FOREX NEWS: THE VOTE IS IN. NOW LET’S SEE THE EFFECTS
EUR/USD
Friday’s movement was jerky and irregular on the lower time frames, mostly because U.S. banks were closed in celebration of the 4th of July weekend. No significant advances were made but price slowly climbed above 1.1100.
Technical Outlook
The Greek referendum results will have a strong impact on today’s price direction so from a technical point of view we are neutral on the pair. The 50 period Exponential Moving Average represents the first resistance while support is located at 1.1000. A break followed by a successful re-test of either support or resistance will most likely result in further movement in that direction.
Fundamental Outlook
The highlight of the day (apart from any new Greek developments) is the release of the U.S. Non-Manufacturing PMI, scheduled at 2:00 pm GMT and expected to show a value of 56.5 (previous 55.7). This survey acts as a leading indicator of economic health so higher numbers usually strengthen the US Dollar.
GBP/USD
The Pound weakened Friday against the US Dollar and generated a day controlled almost entirely by the bears; however the advances were not substantial.
Technical Outlook
The pair is trading below the 50 period Exponential Moving Average and is approaching 1.5500 support zone. If today this level will be touched, we expect a bullish bounce, especially if the Stochastic and the Relative Strength Index will show oversold at the time. If the current momentum cannot be continued and instead price starts to move north, the moving average will offer the first zone of resistance.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so price direction will be driven by the U.S. survey and by the technical aspect.
FOREX NEWS: THE EURO ROLLERCOASTER IS GAINING SPEED
EUR/USD
Forex News: A resounding “No” vote cast by over 60 percent of Greek voters sent the euro tumbling down and allowed the market to open with a more than 100 pips gap. The rest of the session was characterized by indecisive movement between support and resistance.
Technical Outlook
After opening with a gap, below 1.1000 support, price returned above it and tested 1.1100 which has turned into minor resistance. The Greek crisis is far from being solved so the euro continues to be affected by any negotiations between European leaders and representatives of the Greek government; however, a strong break of 1.1100 or 1.1000 could determine an extended move in that direction.
Fundamental Outlook
European leaders will meet today in an emergency summit to try and find a solution to a potential Grexit. This will be the day’s headline and we recommend caution until the meetings are over. Of course, it is not known at the moment how much they will last.
The U.S. Trade Balance is released at 12:30 pm GMT and expected to show a value of -42.8 billion. The indicator tracks the difference in value between imported and exported goods and usually a higher number is beneficial for the US Dollar.
GBP/USD
The pair had a rather calm trading day and wasn’t much affected by the Greek referendum result. A weekly gap was seen but a lot smaller than the one on EUR/USD.
Technical Outlook
The pair is slowly heading towards the support at 1.5500 but bearish advances lack momentum and the Stochastic on a four hour chart has bounced a couple of times above oversold, indicating that some bullish movement might be next; if this is the case, the 50 period Exponential Moving Average will provide the first form of resistance. If price touches 1.5500, the chances of bullish retracements will increase.
Fundamental Outlook
At 8:30 am GMT the United Kingdom Manufacturing Production is released and expected to show a change of 0.2% compared to last month’s -0.4%; higher values are bullish for the Pound as they suggest a thriving economy. Later in the day, at 2:00 pm GMT, NIESR will release an estimate of UK’s Gross Domestic Product. Usually the accuracy of this indicator is high and so is the impact on the Pound. The previous estimate was 0.6% and higher values strengthen the currency.
FOREX NEWS: EURO TUMBLES ON GREEK CONCERN. MAJOR DOWNTREND AHEAD?
EUR/USD
Forex News: The Greek crisis is deepening and the euro is weakening, with more and more analysts considering a Greek exit from the European Union a likely scenario. Yesterday the pair traveled substantially lower and moved below support.
Technical Outlook
The zone created between 1.1000 and 1.1000 was breached successfully yesterday and under normal circumstances we would expect the current move to extend into 1.0820. However, we still recommend caution considering that any new Greek talks could strongly affect the pair’s movement, generating sharp reversals. The Stochastic is bearish but the Relative Strength Index is approaching oversold and this could trigger some bullish response.
Fundamental Outlook
The day’s main event is the release of the FOMC Meeting Minutes, scheduled at 6:00 pm GMT. The document contains the details of the FOMC’s latest meeting and usually holds clues about the next rate hike which is for now surrounded by speculation.
GBP/USD
The pair started finally to move in a more decisive way, breaking support and showing a full directional day.
Technical Outlook
Although we anticipated a touch of 1.5500 support, we didn’t think the level will be broken in the first attempt, without any sort of retracement. Now the bears are in control but a re-test from below of the recently broken level is very likely, considering that price moved an extended distance in a short while and that the Relative Strength Index has entered oversold territory.
Fundamental Outlook
The pair’s direction will be affected mostly by the technical aspect and by the FOMC Meeting Minutes as the United Kingdom didn’t schedule major news releases.
FOREX NEWS: GREECE RECEIVES A DEADLINE, BUT EURO GETS A BOOST
EUR/USD
Forex News: The day was bullish although apparently Greece received a Sunday deadline to accept the conditions of the bailout. The FOMC Meeting Minutes didn’t contain clear clues of a rate hike in 2015 and the greenback failed to make any advances against the euro.
Technical Outlook
The pair is struggling to break the resistance zone represented by the 50 period Exponential Moving Average and by the 1.1100 level but the euro remains highly affected by the Greek crisis. However, from a technical point of view, a break of this resistance area would call for further upside movement; on the other hand, a bounce lower would make 1.1000 the first target once again.
Fundamental Outlook
The day lacks major news releases, with the only notable indicator being the U.S. Unemployment Claims scheduled at 12:30 pm GMT and expected to show a number of 274K compared with the previous 281K. An increased number of unemployed individuals is considered detrimental for the US Dollar but the indicator often lacks strong impact because it is released every week and changes are not major.
GBP/USD
After a brief bullish pullback which didn’t even touch 1.5500 the pair continued to slide lower and the Meeting Minutes didn’t create a lot of movement so overall we had a bearish day.
Technical Outlook
The bearish momentum is still strong but both the Relative Strength Index and the Stochastic are deep in oversold territory and this increases the chances of a bullish pullback. However, as long as price is trading below 1.5500 and below the 50 period Exponential Moving Average, the picture remains bearish and all moves north that eventually show rejection should be treated as opportunities to sell.
Fundamental Outlook
The Bank of England will announce today at 11:00 am GMT the interest rate; however, no change is expected from the current value of 0.50% so the event may go mostly unnoticed. Of course, a surprise change would trigger strong movement.
FOREX NEWS: CURRENCY WARS – PREPARE FOR GREEK GOVERNMENT VS. EU LEADERS SHOWDOWN
EUR/USD
Forex News: The U.S. Jobless Claims showed that more people filed for unemployment related benefits, weakening the greenback and allowing the pair to move higher. Overall yesterday’s trading session was choppy and characterized by reversals on the lower time frames.
Technical Outlook
Price climbed above the 50 period Exponential Moving Average and above the resistance located at 1.1100 but immediately reversed and moved lower, showing that the bears still have underlying strength and that we might see another move below 1.1000. A move above the mentioned resistance would invalidate this scenario and make the short term picture bullish once again.
Fundamental Outlook
At 4:30 pm GMT Fed Chair Janet Yellen will deliver a public speech about economic outlook. As always, speeches of heads of central banks should be treated with caution because they can trigger sharp moves for the currency. Also, keep in mind that this weekend is very important for Greek crisis negotiations so the market may open with a gap again. It would be better if all your positions are closed before the weekend.
GBP/USD
Yesterday the pair slowly climbed but advances were not substantial and the overall bias remains bearish.
Technical Outlook
Although yesterday price climbed, we consider this just a needed retracement and we expect upside movement to be limited. The first resistance remains 1.5500 while first potential support is located at 1.5330; however, this is minor support and can be easily broken. Keep in mind that the oscillators are just moving out of oversold and this increases the chances of bullish movement.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so we expect price movement to be affected by the technical side and by the U.S. events.
EUR/USD
Forex News: Friday the euro clearly outperformed the dollar on the back of increased optimism regarding the Greek crisis. Finally a solid bailout plan was presented by the Greek Government and it seems that an accord will be reached soon; however, opinions are still divided and some voices asked for more commitment from Greece.
Technical Outlook
The euro got a boost and is now trading above the 50 period Exponential Moving Average and above 1.1100. Price action is still under the influence of the outcome of Greek talks so we expect the technical aspect to remain secondary but if Tsipras’ proposals are accepted we are likely to see further upside movement and euro strength. The levels to watch are 1.1100 as potential support and 1.1280 as first resistance
Fundamental Outlook
Today European Leaders meet to continue discussions regarding the conditions of the Greek bailout so it’s possible to see irregular volatility and sharp moves. Caution is recommended throughout the day.
GBP/USD
Similar to the euro, the pound strengthened against the greenback and moved all the way back to 1.5500 where it paused, deciding the next direction.
Technical Outlook
The pair encountered a confluence zone created by the 50 period Exponential Moving Average and the resistance level at 1.5500. Although last week ended slightly above the mentioned level, the break cannot be considered true just yet and we might see a drop form here. On the other hand, if price quickly starts to move to the upside, we are likely to see increased buying pressure and an extended move towards 1.5700.
Fundamental Outlook
Although the United Kingdom didn’t schedule major news releases, the pair’s direction will be influenced by the result of Greek talks so strong movement is a distinct possibility.
EUR/USD
Forex News: An agreement – named by some “Agreekment” – has been finally reached in the Greek debt crisis but the political environment is still shaky because now the parliaments must approve the conditions of the bailout, which are considered too harsh by some Greek officials.
Technical Outlook
After a brief climb the pair started to move south probably because the conditions imposed by the European leaders are considered too drastic. Price is now trading inside 1.1100 and 1.1000 with a bearish momentum but the next days will be still under the influence of the Greek developments. First support is located at 1.1000 and from a technical point of view, this is the next destination.
Fundamental Outlook
At 9:00 am GMT the German ZEW Economic Sentiment survey is released and anticipated to decrease from the previous 31.5 to 30.6. The survey is derived from the opinions of about 275 German analysts and investors who offer their economic outlook for the next 6 months. Usually a higher than expected number strengthens the euro, suggesting optimism and taking the pair higher.
The U.S. Retail Sales are released later in the day, at 12:30 pm GMT. Sales made at a retail level represent an important part of overall economic activity, hence a higher change than the expected 0.4% can be beneficial for the greenback.
GBP/USD
The pair had a choppy session yesterday, first moving above the 50 period Exponential Moving Average and then returning in close vicinity of the level at 1.5500.
Technical Outlook
On a four hour chart we can see a candle with a long upper wick, which is known as a pin bar and suggests rejection. On top of this clue, we have the Stochastic which has reached the 80 level, suggesting an overbought condition so we might see a drop in today’s session. For this to happen, price needs to break soon the support zone created by the moving average and by the horizontal level at 1.5500
Fundamental Outlook
British inflation data will come out at 8:30 am GMT in the form of the Consumer Price Index. The expected change is 0.1%, same as previous but a higher percentage can strengthen the Pound. The U.S. retail sales data will have a direct impact on the pair as well.
FOREX NEWS: U.S. DOLLAR HIT BY WEAK RETAIL SALES DATA. EUROZONE STILL IN LIMBO
EUR/USD
Forex News: U.S. Retail Sales showed a surprising drop yesterday, suggesting economic slowdown and weakening the US Dollar as a result. However, the pair is still ruled by indecision and most moves are quickly reversed.
Technical Outlook
After bouncing higher off of 1.1000 support, the pair is now showing bearish rejection once again. The 50 period Exponential Moving Average has pushed price lower and it looks like the next move will be a break of 1.1000 support, considering that the euro is struggling among uncertainty surrounding the Greek crisis. The Stochastic is curving upwards in oversold territory and this is a bullish sign which might hinder further downside advances.
Fundamental Outlook
Eurogroup members will meet today in Brussels, discussing the Greek situation so we may see some strong movement, depending on the decisions made during the meetings. On the dollar side, Fed Chair Janet Yellen will testify on monetary policy before the House Financial Services Committee at 2:00 pm GMT. Members of the Committee will ask unscripted questions and the dollar may react strongly to Yellen’s answers so caution is advised.
GBP/USD
Bank of England Governor Mark Carney commented yesterday that the time for a rate hike is moving closer, sending the pair on a rally above the 50 period Exponential Moving Average on a four hour chart.
Technical Outlook
The bullish sentiment generated by Carney’s comments is likely to extend the current climb into the first potential resistance which is located at 1.5700. If the move doesn’t continue, it would be a clear sign that the bulls cannot recover and that a drop is next, with the first destination being 1.5500 again.
Fundamental Outlook
Today at 8:30 am GMT British unemployment data is released in the form of the Claimant Count Change. The indicator shows changes in the number of people who filled for unemployment benefits and a higher number than the expected -8.9K is considered detrimental for the Pound. Janet Yellen’s testimony later in the day will have a direct impact on the pair.
EUR/USD
Forex News: Yesterday the pair broke support as the US Dollar strengthened due to better than expected economic data and especially the second part of the session was characterized by strong movement.
Technical Outlook
Following the rejection seen at the 50 period Exponential Moving Average, the pair dropped below the support located at 1.1000 and for now our outlook is bearish. We consider this latest break of support to be a real one, which will most likely bring in additional sellers, eventually heading towards 1.0820 key support. The technical aspect will be overshadowed today by the ECB interest rate decision and by Mario Draghi’s press conference.
Fundamental Outlook
At 11:45 am GMT the European Central Bank will announce their rate decision but no change is expected from the current 0.05%. ECB President Mario Draghi will hold a press conference at 12:30 pm GMT and will answer journalists’ questions regarding the rate and future monetary policy. Usually this press conference is a major market mover and often creates irregular volatility so caution is recommended.
Fed Chair Janet Yellen will testify before the Senate Banking Committee at 2:00 pm GMT. The topic is monetary policy so the movement created might be strong. Again, caution is recommended until the testimony is over.
GBP/USD
Yesterday we saw that more people than expected asked for unemployment related benefits in the United Kingdom and the Pound felt the consequences, weakening against an already strong dollar.
Technical Outlook
The move south comes as a retracement to the recent move up so the extent of the drop should be limited. An encounter with the 50 period Exponential Moving Average is likely to trigger a bullish bounce but take note of the position of the two oscillators which are close to overbought; this increases the chances of a touch of the moving average but does not exclude further upside action, possibly into 1.5700.
Fundamental Outlook
The United Kingdom didn’t schedule the release of any major macroeconomic indicators today so price action will be driven by the technical aspect and the U.S. events.
FOREX NEWS: U.S. INFLATION TO PUT THE US DOLLAR BACK ON TRACK FOR A 2015 RATE HIKE
EUR/USD
Forex News: As expected the European Central Bank kept the rate unchanged at record lows and the pair made another move towards the support at 1.0820. Yesterday’s session was controlled by the bears but we saw a bounce higher in its second part.
Technical Outlook
The pair is still headed towards the support at 1.0820 but the Relative Strength Index and the Stochastic are both oversold and this means that we can expect a bullish pullback before support is threatened. First resistance area is located at 1.1000 and the 50 period Exponential Moving Average but we don’t expect price to reach this zone.
Fundamental Outlook
U.S. inflation data is released today at 12:30 pm GMT in the form of the Consumer Price Index. A big change is expected from the previous 0.00% to 0.10%; if the actual value surpasses analysts’ expectations, we are likely to see US Dollar strength.
At 2:00 pm GMT the University of Michigan will release the Consumer Confidence survey which is expected to show a figure of 96.0, almost unchanged from the previous 96.1. Because consumer confidence is tightly correlated with consumer spending, higher numbers are beneficial for the greenback.
GBP/USD
Yesterday’s trading session was pretty slow and overall bearish, with no special developments. This was mostly due to the fact that no major indicators were released.
Technical Outlook
The pair completed at bearish pullback which touched the 50 period Exponential Moving Average but there is still underlying bullish pressure so we expect a bounce higher from here. The first resistance and target remains 1.5700 but a move below the moving average would invalidate this scenario, making 1.5500 the next destination. The Stochastic is coming out of overbought, with bearish momentum, supporting a move lower.
Fundamental Outlook
The U.S. releases are the only potential market movers because the United Kingdom didn’t schedule any macroeconomic indicators for today.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: TECHNICAL WARNING – KEY SUPPORT THREATENED
EUR/USD
A weak euro allowed the US Dollar to take the pair lower for the entire duration of Friday’s trading session. Support was almost touched but the market closed before it could be threatened.
Technical Outlook
Today we expect a test of the support located at 1.0820 but although price is moving south with good momentum, a bounce higher is very possible considering the position of the oscillators. Both the Stochastic and the Relative Strength Index are warning about an oversold condition so even if a break occurs, a retracement higher is likely to happen before substantial moves lower can take place.
Fundamental Outlook
Early at 6:00 am GMT the German Producer Price Index is released, showing changes in the price charged by producers for their goods. The indicator has inflationary implications but the impact is usually low, especially if the actual value is close to analysts’ prediction, which is a drop of -0.1% compared with the previous 0.0%.
GBP/USD
Friday’s trading session was choppy for the pound-dollar pair and price action was characterized by sharp reversals on the lower time frames; overall no major advances were made.
Technical Outlook
A double top has been formed at 1.5675 which has become the first resistance. This is a bearish pattern which suggests that a move lower is in order but the 50 period Exponential Moving Average also rejected price Friday. Currently price is trapped between support and resistance and a break of either 1.5675 or the moving average may trigger an extended move in that direction. Considering the double top, we favor the bearish side as long as price remains below 1.5675.
Fundamental Outlook
The United Kingdom didn’t schedule any economic releases for the day so price direction will be mainly affected by the technical aspect.
FOREX NEWS: KEY SUPPORT TOUCHED. BULLS STEP IN FOR A REVERSAL
EUR/USD
Forex News: Yesterday the pair had a slow day, mostly because the fundamental scene was calm. The German Producer Price Index came out with a value close to analysts’ expectations so the event went mostly unnoticed.
Technical Outlook
It is clear now that the level at 1.0820 is rejecting price higher but this doesn’t mean that a break is out of the question. In fact we expect price to move below the mentioned level today, but an alternate scenario would be a climb into the minor resistance located at 1.0915. Such a climb would probably clear the oversold condition of the Stochastic and Relative Strength Index and would also make future moves lower more probable.
Fundamental Outlook
The United States and the European Union did not schedule any news releases for today so we expect another session ruled by the technical aspect.
GBP/USD
Yesterday price action was mostly controlled by the bears but no major advances were made and although we saw a move below the moving average, a clear break didn’t occur.
Technical Outlook
Our bias remains bearish, anticipating a touch of 1.5500. The Stochastic and the Relative Strength Index are pointing downwards and price has touched the 50 period Exponential Moving Average several times without bouncing significantly higher. This scenario will remain valid as long as the pair is trading below 1.5675.
Fundamental Outlook
The British Public Sector Net Borrowing is the day’s only notable indicator and it’s released at 8:30 am GMT, with an expected value of 8.6 billion Pounds. The indicator tracks the difference between spending and income for the central government and a positive number shows deficit so it is usually detrimental for the currency.
FOREX NEWS: GREECE IN SPOTLIGHT AS THE PARLIAMENT VOTES ON AUSTERITY MEASURES
EUR/USD
Forex News: The pair had a bullish day yesterday, following a bounce at 1.0820 support. Overall we saw a single direction for the day, without major whipsaws.
A major role in yesterday’s climb was played by the oversold condition of the Stochastic and the Relative Strength Index but also by the strength of 1.0820 support. Now the pair is testing 1.0915 resistance and we can notice that the 50 period Exponential Moving Average is in close vicinity, heading down. This means that this confluence zone can easily push price lower if it is not broken decisively in the first attempt. A bounce lower will have 1.0820 as first target.
Fundamental Outlook
The U.S. Existing Home Sales numbers are released today at 2:00 pm GMT and expected to show a value of 5.40M compared with the previous 5.35M (annualized values). If more houses are sold, the economy is usually thriving and this has a positive impact on the US Dollar.
The Greek Government will vote today whether they accept or not a second package of conditions in order to receive further financial aid. The exact time of the vote is not known but the result can have a strong impact on the euro.
GBP/USD
The Pound had a slow day, with choppy price action. The Public Sector Net Borrowing matched analysts’ expectations and the event did not create a lot of volatility.
Although the pair remained below the 50 period Exponential Moving Average, movement is slow and inconsistent, without clear direction but we still anticipate a move into 1.5500 which will be probably followed by a bounce higher. If the pair picks up speed and breaks support decisively, it is likely that more sellers will join and take price even lower.
Fundamental Outlook
The Bank of England will release at 8:30 am GMT the breakdown of the votes on the latest interest rate decision. This is a good opportunity for traders to see if any of the members of the Monetary Policy Committee have changed their stance on a potential rate hike but usually the event doesn’t create strong impact unless one or more members had a change of opinion.
FOREX NEWS: US DOLLAR RECOVERS LOSSES, BREAKS SUPPORT
EUR/USD
Forex News: Bullish price action continued yesterday and the pair moved above immediate resistance; however, after signs of rejection, price returned below resistance, proving the break was false.
At the time of writing the Greek vote results are still not known and these could have an effect on price direction. Nevertheless, the pair showed signs of rejection at the 50 period Exponential Moving Average and moved below 1.0915, suggesting that we are going to see another attempt to break 1.0820. The oversold condition of the two oscillators was cleared by the latest climb and even more, now they are headed south, supporting a move lower.
Fundamental Outlook
Today is another slow day for both the euro and the dollar, with the only notable indicator being the U.S. Unemployment Claims released at 12:30 and expected to show a number of 279K, close to last week’s 281K. Less unemployed people suggest a thriving economy, with increased levels of consumer spending and a potentially stronger currency.
GBP/USD
Yesterday the Pound bulls took price above the 50 period Exponential Moving Average, proving the down move was exhausted.
The pair is still trading below 1.5675 but lacks volatility and clear direction so, although the latest impulse is bullish we cannot predict a continuation or a break of the mentioned resistance. However, if a touch occurs, we expect a bounce lower into the 50 period Exponential Moving Average. A break of 1.5675 should be confirmed by a re-test before it can be deemed real.
Fundamental Outlook
The British Retail Sales numbers come out today at 8:30 am GMT, with an expected change of 0.4% compared with the previous 0.2%. Because the retail sector represents a major part of overall consumer spending, which in turn accounts for a hefty part of the entire economic activity, a higher than anticipated change could strengthen the Pound.
FOREX NEWS: US DOLLAR SHOWS STRENGTH ACROSS THE BOARD. EURO STILL STUBBORN
EUR/USD
Forex News: Price action was mostly bullish yesterday and the pair climbed again above resistance. The Greek Parliament passed the vote on the bailout program, a fact which probably strengthened the euro.
Technical Outlook
The pair moved quickly above 1.0915 and reached 1.1000 before retracing lower but now both oscillators are in the upper part of their respective range and this suggests that a drop will follow. If 1.1000 can be broken, more buyers will join the short term uptrend but the extent of the climb should be limited. To the downside the 50 period Exponential moving Average represents the first support.
Fundamental Outlook
Early at 7:30 am GMT the German Manufacturing Purchasing Managers’ Index is released, with an anticipated value of 52.1, a small increase from the previous 51.9. This is a leading indicator of economic health and usually higher numbers are beneficial for the euro.
Later in the day, at 2:00 pm GMT the U.S. New Home Sales numbers come out, showing the annualized number of houses sold during the previous month. The forecast is 543K and higher numbers show increased economic activity, thus a stronger greenback.
GBP/USD
British Retail Sales disappointed by showing a lower than expected value and the Pound reacted accordingly, weakening and allowing the pair to move into support.
Technical Outlook
After almost touching 1.5675, the pair dropped sharply towards 1.5500, breaking the 50 period Exponential Moving Average in the process. Now we have a triple top at 1.5675, which is a strong bearish pattern and the oscillators have started to move south with good momentum. All these factors suggest that a break of 1.5500 is likely to happen today but a bounce higher could mean the start of a ranging period.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so the focus will be on the technical aspect and on the US housing data.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: TREND LINES, RESISTANCE AND THE STORY OF THE DOLLAR
EUR/USD
Forex News: The German Manufacturing PMI failed to meet analysts’ expectations Friday, weakening the euro but the US Dollar also took a blow from a worse than expected number for the New Home Sales. This created mixed price action, without clear direction.
Technical Outlook
Price moved higher soon after touching the 50 period Exponential Moving Average but didn’t break the resistance located at 1.1000. If a break occurs today, the next potential resistance is represented by the bearish trend line seen on the chart above, while support is provided by the moving average and the level at 1.0915. Considering the position of the Stochastic, we slightly favor a move south but a break of 1.1000 would invalidate this scenario.
Fundamental Outlook
The German IFO Business Climate survey is released at 8:00 am GMT. This indicator gauges the confidence of about 7,000 businesses and it’s highly respected due to its large sample size; higher values than the anticipated 107.6 can strengthen the euro under normal circumstances.
At 12:30 pm GMT the U.S. Durable Goods Orders are released and expected to show a change of 3.2% compared with the previous -2.2%. Such a big increase would be beneficial for the US Dollar, taking the pair lower.
GBP/USD
The pair had a slow session Friday, moving below and then back above support. This back and forth movement is likely to come to an end today, revealing if we are dealing with a bounce or break of support.
Technical Outlook
Price is still below the 50 period Exponential Moving Average, which is a bearish sign but the sellers are having difficulties breaking 1.5500 support. The Stochastic on a four hour chart is oversold and appears to be crossing upwards and this suggests that we will see some sort of move north but the extent is uncertain considering the way the pair has been moving lately. We favor the short side if the pair shows rejection at the moving average or if 1.5500 is broken decisively.
Fundamental Outlook
The pair’s direction will be affected by the American release and by the technical aspect because the United Kingdom didn’t schedule important news releases for today.
FOREX NEWS: US DOLLAR TAKES HEAVY LOSSES. PREPARE FOR RETRACEMENTS
EUR/USD
Forex News: Yesterday the pair moved comfortably to the upside and almost the entire session was controlled by the bulls despite a better than anticipated reading for the U.S Durable Goods Orders.
Technical Outlook
The bearish trend line was easily broken on the first attempt but now both the Relative Strength Index and the Stochastic are close to overbought, increasing the chances of a bearish retracement which would be normal after such a strong climb. The bullish trend line seen on the chart above can offer support and the same is true for the recently broken bearish trend line. The resistance at 1.1100 is not yet broken and this also increases the chances of pullbacks.
Fundamental Outlook
The U.S. Consumer Confidence survey is released today at 2:00 pm GMT and is expected to show a value of 100.1, lower than the previous 101.4. If consumers are confident regarding economic conditions, they are likely to spend more, hence increasing the level of retail sales, which account for a hefty part of the economy, so a higher value for today’s survey is likely to strengthen the US Dollar.
GBP/USD
The pair had a slow start of yesterday’s trading session, moving mostly sideways for the better part of the day. However, in the afternoon GMT we saw a strong climb above the moving average.
Technical Outlook
It is now clear that 1.5500 is strong support, considering the latest bounce but the 50 period Exponential Moving Average is still not broken decisively. If this happens today, the first destination is likely 1.5675; the Stochastic and the Relative Strength Index are both moving north (the Stochastic is exiting oversold) and this can generate bullish momentum.
Fundamental Outlook
At 8:30 am GMT the British Preliminary Gross Domestic Product is released and anticipated to show a change of 0.7% compared with the previous 0.4%. This is the main gauge of overall economic performance and a stronger economy can bring a stronger currency so look for the Pound to climb if the GDP increases.
FOREX NEWS: FED RATE STATEMENT – A STORM IN THE MAKING
EUR/USD
Forex News: Yesterday the pair retraced lower, as anticipated after a big climb but in the afternoon a worse than expected value of the U.S. Consumer Confidence indicator weakened the dollar.
Technical Outlook
The bearish pullback brought the pair close to the intersection of the two trend lines. This zone of confluence (1.1000 support and the 50 period Exponential Moving Average are also near current price) is likely to push the pair higher but the Stochastic is just exiting overbought, heading down so the picture is unclear. The Fed Rate Statement issued today will probably decide the next direction.
Fundamental Outlook
At 6:00 pm GMT the most anticipated event of the week takes place: the Fed will make public their interest rate decision and will issue a statement outlining the reasons that determined the decision. No change is expected (currently <0.25%) but any hints about the timing of a potential rate hike can strongly affect the US Dollar.
GBP/USD
The British Gross Domestic Product showed that the economy is expanding and this strengthened the Pound early yesterday morning, generating a bullish day.
Technical Outlook
The pair is now standing above the 50 period Exponential Moving Average but it doesn’t show a lot of bullish momentum: the candles have upper shadows (wicks) and the Stochastic is crossing downwards. Also the 50 period EMA is mostly flat so a break above it doesn’t necessarily mean that price will continue in that direction. Our view is neutral on the pair until a clear direction is established.
Fundamental Outlook
The price action will be influenced today by the Fed Statement because the United Kingdom didn’t schedule major news releases.
FOREX NEWS: U.S. ECONOMY IMPROVES BUT STILL NO DATE FOR A RATE HIKE
EUR/USD
Forex News: Fed policy makers said yesterday that the house and labour markets are showing signs of improvement but a date for a potential rate hike was not announced; the signals given by the Fed were mixed and the pair moved erratically as a result.
Technical Outlook
Before the Fed rate statement the Dollar showed signs of strength but the release created just irregular movement without clear direction. The bullish trend line was broken but the four hour candle is showing long wicks in its upper and lower side, which is a sign of indecision. This makes us consider that a clear direction will only be established once 1.1000 support and the 50 period Exponential Moving Average are broken to the downside; on the other hand, a break of 1.1100 would suggest further bullish movement.
Fundamental Outlook
The main event of the day is the release of the United States Advance Gross Domestic Product scheduled at 12:30 pm GMT and expected to show a change of 2.6%, a big increase from the previous -0.2%. This is the most important version of the GDP which is the primary gauge of an economy’s performance so a big increase such as anticipated will most likely strengthen the greenback, taking the pair lower.
GBP/USD
Yesterday the pound-dollar pair had another encounter with resistance but this resulted in another bounce lower at the time of the Fed statement release.
Technical Outlook
This is the fourth time the pair tries to break 1.5675 resistance and the attempt results in a bounce lower. It’s a clear sign that we are going to see bearish movement during the days to come, with the 50 period Exponential Moving Average being the first target; if this support can be broken , then price will be headed towards 1.5500. Both the stochastic and the Relative Strength Index are curving downwards, supporting such a move.
Fundamental Outlook
Once again the Pound has a slow day in terms of macroeconomic releases so price direction will be dictated by the technical aspect and U.S. releases.
FOREX NEWS: DOLLAR FLEXES ITS MUSCLES, SHOWS STRENGTH ACROSS THE BOARD
EUR/USD
Forex News: The U.S. Advance GDP showed an improvement of 2.3% which is lower than analysts’ forecast of 2.6% but still way above the previous -0.2%. This shows that the American economy is improving and takes the Fed closer to a rate hike, strengthening the US Dollar in the process.
Technical Outlook
The bullish trend line is now clearly broken and the pair is trading below the 50 period Exponential Moving Average and below 1.1000 so the control definitely belongs to the bears and we are likely to see a continued move to the downside, aiming for 1.0820. The Stochastic and Relative Strength Index are approaching oversold and although momentum is bearish, we may see some bullish retracements.
Fundamental Outlook
Very important European inflation data is released today at 9:00 am GMT in the form of the Consumer Price Index. ECB’s target for inflation is just below 2.0% so the current 0.2% is very low and another decrease could severely weaken the euro. No change is expected for today’s release but look for strong moves if a different value is posted.
GBP/USD
Although the US Dollar made hefty advances against most other currencies, the Pound was the least affected and the pair had mixed movement yesterday.
Technical Outlook
The 50 period Exponential Moving Average is still below price and moving slightly upwards but the Stochastic has crossed bearish, indicating that we may see movement south today. Strong resistance still sits at 1.5675 and we expect moves lower if price will touch it. A break of the moving average will open the door for a move into the support located at 1.5500.
Fundamental Outlook
The entire week has been slow for the Pound from a fundamental point of view and the same is true for today as the United Kingdom didn’t schedule any major news releases.
We hope you had a profitable trading week and we wish you a relaxing weekend.
