FOREX NEWS: THE AFTERMATH
EUR/USD
Forex News: Although at the time of writing an official result to the British referendum was not made public, the Euro and Pound climbed to new highs during the day. Volatility was high and movement irregular, as expected.
Technical Outlook
Today’s price direction will still be influenced by the effects of the referendum, so we still expect high volatility. The levels to watch are 1.1450 as resistance and 1.1335 as support but our bias remains neutral considering the shaky fundamental scene.
Fundamental Outlook
The German IFO Business Climate is released at 8:00 am GMT, showing the opinions of about 7,000 businesses about current and future economic conditions. Under normal circumstances, higher values for this survey strengthen the Euro but today’s impact is harder to anticipate than usual; the forecast is 107.6, almost identical to the previous 107.7.
On the US Dollar side we have the release of the CORE Durable Goods Orders, scheduled at 12:30 pm GMT. This version of the indicator tracks changes in the value of orders for goods with a life expectancy of at least 3 years but excludes from calculation transportation items. The expected change is 0.1% and higher percentages usually strengthen the US Dollar.
GBP/USD
The pair climbed in the first part of yesterday but most of the gains were negated in the afternoon. Price action was unpredictable, with massive swings.
Technical Outlook
After reaching a high at 1.4946 the pair retraced to 1.4765, with the Relative Strength Index showing overbought. However the next move remains uncertain, especially because an official result of the referendum is not yet known at the time of writing. Our position remains neutral and we recommend further caution.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases but the Pound will be affected by the aftermath of the referendum.
We hope you had a profitable trading week and we wish you a relaxing weekend.