FOREX NEWS: RESISTANCE HOLDS, US DOLLAR PUSHES BOTH PAIRS LOWER
Forex News: German PMI surveys released Friday showed better readings than analysts had expected and on the other hand the US Dollar remained mostly unaffected by the Durable Goods Orders. All this generated another bullish session, with the pair testing resistance.
The resistance at 1.0800 was again breached but the bulls couldn’t push price higher, which is a sign of weakness and an early indication that we will probably see a touch of the 50 period Exponential Moving Average today. As an alternate scenario, a continuation of the bullish move will probably extend into 1.0830, possibly 1.0850 but we don’t expect the upper resistance to be broken.
At 8:00 am GMT the German IFO Business Climate survey comes out, showing the opinions of about 7,000 German businesses regarding current economic conditions as well as a 6-month outlook. The expected figure is 111.2 and usually the Euro is positively impacted by numbers that exceed the forecast.
For the most part of Friday’s trading session the pair moved sideways after establishing resistance at 1.2530. The overall bias remains bullish but the current move looks like the beginning of a deeper retracement.
If the bears manage to break 1.2480 and re-test it from below, thus establishing the level as resistance, then the next target will become the 50 period Exponential Moving Average, which will probably climb above 1.2420 by the time price descends to touch it. It must be noted however that the pair is in a clear uptrend from a medium term perspective and this means that once the 50 EMA is touched, we may see rejection and a potential move up.
The Pound will not be affected by any important economic releases today, so the technical aspect will be the main market mover.