FOREX NEWS: POUND RATE HIKE SPECULATION BACK IN THE SPOTLIGHT
EUR/USD
Forex News: Price action remained slow yesterday, mostly due to the lack of major economic releases, but the pair reached 1.1120 target almost to the pip and then retraced higher.
Technical Outlook
The pair is still trading below the 50 period Exponential Moving Average and below 1.1170, so the bias remains negative, anticipating a break of 1.1120, followed by a move into 1.1075. It must be noted that 1.1120 acted as solid support yesterday, pushing price higher as soon as it was touched, so this level will probably play an important role in today’s price action. The way price behaves near it will determine the next direction: a break will show bearish pressure, while another bounce at this level will establish it as strong support and will probably take the pair into the 50 EMA.
Fundamental Outlook
Similar to the rest of the week, today is a slow day in terms of economic indicators. The only notable release is the U.S. Unemployment Claims, scheduled at 12:30 pm GMT and expected to post a reading of 241K. Higher numbers usually weaken the US Dollar but the impact is low-to-medium because the indicator is released weekly.
GBP/USD
The Pound strengthened yesterday, after Queen Elizabeth said that the government’s priority is securing the best Brexit deal. Also, BOE Chief Economist Haldane renewed hopes of a rate hike sooner rather than later and this was another catalyst behind yesterday’s spike.
Technical Outlook
The pair spiked higher mostly due to the fundamental reasons outlined above but it bounced lower after reaching the psychological level at 1.2700. As seen from yesterday’s price action, the Pound can become very volatile, depending on any news, speculation or rumours regarding Brexit or rate hikes, so we recommend caution and we consider this pair high-risk. As long as the pair remains below the 50 EMA our bias is bearish but a break above 1.2690 – 1.2700 will probably trigger a move above the moving average.
Fundamental Outlook
The United Kingdom didn’t schedule major economic indicators for today, so the technical aspect will prevail, assuming there are no other surprises.