FOREX NEWS: THE EFFECTS OF THE NFP REPORT ECHO ON TODAY’S PRICE ACTION
EUR/USD
Forex News: Friday’s trading session was mostly affected by a better than expected value of the United States employment report; dollar strength generated by this brought the pair into immediate support.
Technical Outlook
The pair encountered strong support at the 50 period Exponential Moving Average and 1.1100 level but we expect this confluence zone to be broken today on the back of US Dollar strength generated by the jobs situation. The Stochastic is showing good bearish momentum, increasing the possibility of a break but a bounce higher is not out of the question, depending on the G7 talks.
Fundamental Outlook
Today is the second day of the Group of Seven (G7) meetings where the main issue is the Greek debt. The market might react strongly, depending on the outcome of the talks so caution is recommended throughout the day.
At 6:00 am GMT the German Industrial Production numbers are released, showing changes in the total value of goods and services produced by the German industrial sector. This is a medium-impact indicator but higher numbers than the anticipated 0.6% can strengthen the euro to some extent.
GBP/USD
The US Dollar strengthened against the Pound as a result of the NFP report but most of the gains were nullified during the second part of Friday’s trading session.
Technical Outlook
Although some of the gains were erased, the US Dollar is likely to drive the pair lower today; the 50 period Exponential Moving Average is above price and the Stochastic lines are nicely spread apart, moving down and indicating bearish momentum. First support is located at 1.5100 but a touch is less likely to happen today.
Fundamental Outlook
The United Kingdom didn’t schedule major news announcements today but British representatives will attend the G7 meetings and this can have an impact on the Pound.
FOREX NEWS: A STRONG U.S. DOLLAR – A REASON TO WORRY?
EUR/USD
Forex News: The pair edged higher yesterday on the back of better than anticipated German Industrial Production numbers and speculation about Obama’s strong dollar concerns. Support is still intact ant the greenback gave back most of the NFP gains
Technical Outlook
The horizontal support located at 1.1100 combined with the 50 period Exponential Moving Average created a confluence zone which proved too tough for the bears to break. The Stochastic is crossing upwards in a short term bullish environment so we expect price to climb until 1.1280 is touched. If bullish momentum fades, the 50 period EMA will offer the first support, followed by the level at 1.1100.
Fundamental Outlook
Today is a slow day, with the only notable indicator being the JOLTS Job Openings released at 2:00 pm GMT. This is a leading indicator of employment in the United States (excluding the farming industry) and higher numbers than the anticipated 5.03M can have a positive impact on the US Dollar. However, its release comes after the Non-Farm Payrolls report and the impact is far lower.
GBP/USD
Yesterday’s trading session was choppy, with no significant advances on either side. Price remained below the four hour moving average.
Technical Outlook
The impulse generated Friday by the NFP report couldn’t be continued yesterday and price moved mostly sideways. However, the pair is still trading below the 50 period Exponential Moving Average so our bias is slightly bearish, aiming for the first minor support located at 1.5180.
Fundamental Outlook
The British Trade Balance is released at 8:30 am GMT, showing the difference between imported and exported goods. Usually this indicator produces a mild reactions but surprising numbers can have a strong impact so caution is needed nonetheless. Higher numbers than the forecast -10.0B are bullish for the Pound.
FOREX NEWS: BRITISH POUND IN THE SPOTLIGHT, BREAKOUTS IN SIGHT
EUR/USD
Forex News: After moving above the resistance at 1.1280 yesterday the pair descended below the mentioned level. The fundamental scene was rather calm and price action was normal.
Technical Outlook
The return below 1.1280 might suggest that we will see a reversal of the medium term uptrend and a move into the first potential support which is now represented by the 50 period Exponential Moving Average. The Stochastic is starting to turn downwards but it is not showing an extreme condition so price still has room to move to the upside if 1.1280 is broken again.
Fundamental Outlook
Today is another day without major economic news releases for both the euro and the dollar so the technical aspect will take center stage.
GBP/USD
Despite the fact that the British Trade Balance showed a better than expected value, the pair didn’t move strongly to either side yesterday; a brief move above the moving average was quickly reversed.
Technical Outlook
As long as price remains near the 50 period Exponential Moving Average the indecision period is still not over. Once a direction is chosen, the first support is represented by the level at 1.5180 and first resistance is located at 1.5500. Today we expect a volatile day considering that the fundamental scene is full of important events.
Fundamental Outlook
The Pound has a busy day ahead: the first event is the release of the British Manufacturing Production numbers, scheduled at 8:30 am GMT and expected to show a change of 0.1% compared to last month’s 0.4%. The indicator tracks changes in the value of total goods produced by manufacturers and usually lower numbers suggest economic contraction, weakening the Pound.
At 2:00 pm GMT a British Gross Domestic Product Estimate is released; the previous value was 0.4% and because the GDP is an economy’s main gauge of performance, higher numbers can strengthen the Pound. The final event of the day is a speech delivered by Bank of England Governor Mark Carney at the Annual Mansion House Dinner, in London. The event is scheduled at 8:00 pm GMT and this late hour may affect the impact of the speech. In any case, speeches of the heads of Central Banks can create strong movements so caution is advised.
FOREX NEWS: POUND SOARS, EURO LACKS DETERMINATION, DOLLAR WEAK AHEAD OF U.S. RETAIL SALES
EUR/USD
Forex News: The Greek debt issue remained unresolved but the euro climbed above 1.1350 yesterday before dropping in the zone around 1.1280. Price action was choppy, with a lot of reversals on the lower time frames.
Technical Outlook
The pair is trading above the 50 period Exponential Moving Average but every time it climbs above the resistance at 1.1280, the bears manage to bring it back below or near that zone. This suggests that bulls lack the required strength for a clean breakout and also that 1.1450 cannot be reached yet. The first support is represented by the 50 period EMA on the four hour chart while the first resistance remains 1.1450; our bias is neutral until price moves further away from 1.1280.
Fundamental Outlook
An important indicator for the US Dollar is released today: the American Retail Sales. Sales made on retail levels represent a major part of consumer spending which in turn represents about two thirds of overall economic activity. That’s the reason why a higher value than the anticipated change of 1.1% is considered bullish for the greenback. The release is scheduled at 12:30 pm GMT, together with the Core version of the indicator, which excludes automobiles from calculation.
GBP/USD
The pair moved strongly yesterday, with the Pound gaining against the US Dollar although British manufacturing data came out with a disappointing value (however, Industrial Production numbers came out better than anticipated). The NIESR GDP Estimate showed economic expansion, adding to the climb.
Technical Outlook
The anticipated breakout occurred yesterday and the important level at 1.5500 was breached but it cannot be yet considered clearly broken. The Relative Strength Index and the Stochastic are both overbought and the pair travelled a hefty distance in a short while. This hints towards a bearish pullback but a lot will depend on the U.S data released today.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases today, thus the pair will be mainly driven by the technical side.
FOREX NEWS: U.S. DOLLAR FLEXES MUSCLES AS BULLS RUN OUT OF STEAM
EUR/USD
Forex News: The US Dollar strengthened yesterday on the back of encouraging U.S. Retail Sales numbers and the pair descended into dynamic support as a result; overall we had a bearish session.
Technical Outlook
At the moment the pair is testing the 50 period Exponential Moving Average from above; both the Stochastic and the Relative Strength Index are moving downwards, supporting an extended move south. If the moving average can be surpassed, we expect price to move into the support located at 1.1100.
Fundamental Outlook
At 12:30 pm GMT the U.S. Producer Price Index comes out, showing the change in prices charged by producers for their goods. A higher price will be eventually passed on to the consumer and that’s why this indicator has inflationary implications; higher values than the forecast 0.4% usually strengthen the US Dollar.
The other important event of the day is the release of the University of Michigan Consumer Sentiment survey, scheduled at 2:00 pm GMT and expected to show a value of 91.3 compared with the previous 90.7. Consumer sentiment is correlated with consumer spending which in turn represents a major part of overall economic activity so higher values are beneficial for the greenback.
GBP/USD
The move above resistance couldn’t be sustained by the bulls and price moved lower yesterday, also helped by the American Retail Sales release.
Technical Outlook
After the move below 1.5500, price returned to test the level again. We are now dealing with a classic bounce-or-break scenario and we consider that another move above the said level will most likely mean that price will continue higher. On the other hand, a bounce lower is likely to extend into the 50 period Exponential Moving Average on a 4 hour chart.
Fundamental Outlook
The Pound has a slow day again, in terms of economic releases, so price direction will be mainly affected by the U.S. events and by the technical aspect.
We hope you had a profitable trading week and we wish you a relaxing weekend.
EUR/USD
Forex News: Friday’s price action was choppy and we saw a move below the moving average, followed by a sharp reversal. Trading was difficult, especially on the lower time frames
Technical Outlook
Currently the pair is stuck in a tight range represented by the 50 period Exponential Moving Average and the resistance at 1.1280. When one of these boundaries is broken, we expect price to continue in that direction but the Fed meeting scheduled Wednesday is likely to generate more of this choppy movement because usually before a major event, traders tend to hold back, waiting to see the outcome.
Fundamental Outlook
At 1:00 pm GMT ECB President Mario Draghi will testify before the Economic and Monetary Affairs Committee of the European Parliament. The topic will be monetary policy, so the euro will be strongly affected, depending on the president’s stance and attitude.
The dollar’s movement will be influenced by the U.S. Industrial Production numbers released at 1:15 pm GMT; the indicator shows the change in the total value of goods produced by the industrial sector and values above the expected 0.2% can strengthen the greenback although the indicator usually has a mild impact.
GBP/USD
The Pound finished last week on a bullish note, with the pair closing above key support. Early during the day price direction was not clear but the N.Y. session brought the biggest movement.
Technical Outlook
Price moved above 1.5500 resistance in what seems to be a true break of the level. However, it’s very possible that today we will see a move lower, which will test the recently broken level but overall our bias remains bullish as long as the pair is trading above 1.5500 and the oscillators are not showing extreme conditions. First resistance is located at 1.5700.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so unless surprises occur, price direction will be decided by the technical factors and by the U.S. indicators.
EUR/USD
Forex News: The euro – dollar pair remained mostly unchanged yesterday although U.S. Industrial Production data was worse than anticipated. Draghi’s speech didn’t have the expected impact and the market showed just a mild reaction
Technical Outlook
Price remained very close to the 50 period Exponential Moving Average and trading was mostly flat yesterday. This means that the next direction is hard to anticipate but also that a strong move is building up pressure. Until the expected breakout occurs our bias is neutral; the first resistance is located at 1.1280 and support at 1.1100.
Fundamental Outlook
The German ZEW Economic Sentiment is released at 9:00 am GMT, showing the opinions of about 275 German investors and analysts about a 6 month outlook for the economy. Usually this survey triggers strong movement and numbers above the forecast 37.5 can strengthen the euro.
The US Dollar will be affected by the Building Permits which are released at 12:30 pm GMT and are expected to show a value of 1.11M. Numbers that surpass expectations suggest a thriving economy, especially in the construction sector.
GBP/USD
Yesterday the pair returned to test the level at 1.5500 and then bounced higher in the afternoon, turning previous resistance into support.
Technical Outlook
Now the level at 1.5500 has turned into support and we can expect the pair to continue higher from here; however, the Stochastic and the Relative Strength Index are bearish, hinting that moves lower can still occur. If 1.5500 is broken, the first interest zone is located near the 50 period Exponential Moving Average and to the upside, first minor resistance is located around 1.5600.
Fundamental Outlook
British inflation is the day’s main market mover: the Consumer Price Index (main gauge of inflation) is released at 8:30 am GMT and is expected to show a change of 0.1% compared to the previous -0.1%. Higher values usually strengthen the Pound and drive the pair higher.
Technical Outlook
Price moved below 1.1280 after initially climbing above the level in the early parts of yesterday’s trading session; this shows euro weakness and hints about a drop. The 50 period Exponential Moving Average is the first barrier that needs to be surpassed by the bears, followed by the support at 1.1100; however, today’s price action will be driven by the Fed events and we are likely to see choppy movement until these are released.
Fundamental Outlook
We have a big day ahead as the Fed will announce their interest rate decision at 6:00 pm GMT and Fed Chair Janet Yellen will hold a Press Conference half an hour later. The rate is not expected to change from the current 0.25% but any hints about a rumored September hike will most likely generate huge movement. The Fed will also issue a statement outlining the reasons that stood behind the rate decision and the FOMC will release their Economic Projections for the next 2 years period. This cluster of events will have a deep impact on the US Dollar not only today but also for the days to come.
GBP/USD
The Pound strengthened yesterday after an initial drop and it seems most traders are uncertain about their position until the Fed makes its stance known; overall the session was bullish.
Technical Outlook
The minor resistance at 1.5600 was surpassed yesterday, making 1.5700 the next target of the pair and tilting the balance in favor of the bulls. However, this balance is very delicate because today important news releases are scheduled for both the Pound and the US Dollar. We expect a session mostly influenced by the fundamental side, with the technical being secondary.
Fundamental Outlook
At 8:30 pm GMT the Claimant Count is released, showing changes in the number of people who applied for unemployment related aid in the United Kingdom during the previous month. Lower numbers than the anticipated -12.5K are usually beneficial for the Pound because lower levels of unemployment show a thriving economy and possibly increased consumer spending in the near future. At the same time the Bank of England will make public the votes on the latest interest rate; this is a good opportunity for traders to see if any of the MPC members have changed their stance regarding a rate hike.
FOREX NEWS: US DOLLAR STRENGTH FADES AWAY AND FED’S STANCE IS NOT HELPING
EUR/USD
Forex News: Before the FOMC release, movement was choppy and no solid advances were made. The US interest rate remained unchanged and Fed Chair Janet Yellen gave no clear hints about the next hike, offering just confusing statements.
Technical Outlook
After bouncing again at the 50 period Exponential Moving Average the pair jumped on the back of Yellen’s comments and inherent US Dollar weakness. Now the resistance at 1.1280 is broken and we expect the current move to extend possibly into the key resistance at 1.1450. The oscillators are not overbought and the Dollar bulls don’t seem to have an immediate answer.
Fundamental Outlook
Today American inflation takes center stage as the Consumer Price Index is released at 12:30 pm GMT. The Fed is closely watching inflation levels to decide when the next rate hike is due, thus making the CPI a very important indicator; higher values than the expected change of 0.5% will most likely strengthen the US Dollar, taking the pair lower.
Euro area finance ministers and other personalities will attend the Eurogroup Meetings, discussing the Greek debt crisis; this can have a strong impact on euro pairs so caution is recommended throughout the day.
GBP/USD
British wages showed a 2.7% increase yesterday, driving the Pound higher early during yesterday’s session. The Dollar weakness created by the Fed events triggered another sharp rise.
Technical Outlook
Although the pair broke above 1.5800, we expect some sort of retracement which will re-test the recently broken level. This is backed by the fact that both the Relative Strength Index and the Stochastic are overbought but also because yesterday price traveled a long distance and usually after such a move a retracement is due.
Fundamental Outlook
British Retail Sales are released today at 8:30 am GMT and expected to post a change of 0.0% compared to last month’s 1.2%. Such a drop would weaken the Pound considering that sales made at retail levels represent a major part of overall consumer spending.
FOREX NEWS: THE US DOLLAR: A DEER IN THE LIGHTS OF A SPEEDING CAR?
EUR/USD
Forex News: The pair continued its climb yesterday on the back of decreased chances of a U.S. rate hike in September but also because the American Consumer Price Index failed to meet analysts’ expectations, further weakening the US Dollar.
Technical Outlook
Although we had a bullish day, the key resistance at 1.1450 wasn’t reached and now the Relative Strength Index and the Stochastic are getting close to overbought territory. This doesn’t mean that 1.1450 cannot be reached but the chances of a reversal or a deeper retracement have increased; short-to-medium term bias is bullish.
Fundamental Outlook
European finance ministers will gather today for the ECOFIN Meetings; usually the event is closed to the press but sometimes participants talk to journalists during the day and this can bring surges of volatility. Other than this, the day lacks major releases for both the euro and the greenback.
GBP/USD
British Retail Sales posted a better than expected value, which combined with disappointing U.S. data extended the gains of the Pound and generated a bullish day.
Technical Outlook
The recent climb is overextended as shown by the daily chart and by the four hour chart (the oscillators are overbought on both these time frames) so we expect price to return towards the level at 1.5800. An overbought condition of the oscillators is not a sure indication of reversal but it makes further climbs more difficult. However, keep in mind that the current bias is bullish so we might see another push north.
Fundamental Outlook
The British Public Sector Net Borrowing is released at 8:30 am GMT and is the only notable indicator for the Pound; it shows the amount of debt held by the UK public sector (a positive number means budget deficit and a negative number shows a surplus) and lower numbers are beneficial for the Pound. Today’s expected value is 10.2B (pounds) while the previous was 6.0B.
Technical Outlook
Price came in close vicinity of the 50 period Exponential Moving Average and then bounced higher but if this move doesn’t continue today, we expect the pair to move below 1.1280. First resistance is still located at 1.1450 but throughout the day the pair’s movement will be strongly affected by the Euro Summit and the technical aspect will be secondary.
Fundamental Outlook
A solution wasn’t found so far to the Greek debt issue but today another effort will be made as Eurozone leaders, including ECB President Mario Draghi and International Monetary Fund Managing Director Christine Lagarde meet for another round of discussions. Caution is recommended throughout the day or at least until a solution is agreed upon.
GBP/USD
Friday the advances of the Pound paused and we seven saw bearish price action but the pair remained above support.
Technical Outlook
Price is likely to remain between 1.5800 support and 1.5930 minor resistance for most part of the day but keep in mind that Greek talks will probably have a strong impact on the Pound-Dollar pair as well. The Stochastic and the Relative Strength Index are long overbought on a four hour chart as well as on a daily chart so we slightly favor the downside.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases today and the US Dollar will be influenced by the Existing Home Sales numbers scheduled at 2:00 pm GMT and expected to post an increase to 5.29M from the previous 5.04M. Higher numbers suggest a thriving economy and usually strengthen the greenback.
FOREX NEWS: GREEK SOLUTION IN SIGHT? EURO GETTING READY TO JUMP
EUR/USD
Forex News: Yesterday advances were made towards a solution to the Greek debt crisis but the deal wasn’t finalized. However, it is thought that the matter might be solved later this week so probably we didn’t see the biggest moves yet.
Technical Outlook
Because a clear solution wasn’t reached, the Euro-Dollar pair moved without clear direction. For the moment we have a lower high on a four hour chart and this means that a move south might be next. If this is the case, the 50 period Exponential Moving Average is the first target and support for the pair, while a break of the minor trend line will open the door for a touch of 1.1450. If substantial Greek developments hit the news, the technical aspect will become secondary.
Fundamental Outlook
At 12:00 pm GMT, FOMC member Jerome Powell will deliver a speech, and will potentially offer more hints about the Fed’s views on the next rate hike; depending on what he says, the greenback may respond strongly so use caution if trading during his speech. The US Durable Goods Orders (goods with a live expectancy of at least 3 years) are released at 12:30 pm GMT and expected to show a drop of -0.6% compared to last month’s -0.2%; lower numbers usually have a negative impact on the US Dollar.
GBP/USD
Overall the Pound had a bearish session yesterday, moving into the support at 1.5800 as part of an anticipated retracement.
Technical Outlook
The potential support level at 1.5800 is currently tested, with both oscillators descending after a long period spent in overbought territory. If support is breached, the move is likely to extend into the 50 period Exponential Moving Average but keep in mind that from a medium term perspective we are in an uptrend thus bullish action is still a clear possibility.
Fundamental Outlook
The CBI Industrial Order Expectations survey is released at 10:00 am GMT and although this is a low impact indicator, it still can have a hefty impact on the Pound if better numbers than the expected value of 1 are posted (previous -5).
FOREX NEWS: GREEK DEBT IN LIMBO. THE EURO FEELS THE CONSEQUENCES
EUR/USD
Forex News: The euro was weakened yesterday by more stalling in the Greek discussions and the US Dollar showed signs of strength although the Durable Goods Orders disappointed, thus generating a strong bearish day.
Technical Outlook
The 50 period Exponential Moving Average and the support at 1.1280 were broken decisively yesterday. As long as price remains below these technical levels, we expect the current move to continue and 1.1100 to be reached soon. Any new developments regarding the Greek crisis will have a strong impact on the euro and implicitly on the euro-dollar pair.
Fundamental Outlook
The German IFO Business Climate survey is scheduled for release at 8:00 am GMT and is expected to show a value of 108.2 compared with last month’s 108.5. This survey is derived from a large sample of about 7,000 businesses and tries to rate the relative level of business conditions in Germany, thus a higher value is considered bullish for the euro.
The United States will release the Final version of their Gross Domestic Product at 12:30 pm GMT. Although this is the least important version out of the three (Advance, Preliminary and Final), a higher value that the forecast -0.2% can strengthen the greenback considerably.
GBP/USD
Similar to the Euro-Dollar, the Cable descended for most of yesterday’s trading session, moving below 1.5800. On the lower time frames price action was choppy during the first part of yesterday.
Technical Outlook
The pair reached an important support represented by the 50 period Exponential Moving Average and is in close vicinity of 1.5700 level. The current zone is very important for medium term movement because a break would suggest that the uptrend is over and that further downside movement will follow. For now, first potential resistance is located at 1.5800.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so price direction will be determined by the technical aspect and by the U.S. GDP release.
FOREX NEWS: EUROZONE SHAKEN, THE SINGLE CURRENCY SUBMITS TO THE US DOLLAR
EUR/USD
Forex News: The Greek conundrum wasn’t solved and the euro felt the consequences, moving lower after a brief climb. The US Dollar wasn’t affected strongly by the GDP release, mostly because the figure was close to what analysts expected.
Technical Outlook
The pair remained below the 50 period Exponential Moving Average and below 1.1280 but the low established a day earlier wasn’t breached. However, we expect to see further downside movement today and a potential touch of 1.1100. As we approach the 30th of June, the technical aspect will become less important because this date represents the deadline for about 1.5 billion euros that Greece must pay to the IMF.
Fundamental Outlook
European Union heads will meet today for the European Summit in Brussels to discuss a range of measures regarding population migration policy and Britain’s desire to renegotiate the terms of their European Union membership. The Summit, but also any new developments regarding Greece, can create a choppy and difficult to trade day.
GBP/USD
Yesterday the Pound made some advances but found resistance at 1.5800 and the pair started to move south for the rest of the day.
Technical Outlook
The perfect bounce at 1.5800 turned this level into resistance and showed that the bulls have run out of steam. This also suggests that we will probably see a period of bearish price action but before that can happen, the 50 period Exponential Moving Average on a four hour chart must be broken. As long as the pair is trading below the EMA and below 1.5700 the momentum belongs to the bears and all moves up should be treated as retracements.
Fundamental Outlook
The CBI Realized Sales are released at 10:00 am GMT and expected to show a reading of 32 compared with the previous 51. Although this is considered a low-impact indicator, higher values are indicative of a healthy economy and usually strengthen the Pound. UK representatives will attend the European Summit so caution is recommended if you are going to trade Pound-related pairs today.
FOREX NEWS: EURO-DOLLAR CLINCH GOES ON. VIOLENT SCRAMBLES EXPECTED
EUR/USD
Forex News: Yesterday the pair made almost no advances as talks between Greek representatives and the country’s creditors failed to reach a solution.
Technical Outlook
The market is still waiting for Euro leaders to reach an agreement on the Greek debt crisis so the pair’s movement is incredibly choppy until that happens. The levels to watch remain 1.1280 as resistance and 1.1100 as first support; also keep an eye on the 50 period Exponential Moving Average. Our view is neutral considering the latest sideways movement.
Fundamental Outlook
Today is the second day of the European Union Economic Summit so the danger of strong moves and sharp reversals is still very real. Caution is recommended throughout the day if you are trading euro related pairs.
GBP/USD
Yesterday the Pound erased some of the losses sustained previously and the pair climbed above the 50 period Exponential Moving Average.
Technical Outlook
The four hour candle with a long upper wick suggests rejection and that the bullish climb is close to its end. If this is the case, we will see today a break of the 50 period Exponential Moving Average and of the level at 1.5700. The oscillators don’t offer solid clues about the next moves and the moving average is flat so we are mostly neutral on the pair, with a slight bearish bias.
Fundamental Outlook
Bank of England Governor Mark Carney will participate at the 2015 Conference on Inclusive Capitalism and will deliver a speech at 2:15 pm GMT. This can have a hefty influence on the Pound but the event might also go unnoticed if the speech will not touch specific topics, which are correlated to the currency market.
EUR/USD
Forex News: The trading week opened with a big gap generated by the shocking Greek decision to close banks until the results of a referendum regarding a potential separation from the EU come out.
Technical Outlook
As mentioned many times before, the technical side will be overshadowed by the Greek developments and price can shoot in any direction. The gap was closed yesterday after a failed break of 1.1000 support and the current move may extend into the 50 period Exponential Moving Average but a quick move below 1.1100 might suggest a continuation of the bearish momentum.
Fundamental Outlook
At 9:00 am GMT the Eurozone Consumer Price Index is released, showing fluctuations in European inflation; the expected change is 0.2% (previous 0.3%) and higher figures are usually beneficial for the euro, but given the current situation, the event might go unnoticed.
An American Consumer Confidence survey comes out at 2:00 pm GMT, with an anticipated figure of 97.1, better than last month’s 95.4. Because consumer confidence is tightly correlated with consumer spending, better numbers are beneficial for the US Dollar.
GBP/USD
The pair showed a bearish gap at the opening but it was significantly smaller than the one on EUR/USD and the rest of the day was characterized by indecision and choppy movement.
Technical Outlook
The bears are trying to break 1.5700 support zone for a while now, but all their efforts are quickly reversed. If this support is not broken soon, we expect a new climb above 1.5800 resistance but for now the pair is in a state of indecision and almost anything can happen. The moving average is flat, adding no clues for future price action.
Fundamental Outlook
United Kingdom’s Current Account (value difference between imported and exported goods) is released at 8:30 am GMT and expected to show a figure of -23.7B Pounds. Higher numbers usually strengthen the British currency but usually the indicator has a low impact.
FOREX NEWS: US DOLLAR BULLS SHARPEN THEIR CLAWS, STALKING A WOUNDED EURO
EUR/USD
Forex News: Trading was relatively calm yesterday, considering the current situation. The Greek conundrum remains unsolved as the deadline for a payment to the International Monetary Fund (IMF) expired at midnight on the 30th of June.
Technical Outlook
The pair climbed for an almost perfect touch of 1.1280 which has now turned into resistance once again; after this, a sharp drop followed and although the bulls tried once more to take price their way, the pair remains below the 50 period Exponential Moving Average. This type of movement suggests that we are likely to see a continued move south which can find support at 1.1100.
Fundamental Outlook
Today at 12:15 pm GMT we will get an early look into the U.S. employment situation as the ADP Non-Farm Employment Change is released. This report is put together by a privately owned company and is less important than the Government jobs data released tomorrow, but nonetheless, numbers above the forecast 219K can strengthen the US Dollar.
U.S. Manufacturing data comes out at 2:00 pm GMT in the form of a Purchasing Managers’ Index; the expected figure is 53.2 and higher numbers are indicative of increased economic activity and potentially a stronger dollar.
GBP/USD
United Kingdom’s Current Account showed a disappointing figure yesterday but the pair remained inside the 100 pip range and the choppy trading continued.
Technical Outlook
The 50 period Exponential Moving Average remains flat and the pair cannot chose a direction; some bullish action was seen yesterday but nothing significant so for the moment our view remains neutral, anticipating a breakout. The levels to watch remain 1.5800 as resistance and 1.5700 as support.
Fundamental Outlook
At 8:30 am GMT the British Manufacturing PMI comes out (leading indicator of economic health, focused on the manufacturing sector), with an anticipated value of 52.6, a slight increase from the previous 52.0. An hour later, Bank of England Governor Carney will hold a press conference discussing the BOE Financial Stability Report released at the same time. Governor’s speech and attitude can have a strong impact on the Pound so caution is recommended until the press conference is over.
FOREX NEWS: NON-FARM PAYROLLS TO MAKE OR BREAK THE US DOLLAR TREND
EUR/USD
Forex News: Overall yesterday’s trading session was bearish, with a shaken euro and a strong US Dollar on the back of better than expected ADP Non-Farm Employment data.
Technical Outlook
The pair moved below 1.1100 yesterday and now we anticipate a continuation of the bearish impulse, at least into 1.1000 support. The oscillators are not oversold, the 50 period Exponential Moving Average has a nice downwards slope and on top of that, the Eurozone is enveloped in uncertainty, given the Greek deadlock.
Fundamental Outlook
American jobs data is today’s headline and will strongly affect the US Dollar. The most important employment report – the Non-Farm Payrolls – is released at 12:30 pm GMT and expected to show 231K new jobs compared with last month’s 280K. More jobs suggest a thriving and healthy economy, with potentially increased levels of consumer spending in the near future, so a higher number is beneficial for the greenback.
GBP/USD
The speech of BOE Governor Mark Carney weakened the Pound yesterday and the pair descended below 1.5700 support, generating one of the most volatile days in recent period.
Technical Outlook
Price is finally out of the range it was trapped in for the last few days and now all things point towards a move close to 1.5500 support. However, the fact that the Stochastic and the Relative Strength Index are approaching oversold might hinder further bearish price action and might generate a climb into 1.5700. If this level is touched again, it could turn into resistance, triggering another dip.
Fundamental Outlook
At 8:30 am GMT the British Construction PMI is released, offering insights into the state of the construction sector. It acts as a leading indicator of economic health and higher values than the anticipated 56.6 have the potential to strengthen the Pound. Of course, the pair will be directly affected by the U.S. jobs data.
FOREX NEWS: GREECE IN TURMOIL AHEAD OF REFERENDUM – WEEKLY GAPS EXPECTED
EUR/USD
Forex News: The dollar was hit hard yesterday by a worse than expected value of the Non-Farm Payrolls, generating a bullish day for the pair. The Greek picture was little changed ahead of a referendum scheduled on the 5th of July.
Technical Outlook
The pair retraced into the level at 1.1100 which could turn into resistance if it will reject price today so we are dealing with a classic bounce-or-break scenario. A move lower from here would consolidate the short term downtrend the pair is in and would solidify the control of the bears. A break of 1.1100 will probably extend into the 50 period Exponential Moving Average which will offer the nearest form of resistance.
Fundamental Outlook
The Eurozone Retail Sales numbers are released at 9:00 am GMT and expected to show a change of 0.2% compared with the previous 0.7%; a higher number is beneficial for the euro under normal circumstances. The U.S. banks will be closed today in observance of Independence Day so the New York session may suffer from irregular volatility.
On the 5th of July the Greek referendum will take place so it’s very possible that Monday the market will open with a gap. We recommend to close positions at the end of today’s trading session so you don’t get caught up in the potential gap.
GBP/USD
The pound had a choppy trading session yesterday and the sole catalyst was the NFP release which weakened the American dollar, triggering a bullish impulse for the pair.
Technical Outlook
The brief move up experienced at the U.S. Non-Farm Payrolls release doesn’t change our bearish bias and anticipation that price is headed towards 1.5500. However, a move above the 50 period Exponential Moving Average on a four hour chart would invalidate this scenario, making the bias bullish again.
Fundamental Outlook
The British Services PMI is released at 8:30 am GMT, with an expected value of 57.4 but the indicator is often overlooked by market participants; however, higher numbers have the potential to strengthen the Pound.
We hope you had a profitable trading week and we wish you a relaxing weekend.
