Technical News | Daily

[GDMFX]

FOREX NEWS: BEARS PUSH THE PACE AS THE US DOLLAR BOUNCES BACK

EUR/USD

Forex News: The Euro acted erratically yesterday during Mario Draghi’s press conference, strengthening while he was speaking and suffering a sharp selloff afterwards. Currently the pair is trading again below 1.1335.

Technical Outlook

The large spike created by yesterday’s price action shows rejection and also that once again the balance of power favours the bears. Today we expect the pair to make its way towards 1.1210, with the first barrier being 1.1250. If the direction is going to change again, 1.1335 is the first upside barrier and if that is surpassed, we don’t expect 1.1400 to be broken. The oscillators don’t show an extreme reading, thus they don’t offer clear clues about future movement.

Fundamental Outlook

The German Flash Manufacturing PMI is released today at 7:30 am GMT. The indicator shows the opinions of purchasing managers from the German Manufacturing sector about business and economic conditions in said sector and usually higher numbers have a positive impact on the Euro but often the extent is limited. The forecast is 51.0, previous 50.7. Also today the Eurogroup and ECOFIN Meetings start, attended by finance ministers and key personalities from the EU member states.

GBP/USD

Mark Carney’s speech didn’t create a huge buzz but the US Dollar strengthened and drove the pair below 1.4350 yesterday, after a short-lived climb above resistance. Overall price action was choppy and difficult to trade.

Technical Outlook

The pair has shown clear rejection around 1.4420 resistance and now 1.4350 is breached to the downside. Also, the oscillators show good bearish momentum and we expect all this to generate a stronger move south, probably very close to the 50 period Exponential Moving Average. A quick move above 1.4350 would indicate a period of stagnation and most likely sideways movement, trapped between 1.4420 and 1.4350.

Fundamental Outlook

The Pound will not be affected by major economic announcements but the Eurogroup and ECOFIN Meetings will probably create volatility, depending on the matters discussed.

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

[GDMFX]

FOREX NEWS: GERMAN BUSINESS CLIMATE, U.S. HOME SALES TO DECIDE TODAY’S PRICE DIRECTION

EUR/USD

Forex News: Friday the bearish movement continued as the greenback strengthened against the Euro and managed to drive the pair below 1.1250. This marks an important victory for the bears and makes us anticipate a short term downtrend.

Technical Outlook

By breaking 1.1250 to the downside, price now created a lower low; also we have a lower high (price bounced at 1.1400 while previously it had bounced at 1.1450) and this is a characteristic of a downtrend. We expect price to move below 1.1210, en route to 1.1150 support but we note the oversold position of the Stochastic (also the Relative Strength Index is just touching its oversold level) and this means that today we may see bullish pullbacks. If this is the case, we expect bearish movement to resume at 1.1250 or at the 50 period EMA.

Fundamental Outlook

Early at 8:00 am GMT the German IFO Business Climate survey comes out, expected to show a value of 107.1 (previous 106.7). Its importance comes from its large sample of about 7,000 businesses that are asked to give their assessment on current economic conditions as well as a 6 month outlook. Higher numbers usually strengthen the Euro but the extent is sometimes limited.

Later in the day, at 2:00 pm GMT the U.S. New Home Sales numbers come out, offering insights into the health of the U.S. house market. The forecast is 521K (annualized number) and a higher value is beneficial for the US Dollar but the indicator is known to have medium impact on the greenback.

GBP/USD

Friday the Pound spiked higher but the bulls couldn’t sustain the move and the pair is trading again below minor resistance. Overall both sides lack determination and a clear trend is not in place.

Technical Outlook

The resistance at 1.4420, although breached several times, is still rejecting price lower, creating long candle wicks. This is a sign of future moves lower but, as mentioned before, neither side is in control. The oscillators don’t show an extreme condition, thus don’t do much for predicting the future move. From a short term perspective, the pair is making higher highs and higher lows (uptrend) so we expect a touch of 1.4460 if the bulls can take price back above 1.4420.

Fundamental Outlook

The Pound’s direction will me mostly affected by the technical aspect because the United Kingdom didn’t schedule major economic news releases for today.

[GDMFX]

FOREX NEWS: BULLS THREATEN RESISTANCE. TIME FOR A RESURGENCE OF THE UPTREND?

EUR/USD

Forex News: The pair slowly climbed above 1.1250 yesterday, completing a bullish retracement in response to the latest drop. The German IFO Business Climate survey showed a lower number than analysts had predicted but the difference wasn’t substantial, thus the pair did not have a strong reaction.

Technical Outlook

The bullish pullback seen yesterday was generated in part by the oversold condition of the oscillators but once this condition is cleared, we expect the pair to continue lower, breaking 1.1210. Note that the Stochastic is crossing upwards, coming out of oversold and this favours an extended move to the upside; if this is the case, we don’t expect the pair to move above the 50 period Exponential Moving Average but if it does so, it could mean that the bulls are preparing to take back control.

Fundamental Outlook

The first key economic indicator of the day is the U.S. Durable Goods Orders, scheduled for release at 12:30 pm GMT and expected to show a change of 1.9% compared to last month’s -3.0%. The indicator tracks changes in the total value of orders placed for goods with a life expectancy of more than 3 years and usually a higher value brings along US Dollar strength.

Later in the day, at 2:00 pm GMT a U.S. Consumer Confidence survey is released; it acts as a leading indicator of consumer spending and under normal circumstances, higher values than the forecast 95.8, are beneficial to the greenback.

GBP/USD

The Pound bulls scored another victory yesterday, managing to break immediate resistance and threatening 1.4510. Later in the day however, some of the gains were erased.

Technical Outlook

The resistance at 1.4510 was tested yesterday but so far it’s proving too tough to break and on top of that, both oscillators are touching their respective overbought levels, making us anticipate bearish price action today. The first two barriers that need to be broken are 1.4460 and 1.4420 but these are also two levels where price can bounce higher, for another attempt to break 1.4500 zone. If price does not bounce higher here, we expect to see a touch of the 50 period Exponential Moving Average during the days to come.

Fundamental Outlook

There are no major events on the fundamental schedule for the Pound today so we expect the technical aspect to be the main market mover. Of course, the two U.S. indicators will also have a direct impact on the pair.

[GDMFX]

FOREX NEWS: HEADS UP FOR THE FED RATE. VOLATILITY ALMOST GUARANTEED

EUR/USD

Forex News: Following a disappointing value shown by the U.S. Durable Goods Orders (actual 0.8%, forecast 1.9%), the US Dollar weakened and thus the pair climbed into resistance. The Consumer Confidence survey also showed a worse than expected value, further contributing to the greenback’s losses.

Technical Outlook

The two oscillators are showing good upward momentum, without being overbought and the pair has moved above the 50 period Exponential Moving Average so the bias right now is bullish. However, 1.1335 can act as a strong resistance and if price has difficulties breaking it, we expect to see a bounce lower, probably into 1.1250 territory again. Keep in mind that today the US Dollar will be heavily affected by the Fed rate decision so the technical aspect will be somewhat secondary.

Fundamental Outlook

At 6:00 pm GMT the Fed will announce their interest rate decision (no change expected; currently <0.50%), alongside a FOMC Statement that will contain insights into the reasons that generated the rate verdict and possibly, hints about future changes. Almost every time the rate is announced, the US Dollar reacts strongly, even if no change is posted, so we expect it to do the same this time and also we recommend caution at the time of release.

GBP/USD

The worse than expected U.S. economic data showed its effects against the Pound as well and the pair had a strong bullish day yesterday, climbing decisively above resistance.

Technical Outlook

Although the bulls scored another important victory yesterday by breaking above 1.4565, we expect the pair to start to move lower. There is a strong resistance zone between 1.4650 and 1.4670 and we don’t believe the buyers still have enough gas in the tank to break it. Also, both the Stochastic and Relative Strength Index are clearly overbought now and this calls for a retracement that may find support around 1.4565. Of course, this scenario can be foiled by the key economic data released today.

Fundamental Outlook

At 8:30 am GMT the British Preliminary Gross Domestic Product is released and this can have a strong impact on the Pound, partly because the GDP is an economy’s main gauge of performance and partly because the Preliminary version is considered the most important out of the three (Preliminary, Second Estimate and Final). The expected change is 0.4% (previous 0.6%) and higher values are beneficial for the currency. Keep an eye on the Fed events as these will have a direct impact on the pair.

[GDMFX]

FOREX NEWS: CHANCES FOR A JUNE RATE HIKE BECOME SLIMMER. THE US DOLLAR SUFFERS THE CONSEQUENCES

EUR/USD

Forex News: The Fed did not modify rates yesterday, as expected but the statement was mostly dovish and the US Dollar behaved erratically at the time of release. Apparently a June rate hike is off the table and this was one of the main reasons for the spike seen at the time of release.

Technical Outlook

Yesterday’s price action was generated by the Fed dovish statement but no serious technical advances were made. The pair is in indecision mode, trapped between 1.1335 resistance and 1.1250 support; currently price is above the 50 period Exponential Moving Average but the line is flat and doesn’t do much to predict future movement. That being said, the next move is uncertain and our bias is neutral until the market decides how to interpret Fed’s position. If 1.1335 is broken, we expect a move into 1.1400 and if the pair moves below the 50 EMA, we anticipate a touch of 1.1250.

Fundamental Outlook

Today at 12:00 pm GMT we get a first look into German inflation with the Preliminary version of their Consumer Price Index. This is considered the main gauge of inflation and because the German economy is an important pillar of the entire Eurozone, the effect on the single currency is likely to be strong. The anticipated change is -0.2% (previous 0.8%) and usually a higher number brings Euro strength.

On the US Dollar side we have the Advance version of the U.S. Gross Domestic Product which is the overall gauge of economic performance. The forecast is 0.7% (previous 1.4%) and the time of release is 12:30 pm GMT; higher numbers are beneficial for the greenback.

GBP/USD

The British GDP matched analysts’ forecast of 0.4%, so the release did not generate strong volatility. On the other hand, the Fed event generated volatility but a clear direction did not emerge and instead a huge spike was created.

Technical Outlook

The long lower wick shows rejection and is a sign that the pair may move to the upside. However, the spike was generated by the Fed release, not by technical factors and we cannot be certain about how the market will react once the dust settles. Currently the oscillators are coming out of overbought and this favours a move lower but it would be safer to wait for a clear breakout before trading.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements for today so we expect the pair to be driven by the technical aspect and by the U.S. GDP.

[GDMFX]

FOREX NEWS: BULLS RUN OUT OF STEAM, US DOLLAR MAKES A MOVE FOR SUPPORT

EUR/USD

Forex News: German inflation data released yesterday didn’t surprise in any way and the U.S. GDP came out lower than analysts’ had forecast so the pair had a bullish day but the advances were timid.

Technical Outlook

The climb seems to be out of steam and despite disappointing U.S. data, the Euro still cannot take the pair significantly higher. This is a sign that a sharp selloff is in the making, and potentially a bearish break of the 50 period Exponential Moving Average. The upside level to watch remains 1.1400 which will act as resistance if the bulls extend their gains, but a break of this level is less probable.

Fundamental Outlook

Early at 6:00 am GMT the German Retail sales come out, expected to show a change of 0.3% compared to the previous -0.4%. This is a high impact event that can bring Euro strength if better than expected numbers are posted. Later in the day, at 9:00 am GMT we get more information about inflation in Europe as the Eurozone CPI Flash Estimate comes out. The forecast is -0.1% while the previous was 0.0%. A higher inflation is considered beneficial for the Euro.

GBP/USD

The pound-dollar pair had a very choppy trading session yesterday, without major advances to either side. The U.S. economic data weakened the greenback but even so, the Pound bulls weren’t able to threaten resistance.

Technical Outlook

Price lacks clear direction as the bulls are starting to lose their momentum but the sellers are not keen to step in and take control yet. That being said, we expect a drop below 1.4510, mainly because the pair has been overbought for a long time and a proper retracement did not occur. If this scenario doesn’t take place, the pair will probably stay between 1.4650 and 1.4565.

Fundamental Outlook

The only notable British event of the day is the release of the Net Lending to Individuals, which is an indicator that tracks the total value of loans issued to consumers. A higher value shows that people are eager to spend more and banks are confident giving them the money. All this likely leads to increased economic activity and eventually a stronger Pound. The forecast is 5.0B, a small increase from last month’s 4.9B.

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

[GDMFX]

FOREX NEWS: OVERBOUGHT LEVELS FAVOUR BEARISH RETRACEMENTS

EUR/USD

Forex News: German Retail Sales and Eurozone CPI showed disappointing numbers Friday but nonetheless, the pair climbed to test resistance. This was mostly due to US Dollar weakness across the board, not Euro strength.

Technical Outlook

The pair has reached once again the strong resistance zone around 1.1450 after going through 1.1400 like a hot knife through butter. Momentum belongs to the bulls but the current move is overextended, as shown by the overbought position of the Stochastic and Relative Strength Index on a four-hour chart. This makes us believe that 1.1450 resistance will hold and will push price lower once again.

Fundamental Outlook

ECB President Mario Draghi will deliver a speech today at 2:00 pm GMT, titled “The future of financial markets: A changing view of Asia”. The impact may be strong given the fact that the topic is related to the financial markets but it may also go mostly unnoticed. However, caution is advised, as always when heads of central banks speak publicly.

On the US Dollar side we have the Manufacturing PMI scheduled for release also at 2:00 pm GMT. This is a survey of purchasing managers from the Manufacturing sector, regarding their opinion about economic and business conditions and usually higher than anticipated numbers trigger US Dollar strength. The forecast for today is 51.6 while the previous value was 51.8.

GBP/USD

Friday we saw another attempt to break 1.4650 resistance but this resulted in a small bounce lower, followed by choppy movement. The pair is stalling and lacks clear direction.

Technical Outlook

From a daily perspective the pair is overbought and the bulls are dealing with strong resistance at 1.4650. Also, the Relative Strength Index has started to descend, making lower highs while price is making higher highs – this means that bearish divergence is present and is a strong indication that price might start to descend in the near future. On top of this, the Stochastic is overbought and favors a move lower, thus we expect a bearish session, with 1.4565 as target.

Fundamental Outlook

British banks are closed today in observance of May Day and the Pound will not be directly affected by economic indicators.

[GDMFX]

FOREX NEWS: KEY RESISTANCE SHATTERED. TRUE BREAK OF FALSE ALARM?

EUR/USD

Forex News: Mario Draghi’s speech gave a boost to the Euro yesterday and a disappointing U.S. Manufacturing PMI weakened the greenback, thus creating the perfect ingredients for a break of key resistance which occurred early in the day.

Technical Outlook

Despite the overbought condition signaled by both the Stochastic and Relative Strength Index, the pair continued higher yesterday, gaining momentum. This shows that the power of the buyers is increasing and hints that future upside movement may occur; the first resistance is located at yesterday’s high – 1.1532 – but a correction to the downside is now very likely. If this correction will not break below 1.1450, we expect 1.1532 to be taken out soon.

Fundamental Outlook

The economic calendar is light today for both the Euro and the US Dollar so we expect price behavior to be dictated by the technical aspect.

GBP/USD

The US Dollar weakened against the Pound as well yesterday but later in the afternoon (GMT time), some of the pair’s gains were erased and signs of rejection became clear.

Technical Outlook

Yesterday’s price action broke above the key level at 1.4650 and created minor resistance at 1.4695. Later in the day the pair retraced lower creating a long upper candle wick that may hint about an end of the uptrend. If the sellers manage to take price back below 1.4650, then yesterday’s movement can be considered a false break of resistance and this will most likely result in an extended move to the downside. On the other hand, a break of 1.4695 would show bull strength and would suggest that we will see further movement north.

Fundamental Outlook

The United Kingdom releases today at 8:30 am GMT the first survey in a series of three: the Manufacturing Purchasing Managers’ Index. The survey is derived from the opinions of about 600 purchasing managers from the manufacturing sector, regarding business conditions in said sector. Numbers above the anticipated 51.3 (previous 51.0) show optimism and usually bring Pound strength.

[GDMFX]

FOREX NEWS: US DOLLAR TRIES TO FIGHT BACK AHEAD OF ADP NON-FARM EMPLOYMENT CHANGE

EUR/USD

Forex News: The Euro continued its assault yesterday, proving that the break of 1.1450 was indeed a real one. The economic calendar was light but the session didn’t lack volatility.

Technical Outlook

Yesterday’s bull run found a top (at least a temporary one) at 1.1615 but now it looks like the overbought condition signalled by the Stochastic and Relative Strength Index is finally starting to push price lower. The last few days have been very volatile so today we may see a slower day and we don’t expect the pair to print a new high. First potential support zone is located around 1.1450 but it’s a long distance to travel in a day so we don’t anticipate a touch of this level.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look into U.S. employment situation with the release of the ADP Non-Farm Employment Change, a report that shows fluctuations in the number of new jobs created during the previous month, excluding the farming industry and government. The indicator is less important than the Non-Farm Payrolls released 2 days later but the impact is strong nonetheless, with higher numbers than the forecast 205K being beneficial for the US Dollar.

GBP/USD

The British Manufacturing PMI released yesterday failed to surpass or even meet analysts’ expectations and as a result the Pound gave back most of the gains achieved during the last days. Now the pair is trading again below 1.4650, a level that acted as strong resistance in the past.

Technical Outlook

The fall seen yesterday brought price very close to the 50 period Exponential Moving Average and to the level at 1.4565. If the uptrend is going to continue, we will probably see a bounce higher in this zone but a bearish break of the moving average would show that maybe a new downtrend is about to start. If this is the case, the first bearish target will become 1.4475, otherwise we may see another attempt to move above 1.4650.

Fundamental Outlook

The British Construction PMI comes out at 8:30 am GMT, showing the opinions of purchasing managers about business conditions in the Construction sector. The anticipated number is 54.1, almost identical to the previous 54.2; higher values show optimism and usually take the pair higher.

[GDMFX]

FOREX NEWS: SUPPORT THREATENED. IS THE BULL RUN OVER?

EUR/USD

Forex News: The U.S. jobs data posted yesterday disappointed but despite this, the US Dollar strengthened against its peers and the pair headed lower towards support, generating a bearish day.

Technical Outlook

The worse than expected U.S. data triggered just a brief moment of upside movement but soon after the pair continued on its downward path. This shows that the sellers are starting to enter the market and also that the US Dollar still possesses enough strength to threaten support. The first potential barrier in front of falling prices is 1.1450, followed by the 50 period Exponential Moving Average and we expect at least one of them to be reached today. Bull run over?

Fundamental Outlook

Most European banks will be closed today in observance of Ascension Day. No major indicators will be released in Europe and the same is true for the United States so we expect a potentially slow session.

GBP/USD

The greenback strengthened against the Pound as well and managed to break 1.4565, heading for 1.4475. The British Construction PMI didn’t meet analysts’ expectations and this contributed to the overall bearish movement.

Technical Outlook

The pair is showing some signs of rejection at the current support (1.4475) and the Stochastic has already reached oversold so we may see some sort of bullish bounce. If this will be the case, the 50 period Exponential Moving Average will become the first upper target, followed by 1.4565. Both are good places where the downside movement can resume but a bullish break would show that the buyers are not ready to give up their control.

Fundamental Outlook

The British Services PMI comes out at 8:30 am GMT, offering hints about the state of the services sector as viewed by purchasing managers from said sector. The anticipated number is 53.6 (previous 53.7) but usually this survey only creates strong movement if the actual value differs substantially from the forecast.

[GDMFX]

FOREX NEWS: BEARS EXTEND GAINS AHEAD OF KEY NON-FARM PAYROLLS DATA

EUR/USD

Forex News: Yesterday we had another session dominated by the U.S. Dollar and we saw the bears score an important victory by breaking the 50 period Exponential Moving Average to the downside. The fundamental scene was calm, without major economic releases.

Technical Outlook

The pair is now trading below 1.1450 and below the 50 period EMA so we can say that the US Dollar made a spectacular comeback and that it’s very possible to see further downside movement. However, the pair traveled a long distance without retracement so the probability of a bullish correction is now greater. This potential correction is likely to touch the moving average or the level at 1.1450 and if a bearish bounce occurs here, the uptrend is probably over and the pair will head towards 1.1335.

Fundamental Outlook

The technical side will be overshadowed today by the release of the most important U.S. jobs indicator: the Non-Farm Employment Change (also known as Non-Farm Payrolls), scheduled at 12:30 pm GMT. The report tracks changes in the number of new jobs created during the previous month and higher numbers than the forecast 203K usually create US Dollar strength, thus a move down for the pair. Caution is recommended because volatility increases almost always at the time of this release.

GBP/USD

The Pound had a mixed day, with a worse than expected Services PMI but support couldn’t be broken decisively and overall we saw choppy price action.

Technical Outlook

The pair is trapped between the 50 period Exponential Moving Average and the support at 1.4475. This support was breached yesterday but price soon returned above it, showing that it’s time for a breather before the next move. This stalemate will most likely come to an end today when the U.S. jobs data is released but until that happens, we don’t expect major developments.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases so the main focus will be the NFP and its result will likely influence the pair’s direction.

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

[GDMFX]

FOREX NEWS: BULLS FAIL TO CAPITALIZE ON DISAPPOINTING NFP, CLASSIC ‘BOUNCE OR BREAK’ SCENARIO IN PLAY

EUR/USD

Forex News: The U.S. Non-Farm Payrolls report disappointed Friday, showing a figure of only 160K compared to the forecast 203K. The US Dollar initially lost ground against the Euro but recovered soon after and the pair finished the day almost to the exact place it started it.

Technical Outlook

Currently price is trading below the 50 period Exponential Moving Average and the bulls couldn’t capitalize on disappointing U.S. data. This shows that the US Dollar is appealing to investors and that we may see bearish price action as long as 1.1450 is resistance. However, the oversold condition of the Stochastic warns that we may see a move up, but the Relative Strength Index doesn’t show an extreme condition so the picture is mixed. The key level for today is 1.1385; a break will make 1.1335 the first target while a bounce will probably take the pair back into the zone around 1.1450.

Fundamental Outlook

The German Factory Orders are released today at 6:00 am GMT, showing changes in the value of orders placed with factories. The anticipated change is 0.7%, better than the previous -1.2% and higher numbers are beneficial to the Euro but the impact of this indicator is often muted. Also today the Eurogroup Meetings take place, attended by personalities from the financial and political scene. The meetings are closed to the press but sometimes participants talk to journalists and this may generate some volatility.

GBP/USD

The pair behaved erratically Friday at the time of the NFP release and tried to push above the 50 period Exponential Moving Average but bounced lower eventually.

Technical Outlook

It looks like the bears are winning the battle but the worse than expected U.S. jobs data is likely to weaken the US Dollar. On top of that, both oscillators are close to their respective oversold levels so the Pound bulls are likely to push the pair higher. If this is the case, the most important barrier will be represented by the 50 period Exponential Moving Average but if it cannot be surpassed, we expect bearish action until 1.4350 is reached.

Fundamental Outlook

The Pound will not be affected by major news releases today so the main focus will be on the technical aspect. Note that the Eurogroup Meetings may have an effect on the pair, thus caution is recommended.

[GDMFX]

FOREX NEWS: LACKLUSTRE FUNDAMENTAL SCENE MAKES WAY FOR TECHNICAL MOVES. BULLISH CORRECTIONS EXPECTED

EUR/USD

Forex News: The pair hesitated yesterday and stalled around the level at 1.1385 despite better than German Factory Orders numbers. Some volatility was seen later in the afternoon but no major advances were made.

Technical Outlook

We still maintain a neutral bias until either 1.1385 or the 50 period Exponential Moving Average is broken. Currently control doesn’t belong to either side price and is trapped between the mentioned support and resistance but the oscillators are close to oversold and this slightly tilts the balance in favour of the bulls. A move above the moving average will likely find resistance at 1.1450 and a bearish break of 1.1385 would make 1.1335 the first target.

Fundamental Outlook

FOMC Member William Dudley will speak today at 7:15 am GMT in Zurich about the international monetary system. Although the discussion is not strictly related to the financial market, some volatility may be generated, especially considering that the rest of the day lacks major economic releases.

GBP/USD

The pair remained below 1.4475 yesterday and even tested the level from below, turning it into resistance. The day lacked major headlines and most of the movement was generated by the technical aspect.

Technical Outlook

Now that price bounced lower at 1.4475, thus confirming it as resistance, we expect the bearish movement to continue until 1.4350 is touched. Once and if price gets here, it’s very possible to see a move back into higher territory, mainly because the current move down is overextended (as shown by the oversold condition of the two oscillators) and a bullish correction is due.

Fundamental Outlook

The only notable indicator is the British Goods Trade Balance, scheduled for release at 8:30 am GMT. The indicator tracks the difference between imported and exported goods and usually, higher numbers than the forecast -11.2B are beneficial for the British Pound.

[GDMFX]

FOREX NEWS: PRESSURE MOUNTS AND THE PROBABILITY OF STRONG MOVEMENT INCREASES

EUR/USD

Forex News: The pair continued its slow movement that still lacks a clear direction. Probably the fact that no major indicators were released had an important part to play in all this.

Technical Outlook

The support at 1.1385 was broken yesterday but the move lacked determination and soon the pair climbed above the mentioned level. The picture remains blurry until some sort of fundamental event takes place or a major economic indicator is released and for the time being, we can note that the pair is trading below the 50 period Exponential Moving Average, a fact that favours bearish movement, but the Stochastic has spent a lot of time in oversold, a fact that favours bullish movement. That being said, our bias is neutral until a clear breakout occurs.

Fundamental Outlook

We have another lacklustre day ahead, with the only notable event being the release of the U.S. Federal Budget Balance. It shows the difference between income and spending for the federal government but usually it doesn’t have a strong impact; however, higher numbers than the forecast 116.2B can be beneficial for the US Dollar.

GBP/USD

The Pound completed a timid retracement to the upside but the bulls didn’t threaten resistance and overall we had a slow day.

Technical Outlook

Yesterday’s movement was mainly bullish but we don’t expect the current move to extend past the 50 period Exponential Moving Average and the resistance at 1.4475. Instead we consider this a good place for price to bounce lower, making a run for 1.4350 support. However, a break of the mentioned resistance zone would make the short term bias bullish, anticipating a move into 1.4565.

Fundamental Outlook

The British Manufacturing Production numbers are released today at 8:30 am GMT, showing changes in the total value of output generated by the manufacturing sector. The anticipated change is 0.4% (previous -1.1%) and higher numbers bring Pound strength.

[GDMFX]

FOREX NEWS: POUND BUCKLES UP FOR STRONG MOVEMENT AHEAD OF BOE CLUSTER OF EVENTS

EUR/USD

Forex News: The Euro climbed higher yesterday without an obvious catalyst behind the move. Most of the session was bullish, with price approaching 1.1450.

Technical Outlook

The current move is likely to touch 1.1450 resistance but is not backed by a fundamental event or economic indicator so we don’t expect it to extend past the said resistance. The 50 period Exponential Moving Average was clearly broken so the short term outlook is bullish but if one of the oscillators (or both) reaches overbought, we expect the pair to turn lower and make another run for 1.1385.

Fundamental Outlook

We have yet another slow day ahead from a fundamental perspective. There’s nothing important on the Euro calendar and on the US Dollar side we have the Unemployment Claims, an indicator which shows how many persons asked for unemployment related benefits during the previous month. Usually this indicator doesn’t have a huge impact but a larger number than the anticipated 277K can trigger US Dollar weakness; the time of the release is 12:30 pm GMT.

GBP/USD

The Pound-Dollar continued its slow movement, with a slight descent due to worse than expected Manufacturing Production numbers; however, the move lower was soon reversed.

Technical Outlook

The pair remains below the 50 period Exponential Moving Average and below 1.4475 resistance so our bias remains bearish, anticipating a move into 1.4350. A break above the 2 types of resistance mentioned earlier will tilt the balance in favour of the bulls and will make 1.4565 the first target but keep in mind that today the fundamental aspect will play an important role.

Fundamental Outlook

It’s an important day for the Pound as the Bank of England has prepared a cluster of events: at 11:00 am GMT the Inflation Report is released, containing the Bank’s projections for economy and inflation for the next 2 years. At the same time the interest rate is announced (no change expected from the current 0.50%), the rate votes (how each MPC member has voted on the rate change) and a Monetary Policy Summary (containing the reasons that triggered the rate decision). Later at 11:45 am GMT, BoE Governor Mark Carney will hold a press conference discussing the Inflation Report. All these events are likely to trigger strong volatility on all Pound related pairs so we recommend caution.

[GDMFX]

FOREX NEWS: CLOSING A SLOW WEEK WITH A BANG: GERMAN GDP, U.S. RETAIL SALES

EUR/USD

Forex News: The bears made a run for 1.1385 support yesterday but failed to break it and the pair instead bounced higher, currently testing the 50 period Exponential Moving Average.

Technical Outlook

The bounce seen at 1.1385 can extend into 1.1450 if price manages to pass the 50 period Exponential Moving Average but the four hour Stochastic is already showing a bearish cross. This suggests that a failed attempt to move above the 50 EMA will probably trigger a move into 1.1335. However the entire week has been very slow and today we finally have some action on the fundamental scene so that will play an important role for price direction.

Fundamental Outlook

Early at 6:00 am GMT the German Preliminary Gross Domestic is released and expected to show a 0.6% change, better than the previous 0.3%; such an increase is likely to bring Euro strength. The more important event is the release of the U.S. Retail Sales, scheduled at 12:30 pm GMT, with an anticipated change of 0.3%, same as last month. Since sales made at retail outlets represent a major part of the entire consumer spending, higher numbers are likely to generate US Dollar strength, thus bearish movement on the pair.

The last important release is scheduled at 2:00 pm GMT in the form of the University of Michigan Consumer Sentiment, a survey that tries to gauge the opinions of consumers regarding the current economic situation. The forecast is 89.9 and higher numbers are beneficial for the US Dollar.

GBP/USD

The Pound initially weakened at the time of the BOE releases but it strengthened soon after, during Mark Carney’s speech. The interest rate remained unchanged, as expected and all members voted in unanimity.

Technical Outlook

The pair broke the resistance zone created by the 50 period Exponential Moving Average and the level at 1.4475, putting the bulls in control of short term movement. This means that we will likely see a move into 1.4565 but a quick move below 1.4475 and the 50 EMA would invalidate such a scenario and would make 1.4350 the target once again.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today so the main market movers will come from the United States and also from the technical side.

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

[GDMFX]

FOREX NEWS: VOLATILITY AFFECTED AS EUROPE CELEBRATES WHIT MONDAY

EUR/USD

Forex News: Friday we saw strong bearish movement, mostly generated by a surprisingly better value of the U.S. Retail Sales, compared to what analysts’ had anticipated. The forecast was -0.3%, the actual number came out 1.3% and the US Dollar answered almost immediately.

Technical Outlook

The latest move broke 1.1335 but also brought the Stochastic and Relative Strength Index in oversold territory. This suggests that we are likely to see a move up in the form of a retracement that will possibly confirm 1.1335 as resistance. If this occurs, then we are likely to see a touch of 1.1210 during the days to come but today we may be in for a slow day considering the lack of economic releases.

Fundamental Outlook

Suisse, French and German banks are closed today in observance of Whit Monday and as a result, no major indicators will be released. Also, volatility is likely to be affected so we expect a slow day; contributing to this is the fact that the United States don’t release any important indicators either.

GBP/USD

Greenback strength generated by the better than expected U.S. Retail Sales was clearly seen against the Pound and the pair dropped Friday to touch support, setting the stage for a bearish break.

Technical Outlook

The bears face an important test as the pair entered the support zone created between 1.4350 and 1.4320. If this zone can be broken today, we expect price to head towards 1.4230 during the days to come but if the sellers run out of steam here, the pair will likely bounce back up into the 50 period Exponential Moving Average. The lacklustre fundamental scene may bring a slow and choppy trading session.

Fundamental Outlook

Similar to the rest of Europe and the United States, the United Kingdom didn’t schedule major news releases so the technical aspect will be the main driver of price today.

[GDMFX]

FOREX NEWS: VOLATILITY PICKS UP AS INFLATION NUMBERS COME OUT FOR THE U.S. AND U.K

EUR/USD

Forex News: Trading was slow yesterday but the pair showed a timid retracement to the upside, which is currently testing the level at 1.1335. The economic calendar was light, without major events.

Technical Outlook

The Stochastic and Relative Strength Index touched their respective oversold levels and price bounced higher, touching 1.1335. However, the short term control belongs to the bears and now price is re-testing the recently broken 1.1335 level; this is a good place for the pair to resume downside movement but the oscillators are just coming out of oversold and this favors a continuation of the current move up. If this is the case, we don’t believe that the 50 period Exponential Moving Average will be broken to the upside and instead we expect a bounce lower if price gets there.

Fundamental Outlook

The U.S. Consumer Price Index shows changes in prices paid by consumers for their purchases; this indicator is one of the main gauges of inflation and usually has a strong impact on the US Dollar, with higher values strengthening it. Today’s forecast is a change of 0.4% compared to the previous 0.1% and the time of release is 12:30 pm GMT.

GBP/USD

After reaching the support zone between 1.4350 and 1.4320 the Pound bounced higher but overall we didn’t have substantial developments yesterday and the trading session was rather slow.

Technical Outlook

We expect the current bounce to extend into the 50 period Exponential Moving Average but once this type of resistance is touched, the probability of a move down will increase. On the other hand, if the pair resumes downside movement right away, we expect it to break 1.4350 – 1.4320 zone and to make its way towards 1.4230 (probably this destination will not be reached in one day).

Fundamental Outlook

Similar to the United States, the United Kingdom releases its Consumer Price Index today. The forecast is a change of 0.5% (same as previous) and higher numbers usually strengthen the Pound; the scheduled time of release is 8:30 am GMT.

[GDMFX]

FOREX NEWS: FOMC MEETING MINUTES TO BE RELEASED, HEAVY US DOLLAR MOVEMENT EXPECTED

EUR/USD

Forex News: The market showed indecision yesterday, moving down when the U.S. posted better than expected inflation data and then making a complete 180 degree turn, heading higher above resistance.

Technical Outlook

The level at 1.1335 acts as good resistance so far, with several candles bouncing off of it and this makes it an important level for short term price action. A bullish break will most likely extend above the 50 period Exponential Moving Average and into 1.1385, while a bearish bounce will open the door for a move into 1.1250 support. The oscillators still favour a move up but don’t show strong momentum and could turn at any moment.

Fundamental Outlook

The FOMC Meeting Minutes are released today at 6:00 pm GMT and this will be the day’s main event. The document shows details of the latest FOMC meeting and often contains hints about future rate changes. If this is the case, we expect heavy movement on all US Dollar related pairs.

GBP/USD

The British CPI released yesterday disappointed, showing just a 0.3% change (forecast 0.5%) and as a result the Pound gave back some of the earlier gains.

Technical Outlook

Price moved above the 50 period Exponential Moving Average, found resistance at 1.4525 and then bounced lower. Currently it is testing the moving average from above and the two oscillators are starting to turn downwards. All this makes us anticipate a bearish trading session, with 1.4350 as target. On the other hand, if the pair remains above the 50 EMA, we are likely to see another attempt to break 1.4525.

Fundamental Outlook

The British Claimant Count Change is scheduled for release today at 8:30 am GMT. This indicator tracks changes in the number of unemployed people that asked for social help and usually, higher numbers than the anticipated 4.0K are detrimental for the Pound because they suggest a future decrease in consumer spending and economic activity.

[GDMFX]

FOREX NEWS: FED MINUTES HINT ABOUT A JUNE RATE HIKE. THE US DOLLAR STRENGTHENS

EUR/USD

Forex News: The euro-dollar pair showed mixed direction ahead of the FOMC Meeting Minutes but the greenback strengthened once they were released. Most of this came from increased optimism that a June rate hike is a distinct possibility.

Technical Outlook

The hints about a potential rate hike are likely to generate further US Dollar strength and thus a break of 1.1210. If this is the case, the next support zone is located at 1.1150 and may be reached even during today’s trading session. The fact that the Relative Strength Index and the Stochastic are approaching oversold may play against this scenario, pushing price higher once 1.1210 is touched; however, for the time being we favour the short side.

Fundamental Outlook

At 12:30 pm GMT the Philly Fed Manufacturing Index comes out, offering details about the health of the manufacturing sector in the Philadelphia district. This survey has a medium impact on the US Dollar but usually, higher numbers than the anticipated 3.2 (previous -1.6) are beneficial for the greenback.

GBP/USD

The Pound soared yesterday, following a poll that showed that 55% of surveyed individuals are against a potential Brexit and only 37% wanting to leave. The FOMC Minutes erased some of the Pound gains but nothing substantial.

Technical Outlook

The resistance at 1.4650 was threatened yesterday but the US Dollar is likely to continue to draw strength from optimism about a June rate hike. Also, the oscillators are both overbought, showing that the pair travelled too far, too fast and thus increasing the chances of a bearish move. If 1.4565 can be broken soon, we expect the pair to head into the 50 period Exponential Moving Average, otherwise the battle for 1.4650 is still on.

Fundamental Outlook

The British Retail Sales are released today at 8:30 am GMT, showing changes in the total volume of sales made through retail stores. This is considered a high-impact indicator because retail sales represent a major part of the entire consumer spending. Higher values than the anticipated 0.6% (previous -1.3%) usually trigger Pound strength and the opposite is true for lower figures.