected reading but the releases tend to be overlooked if the actual figure matches or comes very close to analysts’ expectations.

On the US Dollar side we have the Durable Goods Orders, released at 12:30 pm GMT and expected to show a change of 1.1%. The impact is medium to high, with numbers above forecast strengthening the greenback.

GBP/USD

The Pound continued its climb yesterday, fuelled by better than expected British Retail Sales (actual 1.4%; forecast 0.4%). Resistance is clearly broken but the oscillators are still overbought.


Technical Outlook

The pair is trading above the resistance at 1.2480 but most of yesterday’s move was generated by the solid British Retail Sales reading and from a strictly technical point of view, the need for a retracement lower has increased. Both oscillators are overbought and price has travelled a long distance without a proper pullback so today we expect a move south. The levels of interest are 1.2550 as resistance and 1.2480 as support.

Fundamental Outlook

The Pound will not be affected today by major economic releases, so the technical aspect and the U.S. Durable Goods Orders will be the main factors that will affect the pair’s direction.

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

FOREX NEWS: RESISTANCE HOLDS, US DOLLAR PUSHES BOTH PAIRS LOWER

EUR/USD

Forex News: German PMI surveys released Friday showed better readings than analysts had expected and on the other hand the US Dollar remained mostly unaffected by the Durable Goods Orders. All this generated another bullish session, with the pair testing resistance.


Technical Outlook

The resistance at 1.0800 was again breached but the bulls couldn’t push price higher, which is a sign of weakness and an early indication that we will probably see a touch of the 50 period Exponential Moving Average today. As an alternate scenario, a continuation of the bullish move will probably extend into 1.0830, possibly 1.0850 but we don’t expect the upper resistance to be broken.

Fundamental Outlook

At 8:00 am GMT the German IFO Business Climate survey comes out, showing the opinions of about 7,000 German businesses regarding current economic conditions as well as a 6-month outlook. The expected figure is 111.2 and usually the Euro is positively impacted by numbers that exceed the forecast.

GBP/USD

For the most part of Friday’s trading session the pair moved sideways after establishing resistance at 1.2530. The overall bias remains bullish but the current move looks like the beginning of a deeper retracement.


Technical Outlook

If the bears manage to break 1.2480 and re-test it from below, thus establishing the level as resistance, then the next target will become the 50 period Exponential Moving Average, which will probably climb above 1.2420 by the time price descends to touch it. It must be noted however that the pair is in a clear uptrend from a medium term perspective and this means that once the 50 EMA is touched, we may see rejection and a potential move up.

Fundamental Outlook

The Pound will not be affected by any important economic releases today, so the technical aspect will be the main market mover.

FOREX NEWS: US DOLLAR ON THE ROPES AGAIN, PULLBACKS STILL A NECESSITY

EUR/USD

Forex News: The US Dollar was battered into a corner during yesterday’s trading session, following healthcare discussions in the U.S. over the weekend. The Euro benefited from a higher reading for the German IFO survey and all this took the pair significantly higher.


Technical Outlook

The week opened with a gap and the pair shot through 1.0830 and 1.0850 resistances, so the expected retracement lower didn’t occur. The move was mostly generated by fundamental (political) reasons and now a pullback is even more likely, considering that the Relative Strength Index and the Stochastic are in deep overbought territory and the pair travelled a long distance without retracement. It must also be noted that weekly gaps are usually closed – meaning that price will return to the place where the gap originated – but the timeframe for this potential move is not known.

Fundamental Outlook

At 2:00 pm GMT the Conference Board Inc. will release the U.S. Consumer Confidence, a survey of about 5,000 households, focused on their opinion regarding economic conditions. If consumers show confidence in their financial situation, they are likely to spend more, thus boosting consumer spending which represents an important part of overall economic activity. The expected value for today is 113.9 and higher values usually strengthen the US Dollar.

GBP/USD

US Dollar weakness was seen against most of its counterparts and the Pound was no exception, thus the pair climbed strongly yesterday, for almost the entire trading session.


Technical Outlook

After establishing 1.2480 as support the pair rallied and broke through 1.2550, marking an important victory for the bulls. However, even before this last climb, price was in need of a retracement and now the chance for a move lower has increased, considering how much it moved to the upside but also the overbought condition of the Relative Strength Index. These factors make us believe that today we will see a pullback that will have 1.2550 as target. To the upside the first level of importance is located at 1.2675 but we don’t believe it will be touched before a move down occurs.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases for today, so the U.S. Confidence survey and the technical aspect will be the main market movers.

FOREX NEWS: RETRACEMENTS UNDERWAY, SUPPORT TARGETED

EUR/USD

Forex News: The U.S. Consumer Confidence survey released yesterday showed a reading of 125.6, above analysts’ expectation of just 113.9 but surprisingly the release didn’t create strong movement and the pair drifted sideways almost the entire day.


Technical Outlook

The pair created minor resistance at 1.0905 and is now testing 1.0850 from above, trying to establish it as support. If the level will become support, pushing price higher, we expect to see another encounter with 1.0905 zone but it must be noted that the weekly gap is still open and the pair is still in need of a deeper retracement. The uptrend is still strong but our bias is bearish for today, anticipating a move below 1.0850.

Fundamental Outlook

The U.S. Pending Home Sales are today’s only notable release, scheduled at 2:00 pm GMT and expected to show a change of 2.3%. The indicator shows changes in the total number of houses under contract to be sold and usually has a low-to-medium impact on the US Dollar, with higher numbers strengthening it.

GBP/USD

Yesterday’s trading session belonged to the bears and the pair dropped below 1.2550, partly helped by a better than expected U.S. Consumer Confidence survey that strengthened the US Dollar and took price below the previous resistance.


Technical Outlook

Yesterday the pair printed a lower high and broke below 1.2550, which was prior resistance. This type of behaviour shows that a deeper retracement is underway and makes 1.2480 the first target, followed by the 50 period Exponential Moving Average. If the pair reaches these targets, we expect it to climb again, considering that a clear uptrend is still in place.

Fundamental Outlook

At 8:30 am GMT the Bank of England will release the Net Lending to Individuals, a report that shows changes in the total credit issued to consumers. A higher value shows that consumer spending is likely to increase in the future and usually this strengthens the Pound but the indicator is known to have just a medium impact. The forecast for today is 4.9 Billion, compared to the previous 4.8 Billion.

FOREX NEWS: PAIRS UNDER HEAVY SELLING PRESSURE AHEAD OF GERMAN INFLATION DATA AND UNITED STATES GDP

EUR/USD

Forex News: The U.S. Pending Home Sales released yesterday showed a solid reading, increasing by 5.5% (forecast 2.3%) but the US Dollar started to strengthen even before the release, breaking several support levels as well as the 50 EMA.


Technical Outlook

For quite a while we expected a move lower, due to the overbought position of the two oscillators but also because weekly gaps tend to be closed (price returns to where the gap originated). Now the gap is closed and the retracement complete but considering that the 50 period Exponential Moving Average was broken decisively, we may see this pullback turn into a full scale reversal. If the pair cannot climb above the 50 EMA and if the line turns into resistance, we may see a drop into 1.0700 zone, otherwise uptrend resumption is underway.

Fundamental Outlook

At 12:00 pm GMT the Euro will be affected by the release of the German Preliminary Consumer Price Index, which is the main gauge of inflation in Germany and accounts for a big part of overall European inflation. The expected change is 0.4% and readings above forecast usually generate Euro strength.

On the US Dollar side we have the U.S. Final Gross Domestic Product, an indicator that shows changes in the value of goods and services produced by an economy and acts as the main gauge of economic health. The expected change is 2.0% and higher numbers are beneficial to the greenback.

GBP/USD

The sellers stepped back in, taking the pair below the 50 period Exponential Moving Average and both oscillators moved out of the overbought territory where they previously spent a long time. The pair is now showing signs of recovery but signals are mixed.


Technical Outlook

After breaking the 50 EMA, price touched the support at 1.2385 and bounced higher, into the resistance at 1.2480. These levels will be important for short to medium term movement because rejection is visible at both of them, so we may get a trading session with price trapped between them. If 1.2385 will be broken to the downside, we can consider the move a reversal of the uptrend and we can expect to see lower prices in the medium term.

Fundamental Outlook

The Pound will not be affected by major economic releases today, thus the technical aspect and the U.S. GDP will be the main drivers behind price action.

FOREX NEWS: US DOLLAR SHOWS MIXED SIGNALS FOR THE LAST TRADING DAY OF THE WEEK

EUR/USD

Forex News: The US Dollar had another strong day against the Euro, fuelled by a better than expected GDP, while the single currency took a blow from thin German inflation data, so the pair moved closer to support.


Technical Outlook

Price remained below the 50 period Exponential Moving Average and below 1.0775, showing that we may be dealing with a reversal, not a simple retracement. For today we expect an encounter with 1.0710 support but it must be noted that now both the Relative Strength Index and Stochastic have become oversold, signalling that a bounce at support may happen. Also, the pair has been in an uptrend from the beginning of the month and this increases the chance or another move up.

Fundamental Outlook

Today at 9:00 am GMT we take a look at European inflation with the release of the Consumer Price Index. Because the German CPI, which accounts for a big part of overall EU inflation, was released yesterday, the impact of today’s announcement may be somewhat muted but either way, numbers above the forecast 1.8% usually generate Euro strength.

GBP/USD

The Pound rallied yesterday, taking the pair above the 50 period Exponential Moving Average and above 1.2480 resistance, thus marking the end of the bearish retracement.


Technical Outlook

The bounce at 1.2385 followed by the bullish break of the 50 EMA shows that the Pound is not ready to give up control just yet and makes 1.2550 the first target for today. It is very possible to see a re-test of 1.2480 from above and if the pair bounces higher from there, it means that the level is now support, a thing that will increase the possibility of a break through 1.2550.

Fundamental Outlook

At 8:30 am GMT the Pound will be affected by two important releases: the Final version of the Gross Domestic Product (expected value 0.7%) and the Current Account (expected value -16.3 Billion). The first indicator is the main gauge of economic performance and the second measures the difference between imported and exported goods and services. Higher numbers for one or both indicators usually strengthen the Pound, taking the pair higher.

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

FOREX NEWS: MANUFACTURING DATA HOLDS TODAY’S HEADLINES

EUR/USD

Forex News: Eurozone’s main gauge of inflation released Friday showed a disappointing change of 1.5% (expected 1.8%) and this allowed the US Dollar to drag the pair below support, for yet another bearish session.


Technical Outlook

The support at 1.0680 is now broken but both the Stochastic and Relative Strength Index are clearly oversold and the pair travelled a long distance without pullback. This indicates that a move up will soon follow, possibly after 1.0630 is touched but as long as the pair remains below the 50 period Exponential Moving Average, our bias is bearish and we expect another drop after the mentioned retracement.

Fundamental Outlook

At 2:00 pm GMT the United States will release the Manufacturing PMI, a survey of purchasing managers from the manufacturing sector, focused on the economic health of said sector. Usually, a higher reading than forecast shows optimism and strengthens the US Dollar but the impact is low-to-medium; today’s forecast is 57.2 while the previous value was 57.7.

GBP/USD

The Pound was boosted Friday by a better than expected Current Account value and this was partly the reason why the pair moved higher throughout the session.



Technical Outlook

After failing to break the 50 period Exponential Moving Average, the pair shot up and reached the resistance located at 1.2550, leaving us with a classic ‘bounce-or-break’ scenario. A break of this level would increase the chance of a move into 1.2615 (probably this target will not be reached in one day), while a bounce lower would mean that the pair is headed for the 50 EMA again. The PMI surveys released today for the Pound and US Dollar will play an important role for the outcome of the mentioned scenario.

Fundamental Outlook

The only notable release for the Pound is the British Manufacturing PMI, which as mentioned above, is a survey of purchasing managers, focused on economic and business conditions in the manufacturing sector. The release is scheduled at 8:30 am GMT and the forecast is 55.1, a small increase from the previous 54.6.

FOREX NEWS: PAIRS TRAPPED BETWEEN SUPPORT AND RESISTANCE. BREAKOUTS IN THE MAKING

EUR/USD

Forex News: The pair had a lacklustre and ranging day, without any special developments to either side. The U.S. Manufacturing PMI matched analysts’ forecast and this contributed to the stalemate seen yesterday.


Technical Outlook

Yesterday’s price action confirmed 1.0680 as short term resistance but the Relative Strength Index and Stochastic are starting to climb out of oversold territory and this increases the chance of a move up, towards the 50 period Exponential Moving Average. If the pair breaks 1.0680 but stops at 1.0710, we expect a drop into 1.0630, otherwise we will probably see a stronger move north.

Fundamental Outlook

There are no important releases on the Euro and US Dollar economic calendar so the deciding factor for price direction will be the technical aspect.

GBP/USD

The British Manufacturing data released yesterday showed a disappointing reading of just 54.2 (expected 55.1) and this was one of the reasons why the Pound weakened, allowing the bears to take the pair into support.


Technical Outlook

The bulls encountered heavy resistance at 1.2550, which is a level that continues to be of importance for short and medium term movement. However, the pair is having trouble breaking through the confluence zone created by 1.2480 and the 50 period Exponential Moving Average, so we may be facing the start of a ranging period, with price trapped between 1.2550 and 1.2480. A strong break of either one of these levels will probably decide the next direction but until that happens, our view is neutral.

Fundamental Outlook

The British Construction PMI is released today at 8:30 am GMT and may be a catalyst for a break of one of the levels mentioned earlier. This survey is derived from the opinions of purchasing managers from the construction sector and shows their optimism regarding business conditions in said sector; the expected figure is 52.5, same as previous and usually a higher number strengthens the Pound.

FOREX NEWS: BIG DAY FOR THE US DOLLAR: EMPLOYMENT DATA AND FOMC MEETING MINUTES

EUR/USD

Forex News: The Euro-Dollar had another slow day, mostly because neither currency was affected by major news releases. Price drifted lower, approaching support but movement was choppy and without clear energy.


Technical Outlook

The bearish momentum has slowed down considerably and it appears like the support at 1.0630 will not be broken before a retracement to the upside occurs. The first resistance is located at 1.0680, followed by 1.0710 and the 50 period Exponential Moving Average but a break of these levels will depend on the fundamental side which will steal the spotlight today and will heavily influence price direction.

Fundamental Outlook

At 12:15 pm GMT we take a first look at United States jobs data with the release of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the Government and the farming sector. The indicator is less important than the Non-Farm Payrolls that will be released later in the week, but a higher number of employed people will strengthen the US Dollar under normal circumstances; today’s forecast is 191K, a drop from the previous 298K.

Later in the day, at 6:00 pm GMT the FOMC will release the Minutes of their latest Meeting, containing details about the reasons that determined the latest rate decision. Usually this release creates strong movement if it contains hints about future rate increases or other important monetary policy decisions.

GBP/USD

The Pound continued to weaken yesterday, partly due to thin Construction data. The first level of support was clearly broken but the bears ran out of steam at the next level and now bullish pressure starts to mount.


Technical Outlook

After breaking 1.2480 and the 50 period Exponential Moving Average, the pair quickly moved into 1.2420 where it bounced higher. Today we will likely see another encounter with 1.2480 but if the bulls fail to break this level, price will probably drop into 1.2385 and possibly 1.2350. The US Dollar will be affected by two important releases and the technical aspect will be secondary.

Fundamental Outlook

The Services Purchasing Managers’ Index is the last survey of the week for the Pound, released at 8:30 am GMT and expected to show a value of 53.5. The survey acts as a leading indicator of economic health and can strengthen the Pound but the impact is often limited if the actual number comes close to analysts’ forecast.

FOREX NEWS: BULLISH PRESSURE MOUNTS AS SUPPORT HOLDS AND US DOLLAR WEAKENS

EUR/USD

Forex News: The pair remained below resistance ahead of the FOMC Meeting Minutes but the document didn’t show any clear signs of the Fed wanting to hike more often than already planned and this was mostly perceived as dovish by market participants so the pair showed again rejection at support.


Technical Outlook

It is clear now that 1.0630 support is holding and rejecting the pair higher, so we expect to see a move above 1.0680 and into the 50 period Exponential Moving Average before the mentioned support can be broken. If the confluence zone created by the 50 EMA and 1.0710 doesn’t hold, it would show that the pair is set to climb even further, possibly towards 1.0800 zone of resistance.

Fundamental Outlook

The day lacks major releases, but the most notable one is the ECB Monetary Policy Meeting Accounts, which is a document that reveals details of the latest ECB Meeting and the reasons behind their latest rate decision. The release usually has a medium impact, which can become stronger if hints about a rate change are revealed; the scheduled time is 11:30 am GMT.

GBP/USD

The Pound strengthened due to better than expected Services PMI and The FOMC Meeting Minutes didn’t help the Dollar recover the losses, so the pair had a bullish day, bouncing at support and breaking the 50 period Exponential Moving Average.


Technical Outlook

Considering that the sellers tried several times to break 1.2420 support zone but the pair bounced higher, we expect to see a move into 1.2550 in the near future. For now price is in a consolidation phase and neither side in in clear control from a longer term perspective but for the short term it looks like the bulls are winning the battle. As long as price remains above the 50 period Exponential Moving Average, our bias is bullish, expecting an extended move north.

Fundamental Outlook

The main price driver today will be the technical aspect, mainly because the currencies in the pair will not be affected by important releases.

FOREX NEWS: NON-FARM PAYROLLS – THE CATALYST FOR STRONG BREAKOUTS

EUR/USD

Forex News: The pair just completed another lacklustre day, without any major releases and with price trapped between support and resistance, bouncing almost perfectly between them.


Technical Outlook

Once the pair entered the channel between 1.0680 resistance and 10630 support, it marked the beginning of a ranging period that will be over only after a strong break of either one of the barriers. The 50 period Exponential Moving Average is still above price and angled downwards, so the overall bias is still bearish but considering the sideways movement seen over the last couple of days, our short term bias is neutral. It must be noted that after periods of inactivity and ranging movement, the pair tends to move strongly in one direction.

Fundamental Outlook

The U.S. Non-Farm Payrolls are today’s highlight and also an indicator that will probably take the pair out of the range seen this week. The report is released at 12:30 pm GMT and shows changes in the total number of employed people, apart from the farming industry; it is widely considered the most important U.S. jobs data and usually strengthens the US Dollar if it shows a reading above expectations. Today’s forecast is a change of 174K, lower than the previous 235K.

GBP/USD

Yesterday for the entire trading session the pair remained close to the 50 period Exponential Moving Average, which is now almost flat, indicating a lack of determination from either side.


Technical Outlook

On the chart above we can see the pair is trapped inside a triangle pattern, which will probably decide the next direction and until price moves out of it, we can expect so see more of the same choppy movement. The resistance zone located at 1.2480 – 1.2500 is also a strong barrier, while support is located at 1.2420 and for a true breakout we need to see these levels broken decisively. Important data comes out today so the pair is likely to show a strong breakout.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing Production is released, showing changes in the total value of goods produced by the manufacturing sector. A higher change than the forecast 0.3% indicates increased economic activity and usually strengthens the Pound. Of course, the pair will be directly affected by the U.S. employment data.

FOREX NEWS: WEAK NFP MOSTLY IGNORED, US DOLLAR ON THE ATTACK

EUR/USD

Forex News: The U.S. Non-Farm Payrolls released Friday showed a disappointing number of only 98K new jobs and this initially weakened the US Dollar but very soon after, the pair reversed and started to move south. The Dollar was affected by a U.S. missile attack on Syria and this may be one of the reasons for the weird behaviour seen Friday.


Technical Outlook

After the initial spike up, the pair broke 1.0630 support, and exited the horizontal channel it was trapped in for the most part of last week. However, the USD had a surprising reaction to a worse than expected NFP and this makes the next move uncertain because we may see a delayed effect and thus a move up for the pair. The Relative Strength Index and the Stochastic have entered oversold territory and this increases the chance of a move up, possibly into 1.0630.

Fundamental Outlook

At 8:10 pm GMT Fed Chair Yellen will speak at the University of Michigan but the impact is hard to anticipate, mostly because of the late hour, when volatility is usually low. Nonetheless, the event should be treated with caution.


GBP/USD

The pair exited the triangle pattern even before the release of the Non-Farm Payrolls and continued lower after the report came out, so Friday’s entire trading session was bearish, a fact that could indicate that the pair will continue on a downward path.


Technical Outlook

Last week ended with the pair just below 1.2385 support after a break of the triangle pattern seen on the chart above. Today we expect to see a small pullback after reaching 1.2350 support, considering the oversold condition indicated by the Relative Strength Index and Stochastic, but after this correction we believe that 1.2350 will be broken and the pair will continue lower. On the other hand, we may see a slow, ranging session considering the lack of major economic releases.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases for today, so direction will be mostly affected by the technical side.

FOREX NEWS: BULLISH PRESSURE MOUNTS AHEAD OF BRITISH INFLATION DATA

EUR/USD

Forex News: Yesterday’s trading session was mostly controlled by the bulls after the pair formed a bottom at 1.0570. No major economic indicators were released and this partly contributed to the relatively low volatility.


Technical Outlook

We are currently seeing the beginning of a retracement started at 1.0570 and signalled earlier by the oversold condition of the Relative Strength Index and Stochastic. This bullish correction may extend into the resistance at 1.0630 but it must be noted that the pair is in a medium term downtrend so we cannot exclude the possibility of a drop into 1.0525 even before price retraces higher. A confirmed break of 1.0570 will make 1.0525 the first target but our view for today is bullish, expecting the said correction.

Fundamental Outlook

Today’s most notable release is the German ZEW Economic Sentiment, which is a survey widely respected because it is based on the opinions of about 275 German professional investors and analysts, who are well informed about economic conditions due to the nature of their jobs. The time of the release is 9:00 am GMT, the forecast is 13.2 (previous 12.8) and usually a higher number shows optimism and triggers Euro strength.

GBP/USD

After dipping below 1.2385 for a short while, the pair started climbing and is now testing the previous support which may turn into resistance. Bullish pressure is starting to mount but for now this is just a retracement from a short term perspective.


Technical Outlook

The oscillators are moving higher after reaching oversold and the pair is testing 1.2420 resistance, approaching the 50 period Exponential Moving Average. If the current level is broken, we expect to see an encounter with the 50 EMA, where a bounce lower is very likely to occur. As long as price remains below the down trend line seen on the chart above, our view is bearish.

Fundamental Outlook

At 8:30 am GMT the Pound will be affected by the release of the British Consumer Price Index, which is the main gauge of inflation and can have a strong impact on the currency. Higher than anticipated numbers usually strengthen the Pound but the reaction is mild if the actual number matches analysts’ forecast. Today’s forecast is a change of 2.2%, compared to the previous 2.3%.

FOREX NEWS: MORE THAN A RETRACEMENT? US DOLLAR WAVERS AGAINST COUNTERPARTS

EUR/USD

Forex News: The German ZEW Economic Sentiment survey posted a reading of 19.5, much better than the anticipated 13.2, so yesterday’s session mostly belonged to the bulls but resistance wasn’t yet threatened.


Technical Outlook

Currently the pair is in a retracement that will probably extend into the resistance located at 1.0630 and into the 50 period Exponential Moving Average. The way price will react when (and if) it reaches that zone, will offer clues about the next move: if it will show difficulties breaking the zone, then the retracement up will probably end and we will see another test of 1.0570. On the other hand, an easy break will make 1.0680 the next destination. Our view is slightly bearish after a touch of the 50 EMA.

Fundamental Outlook

The Euro and US Dollar will not be affected today by major economic releases, so the technical aspect will be the deciding factor for direction.

GBP/USD

British inflation improved as shown by yesterday’s CPI release (actual change 2.3%, expected 2.2%) and this was one of the reasons for the climb above the 50 period Exponential Moving Average and for the break of the bearish trend line.


Technical Outlook

The break above the 50 EMA and above the bearish trend line shows that the current move is more than a simple retracement, so it’s very likely to see an extended climb, possibly into 1.2550. It must be noted that at the time of writing the resistance zone around 1.2480 is still holding so we may see a small bounce lower before the level is broken. Also, if the pair reaches 1.2550 it will probably retrace on the way there, meaning that is will not shoot up in a straight line.

Fundamental Outlook

At 8:30 am GMT the Pound will be affected by the release of the British Claimant Count, an indicator that shows changes in the total number of persons who asked for unemployment related social help. A higher number signals decreased economic activity and usually weakens the Pound but the impact is often mild. Today’s forecast is a change of -10.2K, while the previous was -11.3K.

FOREX NEWS: VOLATILITY DIMS, PAIRS SHOW MIXED TRADING SIGNALS AHEAD OF U.S. PRODUCER PRICE DATA AND CONSUMER SENTIMENT SURVEY

EUR/USD

Forex News: After bouncing perfectly at 1.0630 resistance, the pair remained in a relatively tight range and moved almost sideways for the remainder of yesterday’s trading session. The pair is still below the 50 EMA and the bias remains slightly bearish.


Technical Outlook

As long as the pair is trading below 1.0630 resistance and below the 50 period Exponential Moving Average, we anticipate a drop through 1.0570 support and an encounter with 1.0525. Once and if the two resistance elements are broken, we expect to see a move into 1.0680. However, it must be noted that at the moment control doesn’t clearly belong to either side and the pair seems to be drifting without a strong bias.

Fundamental Outlook

The US Dollar will be influenced today by two indicators with a potentially high impact: the Producer Price Index and the University of Michigan Consumer Sentiment. The first indicator shows changes in the price charged by producers for their goods and has inflationary implications because a higher producer price will eventually generate a higher consumer price. The release is scheduled at 12:30 pm GMT and the expected change is 0.0% (previous 0.3%).

The Consumer Sentiment survey comes out at 2:00 pm GMT and offers insights into the opinions of 500 consumers regarding current and future economic conditions. The expected value is 97.1 and numbers above it show optimism, usually creating USD strength.

GBP/USD

The British Claimant Count released yesterday showed that a higher number of individuals asked for unemployment related benefits but another report released at the same time showed that average earnings have increased. This was perceived as bullish for the Pound and outweighed the unemployment data.


Technical Outlook

The pair broke 1.2480 and remained above it, so now we anticipate a move into 1.2550 in the near future. It is very possible to see a correction lower once the Relative Strength Index enters overbought territory, but this move will be probably rejected by 1.2480, which has already turned into support. If this support will be broken, we expect a move back to the recently broken trend line.

Fundamental Outlook

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