FOREX NEWS: PRESSURE MOUNTS, BREAKOUTS EXPECTED AS FOMC MINUTES GIVE MIXED SIGNALS
EUR/USD
Forex News: Ahead of the FOMC Meeting Minutes the pair started to move to the upside but the document contained mixed signals, with some Fed members seeing a December rate hike still on the table and others suggesting that an increase might bring risks to the economy.
Technical Outlook
Price action at the time of the Minutes’ release was choppy and irregular, mostly because the market had difficulties interpreting the mixed signals given by the document. No substantial advances were made and price is still hovering close to 1.0660, with the Stochastic moving up and exiting oversold, so upside action is a distinct possibility but it all depends on how the market will interpret the Minutes and their impact.
Fundamental Outlook
At 3:00 pm GMT the Philly Fed Manufacturing Index is released, offering insights into the health of the manufacturing sector in the Philadelphia district. The impact varies for each release but usually higher numbers than the forecast 0.1 (previous -4.5) will strengthen the US Dollar.
GBP/USD
For the most part of yesterday the pair continued to move erratically and to reverse all moves. The FOMC Minutes didn’t manage to break the range but some bullish action was seen.
Technical Outlook
The pair is still trading between 1.5200 support and 1.5250 resistance, so even if the latest impulse is bullish, we cannot expect stronger movement until resistance is broken and re-tested from above. If price shows signs of rejection around 1.5250, we expect a bounce that will take it back into 1.5200.
Fundamental Outlook
A high impact indicator is released today: the British Retail Sales. The scheduled time is 9:30 am GMT and the expected change is -0.4%, a huge drop from the previous 1.9%. Sales made at retail levels represent a major part of the entire economic activity so a higher than expected change will likely strengthen the Pound.