FOREX NEWS: DOLLAR BACK IN ACTION, THREATENING KEY SUPPORT
EUR/USD
Forex News: The US Dollar regained control over the Euro during Friday’s trading session on the back of hawkish comments made by New York Fed President Dudley who suggested that positive economic data may trigger a rate hike “relatively soon”.
Technical Outlook
The pair descended below 1.0660 but this cannot be considered a true break until price puts some distance between it and the mentioned level. It has to be noted that on a Daily chart the Relative Strength Index and the Stochastic are both very close to oversold and this situation has been going on for a relatively long while, so we can expect stronger moves to the upside. However, the overall direction is down and bullish moves could be considered good opportunities to sell; the first resistance is the 50 period Exponential Moving Average.
Fundamental Outlook
At 8:00 am GMT the French Flash Manufacturing PMI comes out, expected to show a figure of 50.7 and half an hour later the indicator with the same name but for the German economy is released, with a forecast value of 52.2. These surveys act as leading indicators of economic health and higher numbers usually strengthen the euro.
The Eurogroup Meetings take place today but are closed to the press; some volatility can be created if information about the discussions leaks to journalists. Once the meetings are concluded, a formal statement is released.
GBP/USD
The effects of William Dudley’s comments were better seen on the Pound-Dollar pair as the bears managed to break support Friday and to generate strong downside action.
Technical Outlook
After the almost perfect bounce at 1.5330 resistance, the pair traveled through 1.5250 and 1.5200, heading for the minor support at 1.5155. The oscillators are moving down, with good momentum and without being oversold so we expect the mentioned level to be touched today. As an alternate scenario, we might get a slow day, with price moving above and below 1.5200, without clear direction.
Fundamental Outlook
The British Pound is not affected by major economic announcements but British representatives will participate in the Eurogroup Meetings so volatility may be present.