FOREX NEWS: SUPPORT SHATTERED AS THE ECB REVEALS QE VALUE
EUR/USD
Forex News: The ECB announced that combined asset purchases will total a 60 billion EUR/month until at least September 2016. The event created mixed market reaction at first but soon after the pair started to drop and support was tested.
Technical Outlook
The support at 1.1460 was breached during yesterday’s drop and Euro weakness will probably generate further downside movement after a re-test of the mentioned level. The Relative Strength Index moved below 30, indicating that a retracement is due; however, an oversold condition of the RSI doesn’t mean that price will retrace with certainty. For now the picture remains bearish and the pair seems headed towards new lows.
Fundamental Outlook
The French Manufacturing PMI is released today at 8:00 am GMT, followed half an hour later by the German indicator with the same name. French PMI is expected to show a value of 48.1, while the forecast for the German indicator is 51.8; these indicators are gauges of economic health, focused on the Manufacturing sector and better than anticipated values could strengthen the Euro.
GBP/USD
The Pound-Dollar had mixed movement yesterday as the effect of the ECB decision extended to this pair as well. Resistance was touched before the bears finally took control of the pair and broke support.
Technical Outlook
In the recent past the pair moved several times below 1.5100 but returned above it almost immediately so a re-test would be in order before this break can be considered a valid one. The pair’s next target is 1.5035, followed by 1.5000 and the bias is bearish but bullish moves are not out of the question, depending on the economic data released today by the United Kingdom.
Fundamental Outlook
The British Retail Sales are released at 9:30 am GMT and are expected to change -0.6% while last month’s value was 1.6%. Such a drop would suggest that the economy is starting to slow down and the Pound will be negatively affected.
FOREX NEWS: NEW DOWNSIDE TARGETS AS THE DOWNTREND IS IN FULL SWING
EUR/USD
Forex News: Friday the pair continued to drop sharply as the effect of the ECB stimulus decision remained in full swing. New multi year lows were reached and the bears made significant advances.
Technical Outlook
Price action seen during the last day of the week created minor resistance at 1.1290; the new low at 1.1114 will most likely act as minor support. The bias is bearish without a doubt and we expect another encounter with 1.1114 but this doesn’t exclude another test of minor resistance, considering the fact that the pair traveled down more than 500 pips in just two days and the move might need a stronger bullish pullback.
Fundamental Outlook
At 9:00 am GMT the German IFO Business Climate survey is released, showing the opinions of about 7,000 businesses about current economic conditions in Germany as well as a 6-month outlook. The expected figure is 106.7 and higher numbers can strengthen the Euro, driving the pair higher.
GBP/USD
The Pound posted losses against the US Dollar during the first part of Friday but these were erased later in the day. However, the pair couldn’t return above resistance and bounced lower again.
Technical Outlook
The bounce at 1.5035 resistance shows that further downside movement can be expected and that we will probably see another encounter with Friday’s low located at 1.4950. A strong move above 1.5035 and above the 50 period Exponential Moving Average would suggest that the downtrend is weakened and might push price into the resistance located at 1.5100.
Fundamental Outlook
The British Bankers’ Association will reveal the number of new mortgages approved for house purchases. A higher figure suggests increased activity in the house market sector and can have a positive impact on the Pound. The event is scheduled at 9:30 am GMT and the expected figure is 36.6K.
FOREX NEWS: U.S. CONSUMER CONFIDENCE AND BRITISH GDP TO DECIDE THE DAY’S BIAS
EUR/USD
Forex News: The German IFO Business Climate survey posted a figure that met analysts’ expectations and the event went mostly unnoticed by market participants. Most of yesterday was controlled by the bulls as price retraced higher.
Technical Outlook
The pair bounced at support and continued upwards until short term resistance at 1.1290 was touched. The bias remains negative overall as a clear downtrend is still in place. The level at 1.1290, together with the 50 period Exponential Moving Average will create a confluence zone which will be tough to break to the upside so this can be a good place where downside movement can resume. The overbought condition of the Stochastic also increases the chances of bearish movement.
Fundamental Outlook
The U.S. Durable Gods Orders come out at 1:30 pm GMT, with an expected change of 0.6%, while last month this indicator posted a value of -0.9%. Values that exceed expectations are usually beneficial for the US Dollar. The second important event of the day is the release of the U.S. Consumer Confidence survey, scheduled at 3:00 pm GMT. The survey is derived from the opinions of about 5,000 households regarding current and future economic situation and usually acts as a leading indicator of consumer spending. The expected figure is 95.7, an increase from last month’s 92.6.
GBP/USD
The Pound gained against the greenback yesterday as a Bank of England official said that an interest rate hike might come sooner than investors anticipate.
Technical Outlook
The pair moved above 1.5035 and above the 50 period Exponential Moving Average, making the short term bias bullish. The resistance at 1.5100 is the next place where sellers might step in and drive price lower and if this level coincides with an overbought condition of the Relative Strength Index, the chances of bearish movement will increase.
Fundamental Outlook
The release of the BBA Mortgage Approvals was rescheduled for today at 9:30 am GMT (initially scheduled yesterday at the same time). The expected figure is 36.6K and numbers above that could add more steam to the Pound. However, the event might be overshadowed by the release of the Prelim Gross Domestic Product scheduled at the same time and expected to show a value of 0.6% compared with last month’s 0.7%. Since this is the main gauge of an economy’s overall performance, lower numbers can weaken the Pound, driving the pair lower.
FOREX NEWS: U.S. DOLLAR WEAKENED AHEAD OF THE FED MEETINGS
EUR/USD
Forex News: The pair climbed yesterday as the US Dollar weakened partially due to the worse than expected value of the Durable Goods Orders. Minor resistance was broken, making the short term bias bullish.
Technical Outlook
After moving above the 50 period Exponential Moving Average and re-testing it from above, price headed towards 1.1460 resistance . If this level will be reached, we expect some bearish price action to take place, especially if the Relative Strength Index and the Stochastic will show overbought conditions. If a bounce occurs, the 50 period EMA will offer support and a break of this line would bring price back into 1.1290.
Fundamental Outlook
The day’s main event is the U.S. Federal Funds Rate and the FOMC Rate Statement that accompanies it. The scheduled time is 7:00 pm GMT and although the rate is not expected to change (<0.25%), strong volatility will most likely be present, depending on the contents of the Statement, so caution is recommended.
GBP/USD
The Pound registered another strong bullish day against the greenback, although the British GDP somewhat disappointed. Resistance was broken after a brief bounce and the bulls dominate short term price action.
Technical Outlook
Price broke 1.5100 decisively and moved above 1.5200 resistance but for the time being the level cannot be considered broken. The Relative Strength Index has reached overbought territory and this makes us believe that the break of resistance experienced yesterday will not generate additional bullish movement or at least not before a move down occurs, which will clear the mentioned overbought condition. Support will be provided by the 50 period Exponential Moving Average and by the bullish trend line seen on the picture.
Fundamental Outlook
The United Kingdom didn’t schedule important news releases for today so we expect price action to be driven by the US events mentioned earlier and by the technical aspect.
FOREX NEWS: GERMAN INFLATION IN THE SPOTLIGHT, TECHNICAL SIDE SECONDARY
EUR/USD
Forex News: The pair had a slow day ahead of the FOMC Statement release and surprisingly, price action remained that way once the document came out. Volatility was just briefly present as the Fed kept the rate unchanged and announced they will use patience before modifying it.
Technical Outlook
Price moved sideways for the most part of yesterday and neither support nor resistance was broken, but the pair is still in a downtrend so we favor bearish movement today. The first barrier is located at 1.1290 but if this support will hold, we anticipate a move into 1.1460 resistance. A lot will depend on the German inflation indicator released today and we consider this will decide price direction for the rest of the day.
Fundamental Outlook
Germany’s Consumer Price Index is released today at 1:00 pm GMT and expected decrease -0.8% while last month’s value was 0.0%. The CPI is the main gauge of inflation and such a drop would weaken the Euro since Germany’s economy is of crucial importance for the entire Euro Zone and the ECB is struggling to bring inflation levels higher.
GBP/USD
Price traveled once again above 1.5200 but failed to move away before the Fed event. Once the Statement was released not much has happened and resistance couldn’t be broken.
Technical Outlook
The failed attempt to break 1.5200 resistance makes us believe that moves lower will follow. If this is true, the first support will be offered by the bullish trend line combined with the 50 period Exponential Moving Average, followed by 1.5100. The Relative Strength Index is moving downwards and this increases the chances of bearish price action.
Fundamental Outlook
Today the United Kingdom didn’t schedule any major economic or financial releases and price direction will be mainly influenced by technical factors.
FOREX NEWS: AMERICAN GDP COULD BRING THE SELLERS IN CONTROL ONCE AGAIN
EUR/USD
Forex News: Although German inflation figures disappointed yesterday by showing a change of -1.0%, the Euro climbed during the first part of the day but overall we had a slow trading session, with some bearish movement in the second part.
Technical Outlook
We continue to favor the short side and we anticipate a break of 1.1290 to the downside. Both the Stochastic and the Relative Strength Index on an hourly chart are starting to curve downwards, agreeing with our bias. The next important support is located around 1.1114, but this price is not likely to be reached today unless surprising developments occur.
Fundamental Outlook
The Euro Zone Consumer Price Index is announced at 10:00 am GMT; the forecast is a change of -0.5% while the previous was -0.2% and such a drop would further weaken the Euro. The U.S. Advance Gross Domestic Product, which is the main gauge of U.S. economic performance, will be announced at 1:30 pm GMT. The expected change is 3.0% and any value above this will be beneficial for the greenback.
GBP/USD
The Pound weakened substantially against the US Dollar yesterday and the bears managed to break the uptrend line and to pierce 1.5035 support.
Technical Outlook
The support at 1.5035 was pierced but is not clearly broken and the Relative Strength Index is oversold. These two facts make us believe that price will pull back higher before breaking support decisively. If support is broken while the Relative Strength index is oversold, price will probably return to re-test the level from below, a fact which may clear the oversold condition.
Fundamental Outlook
The Net Lending to Individuals is the only notable event coming out of the United Kingdom today. The scheduled time is 9:30 am GMT and the expected value is 3.2B; higher figures suggest that people feel comfortable spending money and this indicates that consumer spending will probably increase in the near future. All this would have a positive effect on the Pound and would take the pair higher but the event usually produces just medium impact.
FOREX NEWS: CHOPPY PRICE ACTION AHEAD OF BRITISH AND AMERICAN MANUFACTURING DATA
EUR/USD
Forex News : European inflation data that came out Friday was worse than expected but the American Gross Domestic Product also disappointed and this contributed to the day’s slow movement.
Technical Outlook
The support at 1.1290 was pierced but we cannot consider it broken until a re-test from below occurs. The Relative Strength Index is moving in the middle of the range, without clear direction but the Stochastic is crossing upwards, coming out of oversold area and this suggests that we might see bullish price action; however, a clear break of 1.1290 would put the sellers back in control.
Fundamental Outlook
The Spanish Unemployment numbers come out at 8:00 am GMT, with an expected change of -32.4K compared with last month’s -64.4K. Lower numbers show that less people are unemployed and this is usually beneficial for the Euro.
At 3:00 pm GMT the U.S. Manufacturing PMI is released, showing the opinions of purchasing managers about current and future economic conditions in the manufacturing sector. Higher values than the anticipated 54.9 are usually beneficial for the US Dollar and take the pair lower.
GBP/USD
Trading was mixed Friday for the Pound-Dollar pair and we saw a quick reversal after what appeared to be a good break of short term support.
Technical Outlook
Price is still confined between 1.5100 resistance and 1.5035 support and action is likely to be unclear until either one of these levels is broken. The break will have increased chances to generate additional movement in that direction if it is followed by a re-test and a bounce. However, the direction will be mainly influenced by the economic indicators released today.
Fundamental Outlook
The British Manufacturing Purchasing Managers’ Index comes out at 9:30 am GMT with an expected value of 52.9. Manufacturing is an important part of the British economy and usually higher values strengthen the Pound.
FOREX NEWS: PRICE CONFINED IN TIGHT RANGES. BREAKOUTS EXPECTED
EUR/USD
Forex News: American Manufacturing data disappointed yesterday and the US Dollar lost its appeal. The pair climbed but price action was choppy for most of the day. The release of the Spanish Unemployment numbers was rescheduled for today.
Technical Outlook
The 50 period Exponential Moving Average is flat and price is confined in a very tight range, being caped to the downside by 1.1290 support and by 1.1365 to the upside. Lately 1.1365 acts as short term resistance and we anticipate a bounce lower, with the first target being 1.1290. However, price is just moving sideways and this kind of movement doesn’t offer enough hints about immediate direction. Since the main downtrend is intact, we have a bearish bias.
Fundamental Outlook
At 8:00 am GMT the Spanish Unemployment numbers are released and expected to show a change of 83.4K compared with last month’s -64.4. Initially the release was scheduled for yesterday and the forecast value was also a lot different. This might not affect the indicator’s impact but use caution nonetheless.
GBP/USD
The pair showed some sharp reversals yesterday, especially on the lower time frames. British Manufacturing data came out close to analysts’ expectations and this added to the choppy movement.
Technical Outlook
Price came very close to 1.5100 resistance before reversing and moving below 1.5035 support. Although this support is not decisively broken, the short term bias is bearish because the pair bounced at resistance and is trading below the 50 period Exponential Moving Average. If price doesn’t move above 1.5035, the first target is represented by 1.4950.
Fundamental Outlook
The British Construction PMI is released at 9:30 am GMT; the anticipated value is 56.9 (57.6 previous) and higher numbers will probably strengthen the Pound as this survey is derived from the opinions of purchasing managers regarding the current and future business conditions and acts as a leading indicator of economic health.
FOREX NEWS: THE WEEK’S FIRST U.S. JOBS-RELATED DATA DECIDES SHORT TERM BIAS
EUR/USD
Forex News: The pair broke resistance yesterday and continued to rally without any particular fundamental reason. Spanish Unemployment claims came out better than expected but the event didn’t play a major role in yesterday’s price action.
Technical Outlook
The recent rally broke 1.1365 short term resistance and took price in close vicinity of 1.1460, shifting momentum towards the bulls. However, the move is not backed by strong fundamentals and both the Relative Strength Index and the Stochastic have reached overbought territory. These things make us believe that the recent bullish move will not extend much further. A clear break of 1.1460 followed by a successful re-test could mean that price is set for new advances north.
Fundamental Outlook
At 1:15 pm GMT, Automatic Data Processing Inc., a privately owned company will release their version of the U.S. Non Farm Payrolls. The indicator shows how many new jobs were created during the previous month and often offers hints about the Government data which will be released two days later. The impact can be quite strong, especially if the numbers differ from analysts’ expectations. Higher values than the anticipated 224K usually strengthen the US Dollar.
GBP/USD
The US Dollar weakened against the British Pound as well and the pair moved comfortably above 1.5100 resistance. The British Construction PMI showed a higher number but the release was not the cause of the rally.
Technical Outlook
Recent price action created short term support around 1.4990. We consider 1.4990 support because as we saw yesterday the pair rallied strongly after bouncing off of this level. Now that 1.5100 was broken, the bulls are likely to take price into 1.5200 resistance but keep in mind that the Relative Strength Index has entered overbought territory on an hourly chart and this might hinder future advances to the north. A touch of 1.5100 from above is very probable.
Fundamental Outlook
The British Services Purchasing Managers’ Index is released today at 9:30 am GMT. This survey acts as a leading indicator of economic health and higher numbers than the anticipated 56.6 can strengthen the Pound but the indicator is not known to be a strong market mover and the U.S. jobs data will probably have a stronger impact.
FOREX NEWS: BUYERS’ GAINS IN PERIL UNLESS RESISTANCE GIVES WAY SOON
EUR/USD
Forex News: After moving above resistance yesterday, the pair took a dip on the back of a stronger US Dollar. The ADP Non Farm Employment numbers showed that fewer jobs were created than analysts’ expected but the effect wasn’t substantial.
Technical Outlook
The fact that price moved back below 1.1460 shows that the bulls are not yet ready to reverse the main downtrend. If the pair can move below the 50 period Exponential Moving Average, we anticipate a descent into the support located at 1.1365. To the upside, 1.1460 still remains resistance and the chances of a break will increase if price will bounce at the 50 period EMA.
Fundamental Outlook
The day’s most important U.S. indicator is the Trade Balance which shows the difference between imported and exported goods. A number below zero means that imports exceed exports and a lower than anticipated number is usually detrimental for the US Dollar. Today’s forecast is -38.0B and the scheduled time is 1:30 pm GMT.
GBP/USD
British Services PMI came out with a better than expected value, a fact which helped the Pound and took the pair above 1.5200 resistance.
Technical Outlook
Although yesterday price action was bullish, rejection was seen in the second part of the day. The Relative Strength Index is still trading close to its 70 level, indicating an overbought condition which will increase the chances of a move below 1.5200. Immediate resistance is located at 1.5260 but the current move up seems exhausted and a break is less likely to occur.
Fundamental Outlook
Price direction will be affected today by the Bank of England decision regarding the interest rate. A change is not expected from the current 0.50% but often just speculation and rumors about a rate change can trigger strong movement so caution is recommended. The scheduled release time is 12:00 pm GMT.
FOREX NEWS: US NON FARM PAYROLLS STEAL THE HEADLINES AGAIN
EUR/USD
Forex News: The first part of yesterday’s trading session was controlled by the sellers who managed to take price below 1.1365. Later in the day a disappointing value of the U.S. Trade Balance weakened the US Dollar and allowed the pair to climb.
Technical Outlook
The resistance at 1.1460 managed to stop yesterday’s rally and this might suggest that price is about to turn to the downside. However, all moves are quickly reversed lately and the picture is unclear; we slightly favor bearish moves but we acknowledge the fact that today’s price direction will be heavily influenced by the U.S. Non Farm Payrolls. The levels to watch are 1.1460 as resistance and 1.1290 as support.
Fundamental Outlook
Without a doubt the most important event of the day is the release of the US Non Farm Employment Change scheduled at 1:30pm GMT. The indicator shows how many new jobs were created during the previous month and is widely considered the most important employment related data for the United States. Levels of employment and consumer spending are closely tied together because people with jobs spend more than unemployed ones, so a higher than anticipated number for today’s release will most likely strengthen the greenback. The forecast is 236K while the previous value was 252K.
GBP/USD
As anticipated the Bank of England kept the interest rate unchanged at 0.50% and the event didn’t have a strong impact but US Dollar weakness generated a break of resistance, putting the bulls in short term control.
Technical Outlook
Yesterday’s rally paused at 1.5315, turning this level into minor resistance. The gap seen a few weeks back happened around this level as well and this adds to the possibility of it becoming resistance, but its strength is not yet tested. The Relative Strength Index is close to overbought, increasing the chances of bearish moves but price direction today will be directly correlated with the US employment data. If 1.5315 is broken, the next resistance is located at 1.5540; first potential support sits at 1.5260.
Fundamental Outlook
Since the United Kingdom didn’t schedule high impact data releases, the day’s market mover will be the US Non Farm Payrolls.
FOREX NEWS: G20 MEETINGS BRING TOGETHER THE WORLD’S KEY PEOPLE. CURRENCIES REACT
EUR/USD
Forex News: Friday all eyes were focused on the U.S. employment numbers. The NFP release showed that more jobs were created than analysts expected and this strengthened the US Dollar, taking the pair close to support.
Technical Outlook
The latest momentum belongs to the bears and the long term trend is down so today we expect further movement south. First minor support is located at 1.1300 but both the Relative Strength Index and the Stochastic are oversold on an hourly chart so we anticipate small moves to the upside before support can be broken decisively. The 50 period Exponential Moving Average will offer the first form of resistance.
Fundamental Outlook
The G20 (Group of 20) Meetings take place today, attended by central bankers and finance ministers from the member states. The meetings are closed to the press but an official statement will be released at the end of the event. Sometimes participants talk to journalists during the day and this can generate volatility on the currency market.
GBP/USD
The better than expected figure for the US Non Farm Payrolls and the US Dollar strength generated took the pair lower Friday, after an initial move above minor resistance.
Technical Outlook
Positive U.S. data combined with an overbought condition of the Relative Strength Index triggered a move below 1.5260. Lately the bulls have made good advances but the overall trend is bearish so today we might see price move into the 50 period Exponential Moving Average. Our bias is slightly bearish, but we anticipate a climb before price can move south.
Fundamental Outlook
The G20 meetings will be the day’s main event as the United Kingdom doesn’t release any major economic or financial indicator.
I think EUR/USD still has more room going up than dropping down. At 1.1275, the next target looks likely at 1.1340 and I believe 1.1500 is still possible within the next few weeks. The jobs data has certainly re-enforced the USD and it is going to be like a tag-of-war for the EUR/USD on the way up. But with the G20 taking place today, I expect something positive going in the way of the Euro Zone, especially after the recently announced QE.
FOREX NEWS: BRITISH MANUFACTURING DATA AND ESTIMATED GDP DECIDE POUND DIRECTION
EUR/USD
Forex News: The pair had a pretty calm trading session yesterday, with price oscillating between support and resistance. The G20 meetings did not generate substantial moves.
Technical Outlook
Price action was confined between 1.1270 support and 1.1360 resistance and it seems like the pair is under bearish pressure. Today we expect a break of 1.1270 minor support and a move towards 1.1100 area. However, if price moves above 1.1360 and above the 50 period Exponential Moving Average, we expect the bulls to continue higher but we don’t believe 1.1500 will be threatened unless surprise developments take place.
Fundamental Outlook
The day lacks major releases for both the Euro and the US Dollar but the second day of the G20 meetings could generate sudden moves.
GBP/USD
Price action yesterday was mostly bearish and price touched both support and resistance, without managing to break either of them.
Technical Outlook
As long as the pair remains below the 50 period Exponential Moving Average, our short term bias is bearish in anticipation of a break of 1.5200 support. Although we favor the short side, a break of 1.5260 would most likely take the pair into 1.5315 minor resistance. During the day watch for overbought/oversold conditions of the RSI as the pair is not in a strong trend and this increases the chances of reversals after an extreme reading (above 70/below 30).
Fundamental Outlook
The British Manufacturing Production numbers come out today at 9:30 am GMT. The indicator tracks changes in the total output generated by the manufacturing sector and values above the forecast 0.3% usually strengthen the Pound. Later in the day, at 3:00 pm GMT the NIESR GDP Estimate comes out. The previous value was 0.6% and numbers above it are normally beneficial for the Pound because this estimate is usually very accurate.
For some reason, I think the EUR could gain some ground against the USD some time in the near future. I think it is only a matter of time before everyone comes to their senses with regard to the US economic growth and the prospect of raising interest rates. The global economy can not be a one man show and I think the USD has rallied too much to realistically illustrate the strength of the US economy.
FOREX NEWS: GEOPOLITICAL TURMOIL AS KEY PERSONALITIES ARE MEETING TO DISCUSS GREECE AND UKRAINE CRISES
EUR/USD
Forex News: The pair had another slow day and remained confined between support and resistance after another failed attempt to break out. No major indicators were released and this contributed to the choppy price action.
Technical Outlook
A breakout is highly probable today but the direction is hard to predict considering this week’s slow movement. The levels to watch are 1.1270 as support and 1.1360 as resistance; if these are broken the pair will travel towards 1.1500 or 1.1100, depending on the initial breakout direction. Geopolitical factors will play a crucial role and the technical side will be secondary.
Fundamental Outlook
The leaders of France, Germany, Russia and Ukraine will meet today in an attempt to put an end to the Ukrainian conflict. The outcome of the negotiations can have major implications on the currency market thus caution is highly recommended. The ECOFIN Meetings also take place today and the highlight will be the negotiation for the Greek debt issue. So far a conclusion hasn’t been reached and a new deal for Greece hasn’t been struck but if today we see some new developments, the Euro is likely to react swiftly.
GBP/USD
The Pound had a slow day as well and is now struggling to break resistance after a bounce at support. The GDP estimate was released 25 minutes earlier than initially scheduled but the event didn’t create a lot of movement and the same goes for manufacturing data.
Technical Outlook
Price bounced twice at 1.5200 support and is now sitting above the 50 period Exponential Moving Average on both an hourly and a four-hour chart. This puts short term bias in favor of the bulls but 1.5260 resistance is still not broken so we might very well see a rebound lower. A breakout is highly probable, with the first bullish target located at 1.5315. A break of 1.5200 support will open the door for 1.5100.
Fundamental Outlook
The ECOFIN Meetings will be the day’s highlight but the United Kingdom didn’t schedule other major news releases.
FOREX NEWS: A STRONG BREAKOUT IS LOOMING. BRITISH INFLATION REPORT AHEAD
EUR/USD
Forex News: The pair remained inside the range yesterday as the current geopolitical situation still remains tense and no decisive action was taken.
Technical Outlook
Our view on the pair remains neutral, in anticipation of a breakout which is long overdue. The direction of this breakout will be decided by any new developments coming from Greece and Ukraine. The levels to watch are 1.1270 as support and 1.1360 resistance and considering that price is trading below the 50 period Exponential Moving Average on an hourly and four-hour chart, we slightly favor the short side.
Fundamental Outlook
U.S. Retail Sales are released at 1:30 pm GMT and expected to post a change of -0.3% compared with last month’s -0.9%. Sales made at retail levels represent a major part of overall economic activity and that’s why values that exceed expectations are usually beneficial for the US Dollar. The indicator is considered high-impact so we might get a breakout after its release.
GBP/USD
The Pound-Dollar moved stronger yesterday but we saw a sharp whipsaw once 1.5300 resistance was touched and this made trading rather difficult on the lower time frames.
Technical Outlook
What appeared to be a very strong break of 1.5260 resistance soon turned out to be just a single move which was quickly reversed at 1.5300 resistance. If the bears can keep price below 1.5260, it would mean that 1.5200 will be the next immediate target. Inflation-related data and Mark Carney’s press conference will probably decide the next short term price direction.
Fundamental Outlook
At 10:30 am GMT the Bank of England will release the Inflation Report which contains an outlook on economic performance and inflation for the next 2 years. Bank of England Governor Mark Carney will hold a press conference at the same time, discussing the contents of the Report and we recommend caution if trading during the conference because inflation is always a sensible issue and sharp moves may be present.
I think no one really expected any impact news from the meeting yesterday, that could cause a significant shift in EUR/USD. As far as the Euro is concerned, a lot has already been priced in, and I do not think whichever decision comes out on Greece situation would signify a quick fix to the Greek economy. Thus the EUR will likely continue to struggle based on these grounds. However, from the point of view of the USD, we will have to wait and see how investors react to interest rate hike, and the economy overall. For me this will determine how long the EUR could continue to struggle against the USD, or its chances of recovery. But for now, Shorts have the better opportunity.
FOREX NEWS: BROKEN RESISTANCE OPENS THE DOOR FOR FURTHER ADVANCES
EUR/USD
Forex News: The pair finally broke out of the tight range, mostly due to a disappointing U.S. Retail Sales report which showed a -0.8% change compared with the expected -0.4%.
Technical Outlook
Although 1.1360 resistance is broken, price is likely to return in that area for a re-test, considering the overbought condition showed by the Relative Strength Index on an hourly chart. If the touch will result in a bounce higher, the next target is located at 1.1500 but a return below 1.1360 would indicate that the ranging period is still not over and will open the door for a move back into 1.1270 zone.
Fundamental Outlook
The German Gross Domestic Product is scheduled for release at 7:00 am GMT and an increase is anticipated from the previous 0.1% to 0.3%. This would strengthen the Euro since the German economy is of major importance to the entire Euro zone and the GDP is an economy’s main performance gauge.
Later in the day, at 3:00 pm GMT the University of Michigan will release a Consumer Sentiment survey which is expected to show a value of 98.2, almost unchanged from last month’s 98.1. Higher values are usually beneficial for the US Dollar as consumer sentiment is tightly correlated to consumer spending.
GBP/USD
Mark Carney’s speech together with the Inflation Report generated Pound strength although the event contained some mixed – even contradictory – signals regarding inflation and a potential rate cut.
Technical Outlook
The Relative Strength Index moved well above the 70 level, signaling an overbought condition of price. This means that we might see bearish retracements which will most likely find support near 1.5340 zone, followed by 1.5300. The next important resistance is located around 1.5540 but we don’t expect such a move unless surprising developments take place.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases thus price direction will be decided by technical factors and by the U.S Consumer Sentiment.
