FOREX NEWS: BOTH PAIRS REMAIN UNDER PRESSURE, TARGETING NEW LOWS
EUR/USD
Forex News: Yesterday the pair posted the biggest rally in a month, after an almost perfect bounce off 1.0500 support. The U.S. Retail Sales showed a slowdown and this contributed to the bullish movement seen yesterday.
Technical Outlook
For the first time in a long while the Stochastic oscillator went above its 80 level, suggesting the pair is overbought. On top of this, the 50 period Exponential Moving Average seems to offer good resistance so far and these factors combined with the strength of the downtrend will most likely trigger another drop. The first tested support is located at 1.0500 while potential support sits at 1.0560.
Fundamental Outlook
The most important economic indicators come from the United States today as well: at 12:30 pm GMT, the Producer Price index comes out, showing potential changes in the price charged by manufacturers for their goods. The indicator has inflationary implications (a higher price charged by producers will be eventually paid by the client) and that is why values above the forecast 0.2% are viewed as beneficial for the greenback.
At 2:00 pm GMT, the University of Michigan will release the Consumer Sentiment survey, which is expected to post a reading of 95.6. Higher numbers will probably strengthen the US Dollar because consumer sentiment is tightly correlated with consumer spending.
GBP/USD
The Pound also strengthened against the greenback but the bulls could not sustain the climb and all gains were erased once resistance was touched.
Technical Outlook
So far the level at 1.5030 was considered potential resistance but the way price bounced yesterday, turns it into tested resistance thus we might see additional rejections if the pair climbs to touch it again. Minor support is located at 1.4890 but we expect it to be broken today and the pair to continue on its way to 1.4830 major support. The first potential resistance is represented by the 50 period Exponential Moving Average.
Fundamental Outlook
Because the United Kingdom did not schedule important news releases for today, the movement of the pair will be mainly affected by the U.S. events mentioned earlier.
FOREX NEWS: U.S. DOLLAR SLOWS ITS ASSAULT: POSSIBLE TREND CONSOLIDATION TO FOLLOW
EUR/USD
Forex News: Although the U.S economic data released Friday disappointed somewhat, the pair continued to descend and the greenback extended its gains against the euro.
Technical Outlook
The important support level at 1.0500 was broken Friday and now price has returned to re-test it from below. If the current encounter will result in a bounce lower, 1.0500 will become resistance, with the potential to reject price in the future. A move above the current level will probably find resistance at the 50 period Exponential Moving Average, which combined with the level at 1.0560 will create a confluence zone.
Fundamental Outlook
The U.S. Industrial Production numbers are released at 1:15 pm GMT but this indicator usually has a strong impact on the greenback only if a hefty difference between forecast and actual number is shown. The forecast for today’s release is 0.3% while last month’s value was 0.2%.
At 6:45 pm GMT, ECB President Mario Draghi will deliver a speech at the SZ Finance Day 2015 “The Future of the Finance Industry – Between Growth and Regulation” summit. The impact on the single currency may be strong but it all depends on the subjects under discussion and Draghi’s attitude. Caution is recommended if trading during his speech.
GBP/USD
Similar to the euro, the sterling posted big losses against the greenback and the pair had another strong bearish day, dropping for almost 200 pips.
Technical Outlook
Price paused around 1.4710 after a sharp fall but this minor support is likely to be broken today given the massive bear strength exhibited lately. However, the chances of bullish retracements have increased because price traveled a long distance south in a very short period. The oscillators are moving upwards, coming out of oversold territory but this does not suggest a reversal, just brief pullbacks, probably followed by further downside movement.
Fundamental Outlook
We have a slow day ahead in terms of British economic news releases and this fact might generate slow, ranging price action.
FOREX NEWS: BULLISH RETRACEMENTS COMPLETE, BEARS MIGHT TAKE OVER AGAIN
EUR/USD
Forex News: Yesterday the downtrend took a breather and the bulls managed to take the pair above the 50 period Exponential Moving Average. Despite yesterday’s climb, the downtrend remains intact.
Technical Outlook
If the break above the 50 period Exponential Moving Average can be sustained, the bulls will encounter the first resistance at 1.0640, followed by 1.0720. However, we must keep in mind that a strong downtrend is still in place and this makes a new encounter with 1.0500 highly probable; the Relative Strength Index and the Stochastic are both close to their respective overbought levels, a fact that increases the possibility of bearish movement.
Fundamental Outlook
At 10:00 am GMT, the German ZEW Economic Sentiment survey is released, showing the opinions of about 275 German analysts and professional investors about the state of the economy. The forecast is 58.9, an increase from the previous 53.0 and usually higher values are beneficial for the euro.
The United States release the Building Permits at 12:30 pm GMT, an indicator that shows the state of the construction sector because any new building requires a permit. Higher numbers than the anticipated 1.07M usually strengthen the US Dollar.
GBP/USD
Similar to the euro, the Pound gained against the greenback yesterday but resistance was not broken and the climb was not accompanied by strong momentum.
Technical Outlook
The important level at 1.4830 sits in front of price but it wasn’t yet tested as resistance; in other words, it can become resistance but for the time being it is simply a place where price might reverse. However, this level combined with the 50 period Exponential Moving Average creates a confluence zone which will be hard to break to the upside considering the strength of the downtrend. The overall bias remains bearish and we consider that further downside movement will soon follow, with 1.4700 zone as target.
Fundamental Outlook
The Pound will have another lackluster day in terms of economic and financial news releases thus price action will be mainly driven by the US events and by the technical aspect.
FOREX NEWS: FOMC MEETING EYED FOR HINTS ON POTENTIAL RATE HIKE
EUR/USD
Forex News: Although the German ZEW Economic Sentiment survey disappointed, the euro climbed yesterday, reaching resistance. Once that happened, bearish pressure started to mount and rejection was shown.
Technical Outlook
Price remained above the 50 period Exponential Moving Average for almost the entire day but the resistance at 1.0640 couldn’t be surpassed. Both oscillators are in the upper part of the range and some rejection candles were formed (pin bar on a four-hour chart), so we expect a new leg of the downtrend to begin. The first barrier is represented by the 50 Period Exponential Moving Average and once this support is broken, we expect the pair to reach 1.0500 support rather fast. A move above the current resistance would open the door for touch of 1.0720.
Fundamental Outlook
Today’s important events come from the United States: at 6:00 pm GMT the Fed will announce the Interest Rate (no change expected) and will publish the Monetary Policy Statement together with the FOMC Economic Projections. Half an hour later, at 6:30 pm GMT, Fed Chair Janet Yellen will hold a Press Conference which is expected to be the day’s biggest market mover, especially if she will offer hints about the next rate change. During such speeches, caution is recommended because the market can react wildly.
GBP/USD
The pair dropped for almost the entire day after making another attempt to break the level at 1.4830. The drop wasn’t influenced by major fundamental events and was mostly technical.
Technical Outlook
The level at 1.4830 is now tested resistance and we can expect price to bounce lower if it will touch it again. For the time being it looks like the bears regained control and the possibility of a break of 1.4700 support zone has increased. However the Stochastic and the Relative Strength Index are moving close to oversold and this could mean that price will climb briefly before breaking support. If this is true, the first resistance will be offered by the 50 period Exponential Moving Average on an hourly chart.
Fundamental Outlook
The British unemployment numbers (Claimant Count Change) come out at 9:30 am GMT. The indicator shows the fluctuation in the number of people that applied for unemployment related benefits during the previous month and usually has a strong impact on the Pound. Lower numbers than the anticipated -30.6k are normally beneficial for the British currency.
At the same time the Bank of England will announce the votes on the latest Interest Rate but no change is expected so the event is likely to go mostly unnoticed.
FOREX NEWS: YELLEN SHAKES THE MARKET. RETRACEMENTS EXPECTED
EUR/USD
Forex News: Yesterday the pair showed the first strong climb in a long while as Fed Chair Janet Yellen expressed concerns about low inflation, given the Dollar’s strength. The Fed kept the rate unchanged but Yellen also mentioned that a rate hike remains possible after the April meeting.
Technical Outlook
Price broke through both 1.0640 and 1.0720 levels of resistance and further bullish action is a distinct possibility, with 1.0900 as target. However we must keep in mind that a strong downtrend is still in place and on top of that, the Relative Strength Index is deep in overbought territory. This makes us believe that price will return to re-test the recently broken level at 1.0720 before it can head higher. A bearish break of this level could mean the up move is exhausted and the sellers might regain control.
Fundamental Outlook
The ECB will announce today at 10:15 am GMT their Targeted LTRO (Long Term Refinancing Option) which is the amount of money they will create and use as loans to European Banks. The expected sum is 40.0 Billion and the impact of the release is not yet known.
At 2:00 pm GMT the Philly Fed Manufacturing Index is released and expected to show an increase to 7.2 from the previous 5.2. Such a value or a higher one will generate additional US Dollar strength.
GBP/USD
The pair also moved north during Yellen’s speech but the British economic data released previously during the day was disappointing and this could mean the up move will be short-lived.
Technical Outlook
The resistance at 1.4830 was broken easily yesterday and the same is true for the level at 1.4890 but this was mostly due to Dollar weakness, not Pound strength. Today we expect an encounter with 1.4890 considering the overbought condition of the Relative Strength Index and the fact that strong bullish moves in a downtrend are bound to retrace before a new direction can be decided. First resistance is located at 1.5030.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day, hence price action will be mainly influenced by the technical aspect and by the US releases.
FOREX NEWS: UNCERTAINTY SETTLES IN, CHOPPY PRICE ACTION CONTINUES
EUR/USD
Forex News: The pair continued to climb yesterday during the Asian session but the start of the European session marked the beginning of a new bearish move which lasted for almost the entire day. Volatility is high and the pair is prone to irregular movement.
Technical Outlook
After moving up through several resistance levels, the pair broke them all to the downside before finally coming to a stop on the support located at 1.0640. Volatility is high and price action is choppy as seen from yesterday’s sharp reversal. The picture is unclear but the Stochastic is oversold and price is struggling at support so another move north is not out of the question. On the other hand, a break of the current level might take price into the next support which is located around 1.0580.
Fundamental Outlook
Today is the second day of the EU Economic Summit but other than that, the fundamental scene is calm and no major news comes out, so we might see a calm end to a wild trading week.
GBP/USD
The Pound-Dollar pair had a wild day as well, moving through several S/R levels with ease. The Dollar losses were almost completely erased and the bears showed they still have enough underlying strength which shouldn’t be underestimated.
Technical Outlook
The support around 1.4700 prevents the pair from dropping further for the time being. However, we expect the level to be broken today and price to continue to move south towards the low at 1.4635. Keep in mind that price action is choppy and a trend is not present on the lower and medium time frames. Usually in a ranging environment price reacts to oversold /overbought conditions better than in a strong trend so look for bullish movement if the oscillators will descend below their lower levels.
Fundamental Outlook
The United Kingdom didn’t schedule any important news releases for the day so we expect price action to be driven by the technical side.
EUR/USD
Forex News: Friday the pair returned above the 50 period Exponential Moving Average, continuing the bullish move started by Yellen’s comments; however major resistance wasn’t breached.
Technical Outlook
The resistance located at 1.0900 remains intact and both the Stochastic and the Relative Strength Index are indicating overbought conditions. This makes us believe that today price will return close to the support at 1.0640 or at least it will touch the 50 period Exponential Moving Average. On the other hand, a strong break of 1.0900 would make the outlook bullish for the rest of the day.
Fundamental Outlook
ECB President Mario Draghi will testify on monetary policy today at 2:00 pm GMT before the European Parliament. The speech is expected to create strong movement for the euro and also to offer hints regarding future direction. As always, caution is recommended during such speeches.
GBP/USD
The Pound had a tremendous day against the US Dollar Friday and the pair traveled to the upside more than 200 pips.
Technical Outlook
Although lately the Dollar is losing ground against its major counterparts, there still is enough underlying strength to stage a descent into the dynamic support represented by the 50 period Exponential Moving Average. If price descends but bounces at 1.4890, we expect a climb into the resistance located at 1.5030. Keep in mind that currently the oscillators are close to overbought and this increases the chances of bearish moves.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases so we might have a slow Monday ahead.
FOREX NEWS: HEADS UP FOR U.S. AND BRITISH INFLATION NUMBERS
EUR/USD
Forex News: The euro outperformed the US Dollar yesterday and a big role in this move was played by Mario Draghi’s optimism regarding the ECB’s bond buying program (QE) and its positive impact on economic recovery.
Technical Outlook
The pair breached the resistance located at 1.0900 but it soon returned to re-test the broken level. Considering Draghi’s optimism, we might see an extended upside move, especially if this re-test results in a bounce. If this scenario comes true, the first target for the pair is the resistance level located at 1.1000 but as a counter-argument, the Relative Strength Index is overbought so a move below 1.0900 could mean the bulls are wavering and that price may return in close vicinity of the 50 period Exponential Moving Average.
Fundamental Outlook
The euro will be affected today by the release of the French Manufacturing PMI (scheduled at 8:00 am GMT) and the German Manufacturing PMI released half an hour later. The French indicator is expected to post a value of 48.9 while the forecast for the German indicator is 51.5. Better numbers are usually beneficial for the euro but if the difference between actual and forecast is not significant, the impact will be mild.
On the Dollar side, a very important indicator is released today: the Core version of the U.S. Consumer Price Index. This version excludes food and energy from calculation and tends to be the more important one because it reflects more accurately the state of the inflation. The expected change is 0.1% while last month it showed a change of 0.2%.
GBP/USD
Price action was choppy yesterday with moves both to the upside and to the downside. No significant advances were made but we saw a bounce near support.
Technical Outlook
The pair came in close vicinity of the support at 1.4830 and breached the 50 period Exponential Moving Average before heading higher. This shows us that support is holding for the time being and suggests that we might see an extended move to the upside which will probably find resistance at 1.5030. First minor resistance in located around 1.4990.
Fundamental Outlook
At 9:30 am GMT the British Consumer Price Index is released and expected to post a change of 0.1% compared with last month’s 0.3%. Lately British inflation has been dropping and another move close to negative territory could cause Pound weakness. As always the pair’s direction will also be directly influenced by the U.S. events.
FOREX NEWS: BEARS MAKING THEIR RUN FOR DOWNTREND RESUMPTION
EUR/USD
Forex News: American inflation was yesterday’s main market mover as it showed better than expected numbers and triggered a bounce at resistance. The US Dollar gained back some of the losses and is now testing support.
Technical Outlook
Yesterday price touched both the resistance at 1.1000 and the support at 1.0900 and is now approaching the 50 period Exponential Moving Average. A break of this dynamic support would imply that the bears are preparing for an extended move down which will probably extend into the support located at 1.0780. On the other hand, a bounce at the current support would make 1.1000 the immediate target.
Fundamental Outlook
At 9:00 am GMT the German IFO Business Climate survey is released and anticipated to show an increase to 107.4 from the previous value of 106.8. The survey has a large sample of about 7,000 businesses that offer their opinion on economic conditions and usually has a strong impact on the euro (better than expected numbers strengthen it). Later in the day, at 12:30 pm GMT, the U.S. Durable Goods Orders (goods with a life expectancy of at least 3 years) are released. The consensus is a 0.5% change, which is a big drop from last month’s 2.8% and if even lower numbers are shown, the greenback might be negatively affected.
GBP/USD
British inflation showed slowdown while the U.S. CPI posted an increase and this set the stage for a bearish day. Although the sellers managed to take price lower, the day was choppy and a lot of whipsaws occurred on the lower time frames.
Technical Outlook
Price bounced at 1.4990 short term resistance and broke below the 50 period Exponential Moving average on an hourly chart. This suggests that the up move might be exhausted and that further downside will follow. First support and barrier in front of falling price is located at 1.4830 and if the oscillators will show oversold when price touches it, we expect some sort of bullish retracement before a strong attempt to break this level.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so we expect price direction to be primarily influenced by the technical aspect and by the U.S. data.
FOREX NEWS: BRITISH RETAIL SALES IN THE SPOTLIGHT. BREAKOUTS EXPECTED
EUR/USD
Forex News: American data disappointed yesterday while the German survey posted a better than expected value and this generated a bullish move during the first part of yesterday’s trading session. However resistance couldn’t be broken and the pair didn’t show clear direction.
Technical Outlook
The fact that price bounced for the second time at 1.1000 resistance could suggest that the bulls have ran out of steam and the next move will take the pair below 1.0900 support. This time the hourly Stochastic is overbought and this will make a descent easier. The first barrier is represented by the 50 period Exponential Moving Average so if this dynamic support will be broken decisively the chances of a move below 1.0900 will increase.
Fundamental Outlook
The U.S. Unemployment Claims are released at 12:30 pm GMT with an expected number of 291K. The jobs situation is always important for the U.S. economy but because this indicator is released every week, its impact tends to be mild. However, a lower number is considered beneficial for the US Dollar.
GBP/USD
For almost the entire day yesterday the pair moved in a jagged line. Price action was choppy and support is still holding.
Technical Outlook
For the time being the direction is unclear for the pair but on the hourly chart we notice a pin bar which is a candle that acts as a warning sign of reversal. A pin on a higher time frame would be even more important but the pair seems to react to the hourly pin as well so we expect further downside movement today. The first support is located at 1.4830 but if the level is reached and price bounces again, this would suggest that the ranging period is still not over.
Fundamental Outlook
The British Retail Sales are released today at 9:30 am GMT and expected to increase 0.4% from last month’s -0.3%. Such a climb would be beneficial for the sterling and would probably take the pair higher. Later in the day, at 5:30 pm GMT, BoE Governor Mark Carney will deliver a speech about his role as Chair of the Financial Stability Board. As always, special attention should be paid to speeches of heads of central banks and caution should be used.
FOREX NEWS: PREPARING FOR A BREAKOUT AT THE END OF A RANGING WEEK
EUR/USD
Forex News: Yesterday the pair climbed briefly above 1.1000 but the break soon proved to be a false one and the bears took over for the remaining of the day. The U.S. Unemployment Claims posted a better than expected reading and the greenback strengthened as a result.
Technical Outlook
Price is currently testing the support at 1.0900 but if sellers can take it below this level we are likely to see downtrend resumption. Both the Stochastic and the Relative Strength Index are angled downwards, suggesting that the bearish move is still far from over and price pierced the 50 period Exponential Moving Average in a decisive fashion, so at the moment all hints suggest that price will continue south. Of course a bounce at the current level would invalidate this scenario.
Fundamental Outlook
The Final version of the U.S. Gross Domestic Product is released today at 12:30 pm GMT. Although this is the least important out of the three versions, it can still have a strong impact on the US Dollar. The anticipated value is 2.4% while the previous was 2.2% and higher values are beneficial for the greenback.
At 7:45 pm GMT Fed Chair Janet Yellen will speak at a Press Conference in San Francisco. Audience questions are expected and this makes the speech more important but the late hour might have an influence on volatility.
GBP/USD
The British Retail Sales posted a better value than analysts expected and this generated Pound strength during the first part of yesterday’s trading session. However resistance proved too strong and the bulls ran out of steam so the pair moved south after a bounce at 1.4990.
Technical Outlook
The important support at 1.4830 sits again in front of falling price. Our bias is bearish, anticipating a break of this level but a bounce followed by a move higher is not out of the question considering the fact that the pair is currently in a ranging period. If the support will be broken we would like to see it re-tested from below before we can consider a true breakout.
Fundamental Outlook
The British fundamental scene lacks major events today so price direction will be mainly decided by the technical aspect.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: UNCERTAINTY STILL PRESENT. GERMAN INFLATION EYED
EUR/USD
Forex News: The Final version of the U.S. Gross Domestic Product showed a slightly lower value than analysts expected and this triggered a climb Friday but the pair returned below 1.0900 late during the session, helped by Yellen’s comments.
Technical Outlook
The pair returned below 1.0900 and below the 50 period Exponential Moving Average and the Stochastic is crossing downwards at the top of its range, close to overbought. These are bearish signs which make us believe that today price will travel south, towards the minor support located at 1.0780. If price moves back above 1.0900 the first resistance will be offered by 1.1000.
Fundamental Outlook
At 12:00 pm GMT the German Preliminary Consumer Price Index is released, showing the change in German inflation. The consensus is 0.4% which is lower than the previous 0.9% so we might see euro weakness if analysts’ forecast comes true and the opposite is true for a higher value.
GBP/USD
Friday the pair continued to move in a range and neither side managed to take clear control. The disappointing American GDP generated some US Dollar weakness but nothing substantial.
Technical Outlook
Price is moving sideways without clear direction and the 50 period Exponential Moving Average is flat so our bias is neutral on the pair until a clear break occurs. The Stochastic is crossing downwards coming out of overbought territory and this might create some bearish pressure but no major moves are expected until the range is broken.
Fundamental Outlook
The British Net Lending to Individuals is released at 8:30 am GMT showing the change in total credit given to consumers. A higher value than the anticipated 2.5B suggests that people are comfortable spending money and this is usually beneficial for the Pound but the indicator has a medium impact so we don’t expect major moves at the time of the release.
EUR/USD
Forex News: German inflation posted a better number than analysts expected but the value was still lower than last month and this coupled with technical reasons generated a slow but bearish day.
Technical Outlook
Price remained below the 50 period Exponential Moving Average and below the resistance at 1.0900 for almost the entire day, but 1.0780 minor support was not threatened. Today we expect an encounter with this level but if the oscillators will be oversold at the time, the chances of a bounce higher will increase. For a break to be considered valid we would like to see the level re-tested from below.
Fundamental Outlook
The main event of the day is released at 9:00 am GMT: the Euro Zone Consumer Price Index. This is the main gauge of inflation for the European economy and has a strong impact on the single currency. ECB’s target for inflation is just below 2% so the current level is considered too low and numbers below analysts’ expectation of -0.3% would further weaken the Euro.
At 2:00 pm GMT the U.S. Consumer Confidence comes out and is expected to post a value of 96.6, almost unchanged from last month’s 96.4; however, a higher number is considered beneficial for the US Dollar.
GBP/USD
The British data was in line with analysts’ expectations and didn’t have a strong impact on the pair’s movement which slid lower yesterday.
Technical Outlook
After moving below the 50 period Exponential Moving Average price broke the important support located at 1.4830. This break was long anticipated but in order to consider it a true break, price must re-test the level from below and currently it is headed up, towards the broken level. If the re-test results in a bounce lower, 1.4830 will become resistance once again and the chances of further downside movement will increase.
Fundamental Outlook
At 8:30 am GMT the British Current Account is released and anticipated to show a value of -21.2B. A higher value is usually beneficial for the Pound but the release has mixed impact. At the same time the Final version of U.K.’s Gross Domestic Product is announced but no change is expected (0.5%) so the event might go mostly unnoticed. However, a higher value will likely strengthen the Pound.
FOREX NEWS: FIRST LOOK INTO U.S. EMPLOYMENT SITUATION
EUR/USD
Forex News: The European Consumer Price Index came out with a value close to analysts’ expectations and the release didn’t create strong movement but the pair moved south for almost the entire duration of yesterday’s trading session. U.S. Consumer Confidence improved, contributing to the US Dollar strength.
Technical Outlook
The minor support at 1.0780 was broken yesterday and the bears seem to regain control over the pair so we expect to see further downside movement during the days to come. Both oscillators are oversold and this could mean that price will touch 1.0780 from below before a stronger bearish move can occur. First level of importance and potential resistance is now 1.0780 while support sits in the zone around 1.0650.
Fundamental Outlook
Today at 12:15 pm GMT we will get the first look into the American jobs situation with the release of the ADP Non Farm Employment Change. The report shows how many new jobs were created during the previous month but it is not as important as the Government report which comes out Friday. Nonetheless, a higher number than the anticipated 226K will most likely strengthen the Dollar, taking the pair lower.
GBP/USD
After moving slowly for the most part of the day, the pair rallied in the afternoon and managed to climb back above 1.4830 resistance, shifting the balance in favor of the bulls.
Technical Outlook
The break of 1.4830 could very well be a false move which can be easily reversed but if the bulls can maintain the pair above the mentioned level after a re-test then we are likely to see an extended climb. On the other hand, a quick move below 1.4830 and below the Exponential Moving Average would mean that yesterday’s break of resistance was just a single impulse and we will likely see a move close to 1.4710 during the days to come.
Fundamental Outlook
The British Manufacturing PMI is released today at 8:30 am GMT and is expected to show a value of 54.5, slightly better than last month’s 54.1. This is a leading indicator of economic health focused on the manufacturing sector and higher numbers are beneficial for the British Pound.
FOREX NEWS: MIXED PRICE ACTION IN ANTICIPATION OF THE U.S. NON-FARM PAYROLLS
EUR/USD
Forex News: Yesterday’s first look into U.S. employment revealed that the pace of American job creation might be slowing down. The worse than expected value of the ADP Non Farm Employment Change triggered dollar weakness which allowed the pair to climb in the second part of yesterday’s trading session.
Technical Outlook
The pair is now testing 1.0780 from below again but price action is characterized lately by sharp reversals and choppy movement so it appears like the market is waiting for a catalyst to start moving in a clear direction. That catalyst could very well be Friday’s U.S. Non Farm Payrolls so until then we could see more of this uncertainty. The oscillators don’t offer a lot of hints about future direction but as long as price is below the Moving Average and below 1.0780 we slightly favor the short side.
Fundamental Outlook
The U.S. Trade Balance is announced today at 12:30 pm GMT and could be the day’s main market mover. The indicator shows the difference between imported and exported goods and a higher number is usually beneficial for the greenback. The forecast is -2.0B, better than last month’s -2.5B.
GBP/USD
The British Manufacturing PMI came out close to analysts’ expectations and the figure didn’t have a strong impact on the Pound. However the US Dollar suffered from a disappointing jobs situation.
Technical Outlook
Lately the pair is moving above and below 1.4830 without choosing a clear direction. The 50 period Exponential Moving Average coupled with the mentioned level forms a confluence zone which is hard to break especially because neither side is in control. If a bounce occurs at the current level, we anticipate a move lower, into the support located at 1.4710.
Fundamental Outlook
British Construction data is released at 8:30 am GMT; the indicator shows the opinions of purchasing managers about business conditions in the construction sector but the release tends to have mixed impact, depending on the difference between actual number and forecast. Today’s anticipated number is 59.7 and usually higher numbers strengthen the Pound.
FOREX NEWS: GOOD FRIDAY AFFECTS VOLATILITY, U.S. NON-FARM PAYROLLS RESTORE IT
EUR/USD
Forex News: Although U.S. data came out better than analysts had anticipated, the greenback lost ground against most of its counterparts. The euro was no exception and the pair climbed for almost the entire duration of yesterday’s trading session.
Technical Outlook
The pair climbed strongly but it is now showing signs of rejection at 1.0900 resistance with both oscillators being overbought. This suggests that price will retrace lower even if 1.0900 is going to be broken. However, we expect a slow day until the U.S. Non-Farm Payrolls are released, because most banks around the world are closed, celebrating Good Friday. The pair’s direction for the remainder of the day will be dependent on the U.S. jobs report outcome.
Fundamental Outlook
As mentioned above, banks around the world are closed today and this might translate into slow price action until the release of the U.S. Non-Farm Payrolls, scheduled at 12:30 pm GMT. This is considered the most important jobs related data and the impact is almost always huge. A higher number than the anticipated 247K will most likely strengthen the greenback, driving the pair lower.
GBP/USD
The pair struggled for almost the entire day to move away from 1.4830 level but it failed to do so even when a worse than expected British Construction PMI was posted.
Technical Outlook
As long as the pair doesn’t move decisively away from 1.4830 the picture will remain unclear and uncertainty will be present. The 50 period Exponential Moving Average is flat, the oscillators don’t show an extreme condition and all moves are quickly reversed so we expect choppy price action until the U.S. jobs report is released.
Fundamental Outlook
British banks are closed today, celebrating Good Friday and no economic indicators are released by the United Kingdom. The day’s highlight will be the U.S. Non-Farm Employment report.
FOREX NEWS: CAN THE US DOLLAR RECOVER FROM THE DAMAGE MADE BY THE NFP?
EUR/USD
Forex News: As anticipated, Friday price action was slow until the release of the U.S. Non-Farm Payrolls. The disappointing figure of 126K (forecast 246K) triggered dollar weakness and a substantial climb.
Technical Outlook
Friday’s climb took price into 1.1000 resistance but now rejection signs are present. As we saw late during the last session, price bounced lower and the bulls weren’t able to close the week above resistance. This fact coupled with the overbought position of the oscillators might show that a move south is next. If the negative effects of the U.S. jobs report extend throughout the day, we might see higher prices but the Easter holiday is likely to generate irregular volatility.
Fundamental Outlook
Major Banks around the world are closed today, celebrating Easter Monday. This will most likely translate into low or alternating volatility, with the only notable release being the U.S. Non-Manufacturing PMI. The release is scheduled at 2:00 pm GMT and the anticipated number is 56.6. Higher figures suggest optimism among purchasing managers outside the manufacturing sector and may strengthen the US Dollar but the impact of the release is uncertain considering the holiday.
GBP/USD
The pair was mostly flat Friday before the NFP report came out and afterwards price behaviour was bullish, based on Dollar weakness, not Pound strength.
Technical Outlook
The latest bullish move comes after a period of sideways movement and for the time being it is just a single impulse which might be easily reversed. The day will probably have mixed price action as volatility will be influenced by the Easter holiday. We expect reversals and/or whipsaws on the lower timeframes. The 50 period Exponential Moving Average will provide support if price will move south to touch it, which is a very likely scenario, considering the overbought condition of the oscillators.
Fundamental Outlook
British banks one closed today, celebrating Easter Monday and no economic or financial indicators are released.
EUR/USD
Forex News: Yesterday’s price action was mostly bullish but no major moves took place because a big part of the world celebrated Easter and major banks were closed. The U.S. economic data came out close to analysts’ expectations and the impact was mild.
Technical Outlook
The pair remained above 1.1000 and above the 50 period Exponential Moving Average, things that show bullish pressure and suggest that we will see a move into 1.1100 resistance in the near future. Before that can happen, the pair must surpass the minor resistance at 1.1050 but considering the overbought condition of the oscillators, we consider that a move into support is very likely. Support is located at the bullish trend line combined with 1.1000.
Fundamental Outlook
Both the euro and the U.S. Dollar have slow days ahead as no major economic indicators are released. Price action will be driven by the technical aspect.
GBP/USD
Similar to the EUR/USD, the Pound-Dollar had a bullish day for the most part but price action was pretty slow because British banks were closed in celebration of Easter.
Technical Outlook
Price action is bullish at the moment but bearish pressure increases and we expect a descent into the 50 period Exponential Moving Average. Both the Relative Strength Index and the Stochastic are overbought and this means the chances of moves south have increased. First major support is located at 1.4830 while first resistance sits at 1.5030.
Fundamental Outlook
At 8:30 am GMT the British Services PMI is released and is expected to post a reading of 57.1. This is a survey derived from the opinions of purchasing managers from the Services sector and acts as a leading indicator of economic health so higher numbers than analysts’ forecast are usually beneficial for the Pound.
FOREX NEWS: DOLLAR SHOWS SIGNS OF STRENGTH AHEAD OF FOMC MINUTES
EUR/USD
Forex News: Yesterday the US Dollar managed to erase some of its previous losses and the pair descended below support. The move was mostly generated by technical reasons as no major economic news was released.
Technical Outlook
The level at 1.0900 was breached convincingly yesterday and we expect this break to bring in more sellers, resulting in a move lower. However both oscillators are showing an oversold condition of the market on an hourly chart and price traveled a relatively long distance without retracing. This might suggest that we are going to see a climb into 1.0900 before price heads lower. First support is located at 1.0720 but the FOMC Meeting Minutes will play a major role in today’s price action.
Fundamental Outlook
The Euro Zone Retail Sales come out today at 9:00 am GMT with an expected change of -0.1% compared with last month’s 1.1%. Such a drop would weaken the euro but often the indicator triggers only mild moves. Later in the day, at 6:00 pm GMT the FOMC will release the minutes of their latest meeting, containing insights into the reasons which determined the latest interest rate vote. The release is usually accompanied by strong movement manly because the document offers hints about future monetary direction.
GBP/USD
The bears took control of the pair yesterday and we saw a perfect touch of 1.4830 support. The British Services PMI posted a better than expected value but this didn’t strengthen the Pound enough to prevent the drop.
Technical Outlook
After touching 1.4830 the pair quickly bounced higher but this small bullish move is likely to be short-lived. Our bias is slightly bearish at the moment and we anticipate a move below 1.4830 but lately all moves are quickly reversed and price is not trending strongly so another move into 1.4980 is not out of the question.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases, thus price action will be mainly influenced by the technical aspect and by the FOMC minutes released in the afternoon.
FOREX NEWS: FOMC MINUTES ADD DOLLAR STRENGTH. MARKET STILL CHOPPY
EUR/USD
Forex News: Before the Fed released the minutes of their latest meeting, the pair moved on an upwards path but found resistance and bounced lower. The US Dollar strengthened at the time of the FOMC release although the document revealed that officials see risks coming from policies overseas and a June rate hike doesn’t have majority support.
Technical Outlook
The 50 period Exponential Moving Average offered good resistance yesterday as seen from the bounce lower. The control belongs to the sellers and we expect at least a touch of 1.0720 but price is likely to bounce higher if this support is reached, especially if the oscillators will enter oversold. Resistance is represented by the 50 period Exponential Moving Average but our bias is bearish for the moment.
Fundamental Outlook
The release of the U.S. Unemployment Claims is the day’s most notable event. The expected number is 283K and lower values are beneficial for the greenback. The time of the release is 12:30 pm GMT but the impact is usually mild because this indicator is released every week.
GBP/USD
Price action was mostly bullish during the first part of yesterday and the pair moved north after a small dip below 1.4830. The FOMC meeting minutes added strength to the greenback but even before the release the pair started to move downwards.
Technical Outlook
The resistance zone around 1.4980 proves very important for short term prices action and yesterday’s bounce confirms this. The pair is ranging lately and it seems the next destination is 1.4830 once more. Our view is neutral on the pair for the time being but we hope the BoE rate decision will generate a breakout.
Fundamental Outlook
At 11:00 am GMT the Bank of England will announce their interest rate. The event will probably create just some irregular volatility and not strong directional moves because the chances of a rate change (currently 0.50%) are close to zero.
