FOREX NEWS: FULL DAY AHEAD. HIGH-PROFILE EVENTS AND HEAVY MOVEMENT EXPECTED
Forex News: The Euro adopted a bullish path yesterday on the back of speculation that the ECB might use more stimulus measures such as a lending program which will boost consumer credit.
The pair moved higher, in close vicinity of 1.3640 resistance but according to the ranging style which governs the market lately, it bounced lower. The main levels to watch remain1.3640 as resistance and 1.3585 as support but considering today’s main events, we anticipate a breakout; however, the direction will be totally dependent on the outcome of these events.
Germany will announce at 9:00 am GMT the ZEW Economic Sentiment will be released, showing the level of optimism among German institutional investors and analysts who are highly informed about economic conditions due to the nature of their jobs. The anticipated value is 28.9, a decrease from the previous 29.8 and lower numbers usually weaken the Euro.
The US Retail Sales are released at 12:30 pm GMT; the indicator measures the change in sales made at retail outlets and its release is considered to have a high impact. The expected value is 0.6% compared with the previous 0.3% and higher numbers are beneficial for the US Dollar.
Fed Chair Janet Yellen will testify today at 2:00 pm GMT in Washington before the Senate Banking Committee; the topic is the Semiannual Monetary Policy Report and the speech is likely to be a major market mover, especially during its the second part when members of the Committee will ask questions and Janet Yellen will answer them.
The Pound finally retraced yesterday and managed to break the closest support. The move south is attributed to high prices that were overextended and in need of a breather.
The break of the support located at 1.7095 is not a reason to believe the uptrend has finished but rather a signal that bullish momentum is fading. The chances of moves upwards remain high and a good place for uptrend resumption is 1.7063 (which is potential support, not confirmed yet), followed by 1.7010. The day’s fundamental events will have a very high impact on price action.
United Kingdom’s Consumer Price Index will be announced today at 8:30 am GMT. The indicator shows the price that consumers have to pay for the goods they purchase and is the main gauge of inflation; any increases above the expected 1.6% can further strengthen the Pound, taking the pair higher.
BOE Governor Mark Carney will testify at 9:00 am GMT about the Financial Stability Report at the House of Commons Treasury Committee Hearing. The testimony can have a huge effect on Pound’s movement, depending on the Governor’s attitude and answers so we recommend caution if trading at the time. Of course, the US events mentioned above will have a direct and high impact on price action.