FOREX NEWS: US DOLLAR AFFECTED BY RETAIL SALES FIGURES, POUND INFLUENCED BY CARNEY’S SPEECH
EUR/USD
The German ZEW survey disappointed drastically by posting a reading of 8.6, while the anticipated number was 18.2 and as a result the Euro lost ground in front of the greenback for almost the entire day.
Technical Outlook
As soon as price came in close vicinity of 1.3330 support, a bullish reaction could be seen and this indicates that price may stall or even reverse at this level. The medium term downtrend is bearish but a new low couldn’t be established since last week and the pair is at a crossroad: a break of 1.3330 will most likely take price into 1.3295 key support while a bounce would suggest that 1.3400 will be revisited.
Fundamental Outlook
The US Retail Sales will be the day’s main event for the pair. Higher values suggest a thriving economy where people are comfortable spending and this fuels further economic activity. The scheduled time of the release is 12:30 pm GMT and the expected change is 0.2%, same as last month; better than anticipated values usually strengthen the US Dollar.
GBP/USD
As expected the Pound bounced higher yesterday, completing a bullish retracement which took price into the first minor resistance. No major economic indicators were released and the move was mostly generated by technical factors.
Technical Outlook
We are faced with a bounce-or-break scenario at the current level of 1.6809 and from a technical point of view a drop would be in order since yesterday’s move was just a correction to the downtrend. A bullish break of the current level will make 1.6885 the next target while a bounce lower will probably take the pair close to the major support at 1.6700.
Fundamental Outlook
Price direction will be heavily influenced today by UK’s Claimant Count Change, an indicator which tracks changes in the number of unemployed people compared to the last month. It will be released at 8:30 am GMT with an anticipated change of -29.7 (previous -36.3) and higher numbers will most likely weaken the Pound. An hour later the BOE will release the Inflation Report and Governor Mark Carney will deliver a speech regarding its contents. This is likely to be the main event of the day for the Pound, depending on the Governor’s attitude and matters discussed.
FOREX NEWS: EURO BACK IN THE SPOTLIGHT FOR THE RELEASE OF THE GERMAN GDP
EUR/USD
Forex News: Yesterday the US Dollar weakened on the back of a disappointing figure shown by the Retail Sales and this allowed the pair to climb above 1.3400 support.
Technical Outlook
As we saw, even if 1.3400 was pierced yesterday, the bulls couldn’t maintain price above this level and this suggests that we might see more of the ranging movement experienced lately. Another encounter with 1.3330 is very possible now that we’ve seen price rejected by resistance. If 1.3330 is broken, the pair is likely to visit 1.3295, while 1.3400 still remains the first resistance.
Fundamental Outlook
The day’s main event will be the release of the German Preliminary Gross Domestic Product which is scheduled for release at 6:00 am GMT and is expected to decrease from the previous 0.8% to -0.1%. The GDP is considered to be an economy’s main performance gauge and since Germany accounts for the major part of Europe’s economy, lower numbers will most likely have a negative impact on the single currency.
GBP/USD
As revealed by the Inflation Report, the Bank of England cut their expectations for economic growth and also, BOE Governor Carney mentioned that interest rates will not be increased in the near future. The pound weakened significantly as a result and major support was touched.
Technical Outlook
The key support level at 1.6700 was touched as the pair traveled substantially lower. This huge drop is likely to continue throughout today but it’s also very possible to see a stall before the level will be clearly broken. The Relative Strength Index has reached oversold territory again and we are likely to see some sort of bullish movement. The next support is located at 1.6550, a level visible on a Daily chart.
Fundamental Outlook
There are no major economic releases scheduled for the Pound today and price action will be influenced mostly by the technical aspect.
FOREX NEWS: BOTH PAIRS BELOW RESISTANCE. RETESTS ANTICIPATED
EUR/USD
Forex News: Germany’s Preliminary Gross Domestic Product showed a lower than expected value, but despite this, the Euro strengthened throughout the day. However, resistance couldn’t be broken and the pair shows signs of indecision.
Technical Outlook
The resistance at 1.3400 was pierced again yesterday but, similar to a day before, price returned almost immediately below the level. This shows underlying bearish pressure and warns about a potential drop below the support located at 1.3300. However, if during the day the bulls manage to close a significant candle above 1.3400, we are likely to see a move in close vicinity of 1.3445.
Fundamental Outlook
French and Italian banks will be closed today, celebrating Assumption Day and no major news comes out for the Euro. The US Dollar will be affected by the Producer Price Index which is released at 12:30 pm GMT and is expected to post a change of 0.1% compared with last month’s 0.4%. The PPI has inflationary implications because a higher price charged by producers will be eventually transmitted to the consumer.
At 1:55 pm GMT the University of Michigan will release the Consumer Sentiment survey based on the opinions of about 500 consumers. The expected figure is 82.7, an increase from the prior 81.8 and higher numbers are usually beneficial for the US Dollar because confidence among consumers is often a leading indicator of consumer spending.
GBP/USD
The pair had a slow trading session but we saw a new low followed by a bullish retracement which didn’t manage to take price above 1.6700.
Technical Outlook
Today we expect a test of the level at 1.6700 and this test will decide whether the pair can continue lower towards 1.6550 or a stronger move north is in order. The Relative Strength Index is coming out of oversold territory and this favors bullish moves but the bears control the market at the moment so all moves to the upside should be considered just corrections.
Fundamental Outlook
United Kingdom’s second estimate of the Gross Domestic Product is released today at 8:30 am GMT. The expected change is 0.8%, same as last month and under normal circumstances, higher numbers benefit the Pound as the GDP is an economy’s main gauge of overall performance.
FOREX NEWS: A LACKLUSTER FUNDAMENTAL SCENE BRINGS A SLOW MONDAY
EUR/USD
United States’ Producer Price Index released Friday posted a value which was anticipated and the event didn’t have a huge impact on the US Dollar. The day lacked major developments and price action was mostly ranging.
Technical Outlook
The pair remained confined between 1.3400 resistance and 1.3330 support but another attempt to break resistance was made; however, this attempt didn’t succeed and the week finished very close to the mentioned level. For the time being, the bulls lack the strength needed to shift the balance in their favor and another encounter with 1.3330 support is a high probability scenario, especially if today resistance is not clearly broken
Fundamental Outlook
The only notable event of the day is the release of the German Bundesbank Monthly Report which usually contains notes about economic conditions and an economic outlook. The release is scheduled at 10:00 am GMT and has a higher impact if the point of view expressed differs from the one of the European Central Bank.
GBP/USD
The second estimate of the British Gross Domestic Product released Friday didn’t surprise in any way and the pair had a slow day, without major direction changes.
Technical Outlook
The pair is trading close to 1.6700, a level which acts like a magnet for price for the time being. For today we anticipate more of the ranging movement experienced Friday but keep in mind that the Relative Strength Index is coming out of oversold territory on a four-hour chart and on a Daily chart it still shows an oversold condition. This favors bullish action for the day and increases the chances of a move above 1.6700.
Fundamental Outlook
The United Kingdom didn’t schedule any high-impact releases for the day, thus price direction will be mostly influenced by the technical aspect.
EUR/USD
Forex News: The Euro had a tough first day of the week against the Dollar and we saw the pair travel south after a slow start of the session; however, major support is still intact.
Technical Outlook
It is clearer now that 1.3400 resistance cannot be broken for the time being and that 1.3330 support is the next target of the pair. We can see several four-hour candles with long upper wicks, a fact that indicates rejection and on top of that, once price started to move south, it did so with strong momentum (full bearish candles). The day’s direction will be also affected by the fundamental scene which becomes busier today.
Fundamental Outlook
An important inflation gauge is released today by the United States: the Consumer Price index. This indicator tracks changes in the price paid by consumers for the goods they purchase and basically shows the buying power of the US Dollar. The event is scheduled at 12:30 pm GMT and a drop is anticipated, from the previous 0.3% to 0.1%; if this comes true, the greenback will most likely weaken against its counterparts.
GBP/USD
The week opened with a gap to the upside, a fact generated by a Sunday Times interview with Mark Carney who reignited speculation of a rate hike.
Technical Outlook
More often than not, weekly gaps tend to be filled, thus another move below 1.6700 might be in order. However, the time factor is not known, meaning that even if the gap will be closed, we cannot know when this is going to happen. For the time being, 1.6700 is not clearly broken and at least a touch of this level will probably occur today.
Fundamental Outlook
United Kingdom’s Consumer Price Index will also be released today, at 8:30 am GMT. Inflation in the UK is close to BOE’s targeted range but the indicator is important nonetheless because it is taken into consideration when the interest rate decision is made. Today’s expected change is 1.8% while last month’s was 1.9% and lower numbers usually weaken the Pound.
FOREX NEWS: US DOLLAR AND POUND PRONE TO SHARP MOVES. MEETING MINUTES HOLD CENTER STAGE
EUR/USD
Forex News: Positive data released yesterday by the American economy allowed the US Dollar to continue to gain ground against its counterparts and yesterday we saw a clear break of support.
Technical Outlook
The recent break of 1.3330 support is likely a true one but before price can travel south, we need to see a retest of the recently broken level. Adding to this short term bullish view is the oversold condition signaled by the Relative Strength Index on the four hour chart above. If the retest results in a bounce lower, the first target is represented by 1.3295 key level.
Fundamental Outlook
The main event of the day will be the release of FOMC’s Meeting Minutes which will offer insights into the reasons which affected their latest decision regarding the interest rate and will possibly contain hints about future monetary policy direction. The release is scheduled at 6:00 pm GMT and a high impact is anticipated.
GBP/USD
United Kingdom’s Consumer Price Index posted a surprising drop and as a result the Pound weakened substantially against the greenback, taking the pair below support.
Technical Outlook
Similar to the EUR/USD, we anticipate a bullish retracement before the downside momentum will resume; however, the control clearly belongs to the bears so any moves north should be considered simple pullbacks for the time being. The Relative Strength Index is below 30 again, favoring short term retracements into the first potential resistance located around 1.6660.
Fundamental Outlook
The Bank of England will release today at 8:30 am GMT the details of their latest votes on interest rate and Asset Purchase Facility. If all 9 members voted to keep the rate unchanged, it could mean that an increase will not be seen in the immediate future. If the members’ opinions start to diverge, the release will have a higher impact that usual. The FOMC Meeting Minutes will also have a direct impact on the pair’s movement.
FOREX NEWS: THE US DOLLAR CAPITALIZES ON A HAWKISH FED ATTITUDE
EUR/USD
The pair continued to slide lower during the day, before the FOMC Minutes which further strengthened the US Dollar as the Fed showed optimism regarding the job market and inflation.
Technical Outlook
We saw a new low of the year reached by the pair and for the time being the bears are dominating the market. The key support at 1.3295 was clearly broken and if price returns to it for a retest and successfully bounces lower, we might see a touch of 1.3200 in the near future. Keep in mind that the Relative Strength Index is deep in oversold territory, a fact which favors a touch from below of 1.3295.
Fundamental Outlook
The French Manufacturing PMI is released early at 7:00 am GMT and expected to climb slightly from 47.8 to 47.9. It will be followed half an hour later by the German indicator with the same name, which is expected to drop from the previous 52.4 to 51.7. Both are leading indicators of economic health for two of the most important countries in the Euro Zone and higher numbers are usually beneficial for the Euro.
The Philly Fed Manufacturing survey will be announced at 2:00 pm GMT and a hefty drop is anticipated, from the previous 23.9 to 19.7. The survey is based on the opinions of purchasing managers from the manufacturing sector and usually, its importance is increased if the actual numbers differ a lot from the anticipated ones.
GBP/USD
Bank of England’s Minutes released yesterday showed that 2 out of 9 members voted for a rate increase, a fact which boosted the Pound higher but the hawkish attitude of the FOMC Meeting Minutes allowed the pair to move lower.
Technical Outlook
The zone around 1.6660 is now confirmed resistance since yesterday we saw clear rejection off that level and the Dollar run might extend into the support located at 1.6550. A lot depends on the Retail Sales numbers and the technical aspect will be somewhat secondary.
Fundamental Outlook
United Kingdom’s Retail Sales numbers come out today at 8:30 am GMT with a positive change expected, from the previous 0.1% to 0.4%. Such an increase will further strengthen the Pound as sales made at a retail level represent the major part of economic activity.
FOREX NEWS: THE SECOND DAY OF THE JACKSON HOLE SYMPOSIUM BRINGS US TWO IMPORTANT SPEECHES
EUR/USD
Forex News: Yesterday’s trading session was mostly controlled by the bulls although Philadelphia Manufacturing data was better than anticipated, a fact which would normally benefit the US Dollar. However, major levels were not threatened.
Technical Outlook
The current bullish move is likely to continue until 1.3295 is touched. The next potential turning point is 1.3330 but this move is considered just a retracement to the downtrend which was overextended and in need of a breather. The low at 1.3240 will act as potential support if the downtrend resumes and the next key level is located at 1.3200.
Fundamental Outlook
Today is the second day of the Jackson Hole Symposium and probably the most important one because both Fed Chairwoman Janet Yellen and ECB President Mario Draghi will deliver speeches at the Federal Reserve Bank of Kansas City. Yellen’s speech is scheduled at 2:00 pm GMT while Draghi’s will follow at 6:30 pm GMT; the main topic for both speeches will be the labor market, which is always a delicate subject that can strongly influence the market so caution is recommended.
GBP/USD
The pair ranged for almost the entire day, with a slightly bullish bias despite the fact that Retail Sales dropped during the previous month.
Technical Outlook
There is still room for the pair to move to the upside as no major resistance is near current price, but on the other hand, 1.6550 support is very close and it will most likely act as a magnet for price. A lot depends on Janet Yellen’s speech, which will probably influence heavily the US Dollar.
Technical Outlook
The United Kingdom didn’t schedule any major news releases for the day and market participants will focus on the two important speeches mentioned above.
FOREX NEWS: THE POUND EXPERIENCES IRREGULAR VOLATILITY AS UK BANKS ARE CLOSED
EUR/USD
Forex News: During her speech at the Jackson Hole Symposium, Fed Chairwoman Janet Yellen mentioned improvements in the US labor market and suggested that the economy is healing while ECB President Mario Draghi signaled that the European economy is still not back on track.
Technical Outlook
The comments of the two bankers generated a sharp drop for the pair, after an almost perfect bounce off of 1.3295 level which was previous support, now turned resistance. The first lower target and support is located at 1.3200 but at the moment the pair is diverging from the Relative Strength Index as we can notice a lower low printed by price and a higher low made by the indicator. This is known as regular divergence and in this case is indicative of a potential bullish retracement. However, two important economic indicators come out today and price movement will be affected by their readings.
Fundamental Outlook
The first release of the day is the German IFO Business Climate, a confidence survey derived from the opinions of about 7,000 businesses. This large sample makes the survey a well respected one and increases its importance. The release is scheduled at 8:00 am GMT and the anticipated number is 107.1, a small decrease from the previous 108.
At 2:00 pm GMT the US New Home Sales numbers come out, with an anticipated change to 426K from the previous 406K. Better than expected numbers usually strengthen the US Dollar as they indicate that consumers are confident in economic conditions and they can afford a house.
GBP/USD
The pair was also affected by Yellen’s comments but not as much as the EUR/USD and overall we had a slow Friday, with mostly ranging price action.
Technical Outlook
We expect the pair to touch the level at 1.6550 today but we don’t anticipate a lot of movement as banks in the United Kingdom will be closed, celebrating Summer Bank Holiday. The first level of interest to the upside is 1.6600 but we might experience irregular volatility and low liquidity, making price action hard to predict.
Fundamental Outlook
As mentioned above, banks in the United Kingdom will be closed and no economic indicators will be released today but the pair will be affected by the US New Home Sales release.
FOREX NEWS: DOWNTREND’S “FATE” RESTS ON AMERICAN CONFIDENCE INDICATORS
EUR/USD
Forex News: The indicators released yesterday for both the European and American economies posted worse than expected values but not much action was seen and the pair ranged almost the entire day.
Technical Outlook
The week opened with a gap to the downside and more often than not, these gaps tend to be filled (price climbs to the point where the gap originated) so we might see a move into 1.3220. The regular divergence is still present as price is showing a lower low while the Relative Price Index is making higher lows and we have an oversold condition of the pair. These factors, combined with the strength of 1.3200 support will probably generate a bullish day.
Fundamental Outlook
The Dollar will be affected today by the release of the Durable Goods Orders, scheduled at 12:30 pm GMT and expected to increase substantially from last month’s 1.7% to 7.4%. An increased number of such orders shows that producers will have to speed up their activity to fill those orders and also that consumers are confident enough to buy long lasting goods.
At 2:00 pm GMT the US Consumer Confidence is released, showing the state of the public opinion regarding current and future economic conditions. Increased or high confidence is a leading indicator of consumer spending because usually people tend to spend more when they are confident about their economic situation. The anticipated value is 89.1 while the previous was 90.9.
GBP/USD
Despite the fact that banks in the United Kingdom were closed yesterday, the Pound managed to retrace higher after a failed break of 1.6550 support.
Technical Outlook
The week opened with a downside gap which was quickly filled after a bounce off of 1.6550 support zone but 1.6600 resistance stopped the upwards momentum. A stronger bullish move is still anticipated but if today the pair cannot break decisively the level at 1.6600, the downtrend might resume. The first lower barrier is of course 1.6550.
Fundamental Outlook
The British Bankers’ Association will announce today at 8:30 am GMT the Mortgage Approvals numbers. Lately the house market has been closely watched by the Bank of England and Mortgage Approvals are in close relation with house purchases because usually a mortgage is often used for such a purchase. More mortgages suggest that people are willing to buy houses and that loans can be obtained, facts which are beneficial for the British economy and hence for the Pound. Today’s expected number is 44.2K, a small increase from the previous 43.3.
FOREX NEWS: MARKET IN CONSOLIDATION PHASE. BREAKOUTS EXPECTED
EUR/USD
Forex News: The Durable Goods Orders showed a much better than anticipated value yesterday but the Core version of the same indicator, which excludes transportation items, posted a surprising drop and all this generated mostly sideways price action.
Technical Outlook
The bullish divergence is still present and the level at 1.3200 seems strong as the pair couldn’t break it decisively. On top of that, the weekly gap is still not closed so bullish moves are still expected but yesterday’s price action doesn’t offer a lot of hints about future direction so for the time being we are neutral on the pair, expecting a break of the consolidation pattern created around 1.3200.
Fundamental Outlook
The day ahead is very slow in terms of economic releases and the only notable indicator is the GFK German Consumer Climate scheduled at 6:00 am GMT. Its value is expected to drop slightly from the precious 9.0 to 8.9 and better than expected figures are usually beneficial for the Euro but the indicator tends to have a mild impact on the market.
GBP/USD
The British Bankers’ Association Mortgage Approvals were fewer than anticipated but the figure didn’t differ much from analysts’ expectations and it didn’t create a huge impact as a result.
Technical Outlook
The bulls failed to take price above 1.6600 minor resistance but on the other hand, the bears didn’t succeed to break 1.6550 and this shows that indecision is currently governing the pair. These two levels will be important for today’s price action and a break of either one will probably generate an extended move in that direction. A conservative approach would be to expect the retest after the initial break occurs.
Fundamental Outlook
The United Kingdom didn’t schedule any economic indicator releases for the day, thus price direction will be mainly influenced by the technical aspect.
FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP – CATALYSTS FOR A BREAKOUT
EUR/USD
Forex News: The Euro managed to recover yesterday from an almost one-year low on the back of comments made by German finance minister who said that Mario Draghi’s latest speech was “over-interpreted”. This spurred interest for the single currency and took the pair into 1.3200 resistance.\
Technical Outlook
Yesterday we saw a bearish break of 1.3200 support zone but developments during the day took price back into the mentioned zone for a retest. After a breakout, a retest of the recently broken level is common and usually, this retest shows if the break is sustainable or if it was just a fake. The bullish divergence is still present and the weekly gap is still not closed, so if price moves above 1.3200, we might see it climb at least until the gap is closed.
Fundamental Outlook
The German Consumer Price Index is released today at 12:00 pm GMT and analysts expect it to remain unchanged at 0.8%. German inflation contributes to overall Euro Zone inflation and lately it has been one of ECB’s major concerns; the Euro would benefit from higher values of the German CPI.
The United States will announce their Preliminary Gross Domestic Product today at 12:30 pm GMT and a minor decrease from 4.0% to 3.9% is expected. Since the GDP is an economy’s main performance gauge, better than expected values have the potential to strengthen the currency.
GBP/USD
The pair failed to break out of the tight range and instead bounced between support and resistance for the entire day as no major news affected either of the two currencies.
Technical Outlook
For today, a breakout is a high probability scenario but the direction will probably be determined by the US Gross Domestic Product. Yesterday we saw that price touched 1.6550 support and immediately moved up to test 1.6600 but failed to break this level as well. This shows indecision and the fact that price needs some sort of catalyst which will generate a break of either one of the levels mentioned.
Fundamental Outlook
The United Kingdom didn’t schedule any important news for today thus market participants will focus on the American events which are likely to trigger strong moves.
FOREX NEWS: EUROPEAN INFLATION DATA LIKELY TO PUT AN END TO THE CONSOLIDATION PHASE
EUR/USD
Forex News: German inflation stalled, just as analysts expected but the American Gross Domestic Product showed a surprising increase, spurring demand for the greenback and taking the pair below 1.3200 support.
Technical Outlook
The move above 1.3200 couldn’t be sustained by the bulls and price soon dropped below the level but the weekly gap is still not closed so we might see further upside movement. For the time being price is confined between 1.3150 and 1.3220, without clear direction, thus market participants will probably focus on the fundamental aspect which will most likely dictate the next direction.
Fundamental Outlook
Today the main gauge of European inflation is released: the Euro Zone Consumer Price Index. For quite a long time inflation has been lower than ECB’s target of just below 2.0% and if it continues to drop we are likely to see more stimulus added by the ECB, a thing considered bearish for the Euro. Today’s anticipated change is 0.3% while last month’s value was 0.4% and the time of the release is 9:00 am GMT.
GBP/USD
Surprisingly, the positive change of the American Gross Domestic Product didn’t do much for the pair and the US Dollar couldn’t gain substantially against the Pound.
Technical Outlook
A breakout is still anticipated but for the time being price movement is still caped by 1.6600 resistance and 1.6550 support. The Relative Strength Index is moving close to the 50 level and doesn’t show an extreme condition of the market, thus it doesn’t offer a lot of hints about the next move and we maintain our view that a clear breakout, followed by a retest of the broken level, will generate an extended move in that direction.
Fundamental Outlook
The Nationwide Building Society will announce today the change in the selling price of UK homes purchased with mortgages provided by this Society. The indicator acts as a measure of house market inflation and it’s a leading gauge of health for the housing industry. The release is scheduled at 6:00 am GMT, with an anticipated change of 0.0% while the previous was 0.1%; higher values usually strengthen the Pound, driving the pair higher.
FOREX NEWS: IRREGULAR VOLATILITY DUE TO AMERICAN BANK HOLIDAY. POUND AFFECTED BY MANUFACTURING DATA
EUR/USD
Forex News: Friday’s main event was the release of the Euro Zone CPI which slowed down from 0.4% to 0.3%, just how analysts anticipated. The drop weakened the Euro and the pair finished the week with the bears in control.
Technical Outlook
Now that price surpassed 1.3150, we anticipate a move closer to 1.3100 after a potential retest of the recently broken level. However, the pair has been on an extended move to the south and the Relative Strength Index is oversold on a Daily chart, signaling that bullish pullbacks are a probable scenario. If this is the case, the first major barrier is 1.3200 which has now turned into resistance.
Fundamental Outlook
American banks will be closed today due to Labor Day and no economic indicators are scheduled for release today. As a result, the New York session might suffer from low liquidity and irregular movement. There are no major European releases either, so we may experience slow and ranging price action during the day.
GBP/USD
The Pound had another slow day Friday and no special developments took place. Price remained confined in a tight range and the anticipated breakout didn’t occur.
Technical Outlook
The resistance at 1.6600 and the support at 1.6550 managed to contain price for longer than anticipated and this was mostly due to the lack of major economic releases last week. Today the probability of a breakout is greatly increased but the direction depends mostly on the manufacturing data released by the United Kingdom.
Fundamental Outlook
At 8:30 am GMT the British Manufacturing PMI is released. The indicator is a measure of optimism among purchasing managers from the manufacturing sector and also acts as a leading indicator of economic health. The expected value is 55.1 and a higher number is usually beneficial for the Pound.
FOREX NEWS: PRICE ACTION AFFECTED BY PURCHASING MANAGERS’ INDEXES
EUR/USD
Forex News: The Euro climbed yesterday, moving towards 1.3150 but price action lacked momentum as no major economic news came out and the market suffered from low volatility due to the fact that US banks were closed.
Technical Outlook
The bears slowed down their momentum but the downtrend is intact and a touch of 1.3150 is expected before we can see more downside movement. If 1.3150 is surpassed, the next resistance is located at 1.3200 but we might experience slow and ranging movement until the ECB meets this week. The first level of interest to the south is 1.3100.
Fundamental Outlook
The main event of the day will be the release of the American Manufacturing PMI scheduled at 2:00 pm GMT. This is a survey of about 400 purchasing managers from the manufacturing sector who are asked to rate economic and business conditions; the anticipated value is 57.0 and higher numbers usually strengthen the greenback as they suggest that optimism among purchasing managers is increasing.
GBP/USD
The Pound strengthened earlier in the day but the disappointing value of the British Manufacturing PMI stopped further bullish advances and erased some of the Pound’s gains.
Technical Outlook
The current bullish move can be considered just a retracement in a rather strong downtrend so we expect downside movement and another close encounter with 1.6550 support. The Relative Strength Index is approaching the overbought level for the first time in a long while and bearish divergence is present, a fact which favors another move south. If the pair continues upwards, it will encounter the first resistance at 1.6700.
Fundamental Outlook
AT 8:30 am GMT the British Construction PMI is released and anticipated to drop from last month’s 62.4 to 61.5. Since this is a measure of optimism among purchasing managers from the construction sector, it acts as a leading indicator of economic health and higher than anticipated numbers are beneficial for the Pound. As always, the US events will directly affect the pair as well.
FOREX NEWS: DOWNTREND RESUMED, MAJOR SUPPORT AHEAD
EUR/USD
Forex News: Speculation that the Fed will raise interest rates sooner than anticipated boosted the US Dollar and allowed it to climb versus its main counterparts. This affected our pair as well, but the impact was not tremendous and major support was not touched.
Technical Outlook
If 1.3100 support is touched, we expect bullish pullbacks into 1.3150 – 1.3200 resistance. On a Daily chart the trend has been moving straight down for an extended period and the Relative Strength Index is deep in oversold territory. These factors call for a “breather” in the form of a retracement north but the pair’s direction may be affected by the economic indicators that are released today.
Fundamental Outlook
The European Retail Sales numbers come out at 9:00 am GMT and a negative change is expected from the previous 0.4% to -0.3%. Although Retail Sales are usually a high impact indicator, this release is likely to have a muted impact because Germany and France have already released their consumer spending indicators, but higher than anticipated numbers will most likely add some strength to the Euro.
GBP/USD
The Pound weakened drastically against the US Dollar as a survey showed increased support for Scotland’s independence which will be decided through a referendum later this month. The release of the British Construction PMI was mostly overlooked by market participants.
Technical Outlook
Now that 1.6550 is clearly broken, the first support and target for the pair is located at 1.6460. The downtrend is resumed and the ranging period is hopefully over but we might see moves close to 1.6550 before 1.6460 is touched. If such a scenario occurs and 1.6550 will turn into resistance, the chances of a touch of 1.6460 will increase.
Fundamental Outlook
The UK Services PMI is released today at 8:30 am GMT and it’s expected to drop from last month’s 59.1 to 58.6, a fact which would be detrimental for the Pound. The indicator is a measure of optimism among purchasing managers from the British Services sector and also acts as a leading indicator of economic health.
FOREX NEWS: INTEREST RATES AND AN EARLY LOOK INTO AMERICAN EMPLOYMENT LEVELS SET THE STAGE FOR A WILD DAY
EUR/USD
Forex News: A cease-fire agreement between Russia and Ukraine strengthened the single currency and triggered a move up. Market participants overlooked the disappointing value of the European Retail Sales and the pair experienced a bullish day.
Technical Outlook
From a purely technical point of view, a bounce off of the current level at 1.3150 is very likely. If this bounce occurs, the next destination is 1.3100 support, but Mario Draghi’s speech and the ECB interest rate decision will decide the day’s direction and the technical aspect will be secondary.
Fundamental Outlook
At 11:45 am GMT the ECB will make public their decision regarding the interest rate which is not expected to change from the current 0.15%. A Press Conference will follow at 12:30 pm GMT and during this conference the highest volatility of the day will probably be seen. There has been a lot of talk about additional measures adopted by the ECB to stimulate economic growth and during the press conference ECB President Mario Draghi will probably answer questions on the matter. His attitude will be closely watched by market participants and will trigger sharp moves.
A privately owned company will release an early version of the US Non Farm Employment Change at 12:15 pm GMT. This data tries to mimic the government issued indicator which is released Friday and usually has a hefty impact on the market. The anticipated number is 216K and higher values usually strengthen the US Dollar but Friday’s indicator normally has a higher impact.
GBP/USD
The pair retraced higher yesterday with the help of a better than expected value of the Services PMI but bears regained control later in the day and a new low was printed.
Technical Outlook
The pair reached the important support located at 1.6460 but now it shows clear signs of slowing down. We can see multiple candles which suggest indecision and the Relative Strength Index reached oversold territory. This makes it harder for the bears to push the pair further down and increases the chances of bullish retracements but price action will be influenced by the fundamental aspect.
Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the interest rate but no change is expected (currently 0.50%). Because a Statement is issued only in the case of a rate change, today we will probably not have any information about the reasons that stood behind the rate decision and this diminishes the impact of the event. However, surprises can happen and we recommend caution if trading at the time. The US events will have a direct impact on the pair’s movement throughout the day.
FOREX NEWS: ECB SURPRISES THE MARKET WITH ANOTHER RATE CUT. FOCUS SHIFTS ON NON FARM PAYROLLS
EUR/USD
Forex News: The ECB unexpectedly decided to cut the interest rate to 0.05% (previously 0.15%) and Mario Draghi announced that a form of Quantitative Easing will be introduced in order to stimulate the economy. He also mentioned that other measures might be implemented if needed.
Technical Outlook
The surprise offered by the ECB drastically weakened the Euro and the effect was a massive drop of almost 200 pips. The selloff broke 1.3100 and brought the pair into the psychological support at 1.3000, solidifying the control of the bears and renewing the downtrend. Today’s direction will be heavily affected by the US Non Farm Payrolls but strictly from a technical point of view, we expect a small bounce followed by a trend continuation.
Fundamental Outlook
The day’s main event will be the release of the Non Farm Payrolls which is scheduled at 12:30 pm GMT; the expected number is 226K, an increase from last month’s 209K. Higher numbers show that more jobs were created and usually this strengthens the greenback because employment is closely correlated with consumer spending which in turn is a major part of the economy. The NFP release is known to be a huge market mover thus caution is recommended if trading at the time.
GBP/USD
The Bank of England left the rate unchanged and the event didn’t have a huge impact on the pair’s movement but US Dollar strength generated a clear break of 1.6460 support.
Technical Outlook
The downtrend is resumed and 1.6460 is clearly broken. This level will probably turn into resistance and will reject any bullish moves that may come close to it. The first major support is now located at 1.6250 (visible on a Daily chart) and the Relative Strength Index continues to move in oversold territory, a fact which favors moves to the north in the form of small retracements. The day’s direction will be heavily influenced by the American NFP release which will overshadow the technical side.
Fundamental Outlook
The United Kingdom doesn’t release major economic indicators today and all eyes will be turned towards the American employment report.
FOREX NEWS: THE CALM AFTER THE STORM. THE MARKET SLOWS DOWN
EUR/USD
Forex News: Friday’s price action was heavily influenced by the worse than expected value posted by the American Non Farm Payrolls, a fact which allowed the pair to climb. However, the Euro bulls weren’t strong enough to sustain the move and some of the gains were erased.
Technical Outlook
The last two days of last week were heavily influenced by the fundamental environment and the moves generated were huge. Such movement is often followed by sideways price action and we believe the pair will range between the low at 1.2920 and the potential resistance at 1.3000. Usually Mondays are slow days unless major news comes out and today the schedule is pretty light.
Fundamental Outlook
The only noteworthy indicator released today is the German Trade Balance which shows the difference in value between imported and exported goods. The expected figure is 17.3B compared with last month’s 16.2B and higher numbers will most likely strengthen the Euro but the indicator has a mild impact on price action unless surprising values are posted. The time of the release is 6:00 am GMT.
GBP/USD
Similar to the Euro, the Pound briefly gained on the back of the worse than expected value of the US employment report but overall Friday was slow compared to the previous days.
Technical Outlook
First major support is located at 1.6250 and will probably attract price like a magnet since it is very close and it is considered a key level for medium term price action. The first lower barrier is represented by Friday’s low located at 1.6280 which is considered minor support. We expect a rather slow day based on the fact that no important economic or financial indicators are released.
Fundamental Outlook
As mentioned above, the fundamental scene is calm and price action will be governed by the technical aspect.
FOREX NEWS: THE POUND DROPS AS SCOTTISH INDEPENDENCE BECOMES A DISTINCT POSSIBILITY
EUR/USD
Forex News: The German Trade Balance showed improved numbers but overall the day lacked strong movement and the pair traded inside a 30 pip range for almost the entire duration of the day.
Technical Outlook
The day ahead is likely to be characterized by ranging movement, similar to the one experienced yesterday. The pair is capped to the downside by the low located at 1.2920 and we might see another attempt to break it but the Relative Strength Index is making its way up, coming from oversold territory and this suggests that price may revisit the zone around 1.3000 as a stronger bullish retracement is still anticipated. However, keep in mind that control belongs to the bears and a break of the low can easily occur.
Fundamental Outlook
The French Trade Balance is announced at 6:45 am GMT. The indicator shows the difference in value between imported and exported goods but it is known to have a mild impact on price action. The expected value is -5.0B while the previous was -5.4B and higher numbers are usually beneficial for the Euro.
GBP/USD
A poll regarding a potential separation of Scotland from the United Kingdom showed that for the first time the number of people who are pro-independence exceeded the number of people who still want to be a part of the United Kingdom.
Technical Outlook
The poll result triggered a massive downside gap which made the pair open below the key level at 1.6250. A potential separation of Scotland from the United Kingdom will severely damage the Pound and until the 18th of September (the day when Scottish people will express their view through a referendum), we are likely to see irregular and hard to predict price action. For now the first minor support is located at 1.6100 while potential resistance sits in the 1.6250 zone.
Fundamental Outlook
At 8:30 am GMT, Bank of England Governor Mark Carney will deliver a speech in Liverpool. Considering the latest developments, this speech is likely to have a higher impact than usual but it all depends on his attitude and matters discussed. At the same time the British Manufacturing Production change is announced and the expected value is 0.3%, same as last month. Because Manufacturing is an important part of the entire British Industrial Production, today’s release is considered a high-impact one and higher values will most likely strengthen the Pound.
At 2:00 pm GMT an unofficial estimate of the British Gross Domestic Product is released. This estimated value is calculated using statistical projection techniques and has an impact similar to the one of the official release. The previous estimate was 0.6% and higher numbers will most likely strengthen the Pound.
