FOREX NEWS: EURO–DOLLAR ROLLERCOASTER IN FULL SWING, POUND FLAT
EUR/USD
Forex News: European inflation remained unchanged Friday but the Core version of the CPI, which excludes tobacco, alcohol, energy and food from calculation, showed an increase from 0.8% to 1.0%. This was the main reason that contributed to the latest climb.
Technical Outlook
After touching 1.1100 resistance the pair showed clear rejection and moved back below 1.1000; this suggests that we will see further bearish movement but lately the pair lacks clear direction and most moves are quickly reversed. If the 50 period Exponential Moving Average can be broken early in the day, the pair will head towards the first support, located at 1.0915. Immediate resistance sits at 1.1000 followed by 1.1100.
Fundamental Outlook
At 2:00 pm GMT the United States will release the Manufacturing PMI which is a survey of about 400 purchasing managers who are asked to give their opinion on the health of the Manufacturing sector. The expected figure is 53.6, almost unchanged from the previous 53.5 and a higher value is beneficial for the US Dollar.
GBP/USD
The Pound-Dollar pair continued to move sideways Friday, without making any substantial advances and bouncing between support and resistance.
Technical Outlook
Price cannot break the 50 period Exponential Moving Average to the downside or 1.5675 resistance level to the upside and is trapped between them. Friday we saw the 5th bounce at 1.5675 so it’s clear that this level has great importance for short to medium term price action and once/if broken, we will see a continued move north. On the other hand, a move below the moving average will open the door for 1.5500 support but until one of these events occurs, our bias is neutral.
Fundamental Outlook
British Manufacturing data is released at 8:30 am GMT in the form of the Purchasing Managers’ Index which is expected to show a slight increase from the previous 51.4 to 51.6. This is a survey which acts as a leading indicator of economic health so higher values can generate Pound strength and a move higher for the pair.
Forex News: The euro-dollar had a very slow day, without substantial advances to either side. The U.S. Manufacturing PMI showed a disappointing value and this reversed a previous move south.
Technical Outlook
Price remained below the 50 period Exponential Moving Average and below 1.1000 resistance so we still anticipate a touch of 1.0915 minor support. A strong move above the types of resistance we mentioned would invalidate such a scenario. The oscillators don’t show an extreme condition so they don’t offer much information about future direction.
Fundamental Outlook
Today there are no major macroeconomic indicator releases so price action will be influenced mainly by the technical aspect. The only notable event is the release of the U.S. Factory Orders, scheduled at 2:00 pm GMT and expected to show an increase of 1.8% compared with the previous -1.0%. More orders suggest increased economic activity and a stronger dollar.
GBP/USD
The British Manufacturing PMI showed a value close to analysts’ forecast and the event went mostly unnoticed. The pair moved below the moving average and reversed direction during the second part of yesterday.
Technical Outlook
The pair is still in indecision mode, trading between the 50 period Exponential Moving Average and 1.5675 resistance. Even if yesterday we saw an attempt to break out of the range, price returned above the moving average so the picture remains mixed, without clear direction until a true breakout occurs.
Fundamental Outlook
The Pound will be affected by another survey today: the Construction PMI which is scheduled at 8:30 am GMT and expected to show a value of 58.6, slightly better than the previous 58.1. The survey is derived from the opinions of purchasing managers from the construction sector and acts as a leading indicator of economic health so higher numbers are beneficial for the Pound.
FOREX NEWS: FIRST LOOK AT U.S. EMPLOYMENT DATA – A MUCH NEEDED CATALYST
EUR/USD
Forex News:The pair remained in a small range yesterday, with indecision present, mostly because the fundamental scene was quiet, without major news announcements.
Technical Outlook
Price didn’t manage to pick a direction and remained below the 50 period Exponential Moving Average, showing small signs of rejection. The first target remains 1.0915 but the market is characterized by indecision so a move to the upside is just as possible as one to the downside. We expect strong moves after this choppy period but for these moves to occur, the market needs a catalyst which will probably be the U.S. jobs data that comes out later in the week.
Fundamental Outlook
Before the U.S. Government will release the NFP data, we must focus on the Non-Farm Employment Change report issued by Automatic Data Processing Inc., which is a privately owned company. The report comes out at 12:15 pm GMT and is expected to show a number of 216K, lower than last month’s 237K. Although this report doesn’t have the huge impact of the one released Friday, we may still see strong moves to the upside for the US Dollar if a higher value is posted.
GBP/USD
Once more price moved below the moving average but the pair completely lacks direction lately so we cannot consider this move a true break.
Technical Outlook
Our bias remains neutral until the pair can break away from the 50 period Exponential Moving Average. Once that happens, the levels of importance are 1.5500 as support and 1.5675 as resistance and a break of either one would suggest that a new trend is in place.
Fundamental Outlook
The Services PMI is released at 8:30 am GMT, offering insights into the opinions of Purchasing Managers about the health of the British Services sector. Higher values than the forecast 58.1 are usually beneficial for the Pound but the release often has just a mild impact.
FOREX NEWS: BRACE FOR BANK OF ENGLAND’S SUPER THURSDAY!
EUR/USD
Forex News: The pair moved below support but the US Dollar was negatively affected by a disappointing value of the ADP Non-Farm Employment report which generated a bullish move. However, this move was quickly erased by better than expected US Non-Manufacturing data.
Technical Outlook
Price broke and then re-tested from below the support at 1.0915 which can be now considered resistance. The 50 period Exponential Moving Average is sloping downwards, suggesting bearish momentum and making 1.0820 the first target. It is important to note that the Stochastic is below the 20 level, showing an oversold market and the Relative Strength Index is also near its own oversold level; the position of the oscillators could be an early indication of a move north.
Fundamental Outlook
The German Factory Orders are released at 6:00 am GMT and expected to show an increase of 0.4% compared with the previous -0.2%. The indicator has a medium impact but nonetheless, a higher figure can strengthen the euro, taking the pair higher.
GBP/USD
Choppy movement continued yesterday and although we saw price move below the moving average, this was quickly reversed and the pair is now trading above the 50 EMA.
Technical Outlook
Price remains trapped between 1.5675 resistance and the 50 period Exponential Moving Average and our bias remains neutral. Today is an extremely important day for the Pound – named by some Super Thursday – so we expect very strong movement and a clear breakout from the range the pair has been trading in. The levels to watch remain 1.5675 as resistance and 1.5500 as support.
Fundamental Outlook
The Bank of England has prepared a cluster of events: at 11:00 am GMT the Inflation Report is released, containing economic outlook and inflation expectations for the next two years. At the same time the Official Bank Rate (no change expected) is announced and for the first time, the BOE will also release the minutes of the meeting and the breakdown of the members votes. At 11:45 am GMT Governor Mark Carney will hold a press conference discussing the Inflation Report.
The final British event of the day is the release of the NIESR Gross Domestic Product estimate, scheduled at 2:00 pm GMT. The previous value is 0.7% and numbers above it can strengthen the Pound. All these events will generate strong moves on Pound pairs so caution is recommended.
FOREX NEWS: ALL EYES ON THE NFP – THE WEEK’S FINAL MARKET-SHAKER
EUR/USD
Forex News: The pair had another mixed session yesterday, mostly because both currencies lacked major news announcements. The German Factory Orders showed a higher than anticipated increase and the euro was positively affected but the move was not substantial.
Technical Outlook
Price is in close vicinity of 1.0915 level which is now minor resistance but the Stochastic and the Relative Strength Index are starting to move to the upside, increasing the chances of bullish price action. The 50 period Exponential Moving Average is moving downwards and can offer resistance if touched from below. The first support and target is still 1.0820 but a lot will depend on the U.S. jobs report released today.
Fundamental Outlook
At 12:30 pm GMT the most important U.S. employment data comes out in the form of the Non-Farm Payrolls. The indicator tracks changes in the number of new jobs created during the previous month and has a huge impact on the greenback almost always. A higher number than the anticipated 220K shows that more people are employed and suggests an increase of consumer spending in the near future, strengthening the US Dollar.
GBP/USD
The Bank of England kept the interest rate unchanged as expected and only one of its policymakers voted for a rate increase. Most analysts expected that 2 or even 3 members of the Monetary Policy Committee would vote for a rate hike so the single vote change was viewed as bearish by investors.
Technical Outlook
The Pound dropped sharply yesterday and this could mean that the ranging period has come to an end. The first obstacle remains 1.5500 which was breached yesterday but a clear break has yet to occur. The oscillators are headed downwards, without being oversold so we are likely to see further bearish movement but a lot will depend on the U.S. jobs data released today.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so all eyes will be on the American Non-Farm Employment Change report which will affect all dollar pairs.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: NFP REPORT SPLITS THE MARKET IN TWO. WHAT ARE THE EFFECTS?
EUR/USD
Forex News: Friday was all about the U.S. jobs report which was viewed as bullish for the dollar by some but the value was actually lower than analysts expected. This created a huge whipsaw and price dropped sharply for more than 100 pips before erasing all of the move.
Technical Outlook
On a four hour chart we can see strong bullish rejection but the huge whipsaw seen Friday could also mean that a clear direction is not yet established. The Stochastic reached overbought, the Relative Strength Index is moving upwards without being overbought and the 50 period Exponential Moving Average is just flat so all this, combined with Friday’s whipsaw makes our bias neutral. The levels to watch are 1.0915 as support and 1.1000 as resistance; minor support can be provided by the 50 EMA.
Fundamental Outlook
Dennis Lockhart, who is a FOMC voting member and President of the Federal Reserve Bank of Atlanta, will deliver a speech at 4:25 pm GMT and audience questions are expected. This could be a good opportunity to gain insights into a possible rate hike later this year so the speech could have an impact on the US Dollar but could also go mostly unnoticed. Nonetheless, this is the only event of the day and should be treated with caution.
GBP/USD
After the initial move down generated by the NFP report, the pair retraced higher but the Pound could not erase all the losses and instead stopped below 1.5500.
Technical Outlook
The fact that the pair stopped just below 1.5500 can be attributed to the market closing for the end of the week or it could mean that 1.5500 was successfully broken to the downside and price returned to re-test the previous support which can now become resistance. The 50 period Exponential Moving Average is headed downwards and the latest momentum is bearish so we are likely to see a continued move south today.
Fundamental Outlook
There are no major news releases scheduled today by the United Kingdom so price direction will be mostly influenced by the technical side of the market.
FOREX NEWS: UNDERLYING US DOLLAR STRENGTH CRAFTS REVERSALS
EUR/USD
Forex News: The market slowed down considerably yesterday as no major indicators were released. A bullish bias was seen throughout the day, with price finding support at the four hour 50 period Exponential Moving Average.
Technical Outlook
The pair is bouncing off of the 50 period Exponential Moving Average, continuing the momentum started Friday by the NFP release but the Stochastic is showing signs of overbought and 1.1000 resistance is sitting in front of rising prices. We could easily see a reversal here and a new move below 1.0915 but the movement of the pair clearly lacks strong direction so a break of 1.1000 is just as possible. If this is the case, 1.1100 will become first resistance and target.
Fundamental Outlook
The most notable event of the day is the release of the German ZEW Economic Sentiment which is a survey of about 275 German professional investors and analysts who are asked to give a 6-month outlook of the German economy. The scheduled time is 9:00 am GMT and the expected figure is 31.1, better than the previous 29.7; if the forecast comes true, we are likely to see euro strength and a consequent move higher.
GBP/USD
After a flat period early morning, the pair started to move to the upside so the bears failed once again to maintain their pressure and to keep price below 1.5500.
Technical Outlook
The pair is currently testing the 50 period Exponential Moving Average on a four hour chart and both oscillators are moving upwards. This means that if we see a break of the moving average, price is likely to head higher for the entire day. If the pair stalls at the current resistance (50 EMA), expect a drop close to 1.5500 support.
Fundamental Outlook
There are no major releases on the schedule for today so the main focus of traders worldwide will be on the technical aspect.
FOREX NEWS: GREECE IN THE SPOTLIGHT AGAIN, BRITISH UNEMPLOYMENT PUSHES THE POUND
EUR/USD
Forex News: Greece and its creditors reached a deal to unlock about 85 billion euros in order to meet the deadline for an August 20 payment. This had a positive influence on the euro and the pair climbed for almost the entire day despite a disappointing German ZEW figure.
Technical Outlook
The pair was bullish for most of the day and the resistance at 1.1100 was almost touched; however the bulls ran out of steam before that could happen and now we see signs of rejection. The last candle has a long upper wick and the Stochastic has been overbought for the entire week so we expect at least a retracement today if not a reversal. If 1.1100 is not broken quickly, we anticipate a drop below 1.1000, which will find support at the 50 period Exponential Moving Average.
Fundamental Outlook
Today the Greek Parliament will vote on whether they accept or not the measures imposed in order to receive a third bailout. The consensus is the Greek Parliament will pass the vote but surprises can always occur so caution is recommended. The exact time of the vote is not yet known.
GBP/USD
Yesterday the pair moved mostly sideways after a late evening climb the day before. Price remains without clear direction and all moves continue to be reversed.
Technical Outlook
Price action is choppy and the pair is just bouncing without clear direction. Now price is above the 50 period Exponential Moving Average but the Stochastic appears to be crossing downwards, above its 80 level which shows overbought so it is very possible to see another move below the moving average and into the support at 1.5500. The most important British data of the week is released today and this is likely to decide the next direction.
Fundamental Outlook
At 8:30 am GMT the Average Earnings Index is released, showing the changes in the pay for labor. A higher pay usually has inflationary implications because the additional costs paid by the employers will be eventually transferred to the goods and services they sell. The expected change is 2.8%, lower than the previous 3.2% and higher than expected values are considered beneficial for the Pound.
At the same time the Claimant Count Change is released and expected to show a number of 1.4K while the previous was 7.0K. The indicator shows the change in the number of unemployed people and a higher figure is detrimental for the Pound because unemployment generates a decrease in consumer spending.
FOREX NEWS: CAN US RETAIL SALES BRING FORCE TO A BATTERED US DOLLAR?
EUR/USD
Forex News: The single currency had a tremendous day yesterday, climbing strongly for almost the entire session and breaking decisively the resistance zone created between 1.1000 and 1.1100.
Technical Outlook
The short term momentum is clearly bullish and we expect a continuation of yesterday’s move at least until 1.1215 minor resistance is touched. It is important to note that the Stochastic and the Relative Strength Index are both deep in overbought territory and this suggests that a retracement is due, especially because the pair traveled a long distance in a short while.
Fundamental Outlook
The US Dollar will be strongly affected today by the release of the U.S. Retail Sales scheduled at 12:30 pm GMT. The expected change is 0.5% compared with the previous -0.3% and such an increase would benefit the dollar because sales made at retail levels represent the biggest part of consumer spending which in turn accounts for the major part of economic activity.
GBP/USD
Yesterday’s British unemployment report showed less people without jobs in the U.K. but average earnings decreased. This created some mixed movement at the time of the release but the bulls quickly took over and drove the pair higher.
Technical Outlook
Recent price action shows that the 50 period Exponential Moving Average is offering good support and this suggests that we could see a touch of 1.5675. If this level is touched, we expect a bearish pullback, considering that the Stochastic has already crossed bearish and is moving down after a visit above its 80 level. A move above 1.5675 should be followed by a re-test from above to confirm we are dealing with a real breakout.
Fundamental Outlook
The United Kingdom didn’t schedule important macroeconomic indicator releases for today so the pair’s direction will be influenced by the U.S. Retail Sales and the technical aspect.
FOREX NEWS: GERMAN GDP, U.S. CONSUMER CONFIDENCE TO TILT THE BALANCE OF POWER
EUR/USD
Forex News: For the most part of yesterday’s trading session the pair moved south, retracing after a bounce at 1.1215. The U.S. Retail Sales came out with the anticipated value which was higher than the previous and this gave a boost to the dollar.
Technical Outlook
An overbought Stochastic and Relative Strength Index combined with the resistance level at 1.1215 pushed the pair lower after a near perfect bounce. Now the pair is re-testing 1.1100 which could turn into support and push price higher; if this is the case, we are likely to see another touch of 1.1215, otherwise the 50 period Exponential Moving Average will become the first target of the day.
Fundamental Outlook
The German Preliminary Gross Domestic Product is released at 6:00 am GMT and will probably be the day’s main market mover. This is the primary gauge of an economy’s performance and because the German economy is one of the most important in the EU, the release will have a strong impact on the euro. Higher values than the expected 0.5% (previous 0.3%) are beneficial for the euro and can take the pair higher.
At 2:00 pm GMT the University of Michigan will release their Consumer Sentiment survey which is anticipated to post a value of 93.5, slightly better than the previous 93.1. If consumers are confident in economic conditions, they are likely to spend more and this boosts economic activity, strengthening the US Dollar.
GBP/USD
Yesterday the pair didn’t reach resistance and the solid US retail sales helped bring price lower, into the 50 period Exponential Moving Average.
Technical Outlook
Although other pairs move strongly, the pound-dollar lacks clear direction and now has retraced once again to the 50 period EMA. If price will move below this form of support, the ranging period will continue; otherwise the pair will be headed towards the resistance at 1.5675.
Fundamental Outlook
Price action will be determined by the technical aspect and the U.S. indicators because 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.
Forex News: Friday we saw hints that the bullish move is exhausted and the pair finished the trading session with a hefty drop. German GDP showed improvement but was still lower than analysts expected, contributing to euro weakness.
Technical Outlook
The pair made a lower high and is now threatening 1.1100 from above. This is not a re-test of recently broken resistance because that already occurred so instead it’s an attempt of the bears to break support and regain control. The Stochastic and the Relative Strength Index are moving downwards after being previously overbought and this increases the chances of a bearish break. If 1.1100 support is surpassed, the immediate target will be the 50 period Exponential Moving Average where we might see a bounce higher.
Fundamental Outlook
The day ahead is slow in terms of economic announcements, with the only notable event being the release of an U.S. Housing Market Index. About 900 home builders are asked to offer their outlook on home sales and higher than anticipated numbers can strengthen the US Dollar but the indicator doesn’t have a huge impact usually. The time of the release is 2:00 pm GMT and the expected value is 62.
GBP/USD
The Pound had a bullish day Friday but lately the pair lacks clear direction and volatility. The U.S. Consumer Sentiment survey showed a disappointing value, contributing to the pair’s climb.
Technical Outlook
Although the control doesn’t clearly belong to either side, the latest impulse is bullish, so the immediate target is the resistance at 1.5675. This level proved strong in the past so a real break to the upside would probably bring in more buyers and would open the door for a move into 1.5800. A bounce at this level could mean that price will head towards the 50 period Exponential Moving Average.
Fundamental Outlook
The United Kingdom didn’t schedule major economic news announcements for the day, thus price direction will be influenced by the U.S. Housing Index and by the technical side of the market.
FOREX NEWS: POUND TRAPPED. BRITISH INFLATION TO STAGE A BREAKOUT
EUR/USD
Forex News: The U.S. Housing Market Index showed a value close to analysts’ expectations yesterday so the US Dollar wasn’t heavily affected but nonetheless the pair moved below 1.1100, showing bearish pressure.
Technical Outlook
Now that the pair moved bellow 1.1100 and showed that the bulls have run out of steam, we expect price to head towards the next level of interest which is located at 1.1000. For this to happen, the 50 period Exponential Moving Average must be broken decisively; the Stochastic shows good momentum, although it is approaching oversold and this supports a continued bearish move.
Fundamental Outlook
The U.S. Building Permits are released today at 12:30 pm GMT and expected to show 1.21M compared to the previous 1.34M (annualized numbers). Since every new building begins with obtaining a permit, this indicator is a good gauge of activity in the construction sector so higher numbers will most likely strengthen the US Dollar.
GBP/USD
Yesterday the United Kingdom didn’t release any macroeconomic indicators but we saw a bounce at resistance and clear signs that the pair is still not ready to start moving strongly in a direction.
Technical Outlook
The resistance at 1.5675 proved once again too strong for the bulls to break so the pair is still trapped between the mentioned level and the support at 1.5500. Usually in a ranging period, a bounce at resistance triggers a move towards the bottom of the range so we expect the current impulse to extend into 1.5500. The Stochastic is crossed bearish, supporting such a move but the 50 period Exponential Moving Average is still not broken decisively; if price will move below it without bouncing higher, the next target is 1.5500.
Fundamental Outlook
A major British indicator is released today at 8:30 am GMT: the Consumer Price Index. This is the main gauge of inflation and is closely watched by the Bank of England in order to decide when the next rate hike will occur. A higher value than the expected 0.0% will strengthen the Pound, taking the pair higher and the opposite is true for a lower value.
FOREX NEWS: U.S. CONSUMER PRICE INDEX – THE CATALYST FOR A LONG AWAITED RATE HIKE
EUR/USD
Forex News: Yesterday the dollar extended its gains against the euro and we saw a strong move below the 50 period Exponential Moving Average. The entire session was bearish, with just brief climbs.
Technical Outlook
Now the level at 1.1100 has turned into resistance once again and price is trading below the moving average on a four hour chart so the balance is tipped in the favour of the bears and we anticipate a touch of 1.1000 support. It is important to note that the Stochastic has entered oversold and is moving below its 20 level, hinting about a potential retracement to the upside. If this happens, the first resistance will be provided by the 50 EMA.
Fundamental Outlook
American inflation data is released at 12:30 pm GMT in the form of the Consumer Price Index which is expected to post a value of 0.2%, lower than the previous 0.3%. Current inflation is considered too low so an increase is viewed as beneficial for the US Dollar and could weigh a lot in the Fed’s decision regarding the next rate hike.
Later in the day, at 6:00 pm GMT the Fed will release the Minutes of their latest meeting. The document will offer insights into the reasons that determined their latest vote and clues about a potential rate change.
GBP/USD
British inflation surprisingly increased as shown by yesterday’s CPI and the Pound felt the effects immediately, strengthening and taking the pair on a bull run.
Technical Outlook
The key resistance at 1.5675 was breached once again yesterday but this time the move was a lot more convincing. Currently the pair is pulling back after the strong bullish move and this retracement must be closely watched for signs of continuation or rejection: if the pair will stall around 1.5675 we are likely to see a bounce lower but otherwise, the ranging period might be over and we will probably see a move towards 1.5800.
Fundamental Outlook
There’s nothing important on the British economic calendar for today but the US events will have a strong impact on the pair.
Forex News: Friday the euro continued its assault on the US Dollar and the pair moved significantly higher, breaking resistance and solidifying the control of the bulls.
Technical Outlook
It is clear that bulls are in control and that we are likely to see further upside movement in the days to come but for now we must note that price moved a substantial distance without showing the slightest hint of retracement. Both the Stochastic and the Relative Strength Index are deep into overbought territory and this increases the chances of bearish retracements. The first target remains the key resistance at 1.1450 but today we might see slow price action, with a bearish bias.
Fundamental Outlook
Eurozone’s Manufacturing PMI (expected 52.4) and Services PMI (expected 54) are released today at 8:00 am GMT. These surveys are based on the opinions of purchasing managers from the respective sectors and act as leading indicators of economic health so higher values are beneficial for the euro but the impact has been known to be medium to low.
GBP/USD
Friday we saw more of the same jagged and choppy movement that the pair has been showing lately and no clear moves have been made by either bulls or bears.
Technical Outlook
The pair is now trading above 1.5675 but this could be very well a false break because usually when price tries several times to break a level and finally succeeds, it starts to move strongly in the direction of the break. As we can see from the chart above, price is just hovering above 1.5675 and shows long wicks on almost all candles; if this is a false break, the pair will drop at least until it reaches the 50 period Exponential Moving Average. A break of this form of support would show that the bullish break was indeed a false one.
Fundamental Outlook
There are no important indicators on today’s schedule so the Pound will be mostly influenced by the technical aspect.
Forex News: Following a Chinese shares market drop of more than 7% (the most since 2007), panic set in and most of the pairs started to move erratically. The euro-dollar pair climbed substantially on the back of US Dollar weakness and important resistance was broken.
The euro easily broke 1.1450 and is now free of resistance as the next level is far away, above 1.2000. For intra-day trading, yesterday’s high will act as minor resistance and 1.1450 could turn into support but the market is in panic mode so anticipating the next direction is difficult. Both the Relative Strength Index and the Stochastic are deep in overbought territory but for the time being the technical aspect is somewhat secondary.
Fundamental Outlook
The German IFO Business Climate is released at 8:00 am GMT and expected to show a value of 107.6, slightly lower than the previous 108.0. The value is derived from the opinions of about 7,000 businesses regarding a 6-month outlook for the German economy and higher values suggest optimism, thus strengthening the euro.
At 2:00 pm GMT the U.S. Consumer Confidence survey comes out, with an anticipated value of 92.8, higher than last month’s 90.9. Considering the latest drop of the US Dollar, the impact of the indicator could create mixed movement but under normal circumstances, increased consumer confidence brings a stronger dollar.
GBP/USD
The greenback weakened against the Pound as well and the pair rose to touch resistance, showing the strongest movement in a long while.
The resistance at 1.5800 was touched yesterday but price showed an almost perfect bounce soon after and the dollar erased some of the losses. The oscillators don’t show an extreme condition so they don’t offer a lot of hints about future movement but the fact that price bounced at resistance could mean that a move lower is next. Another attempt to break 1.5800 would mean that the US Dollar is weakening for the long term and would open the door for a touch of 1.5930.
Fundamental Outlook
The United Kingdom didn’t schedule any macroeconomic releases for the day so investors will keep an eye on China markets and American indices because these will most likely influence the direction of the US Dollar.
FOREX NEWS: THE GREENBACK IS BACK WITH A VENGEANCE
EUR/USD
Forex News: Yesterday the euro gave back some of the gains as the pair retraced lower after establishing a multi-month high at 1.1713. The US Consumer Confidence survey posted a better than anticipated value, and played an important role to the move south.
Technical Outlook
Currently the pair is re-testing from above the previously broken resistance located at 1.1450. If this level triggers a bounce higher, it will turn into support and will possibly reject falling prices in the future; also, this would suggest that the bulls are ready to make another attempt to break the high established at 1.1713. Notice that both oscillators are showing strong bearish momentum and are coming down, moving out of overbought. A move below 1.1450 would make the 50 period Exponential Moving Average the next target.
Fundamental Outlook
The US Durable Goods Orders (goods with a life expectancy of at least 3 years) are released at 12:30 pm GMT and expected to show a change of -0.5% compared with the previous 3.4%. However, the CORE version of the indicator, which excludes transportation items is expected to show an increase from the previous 0.6% to 0.3%. Under normal circumstances, higher than anticipated values strengthen the greenback.
GBP/USD
Yesterday the pair breached 1.5800 again but the bulls couldn’t close above the level and a positive US Consumer Confidence survey helped the US Dollar to bring the pair south.
Technical Outlook
The pair made two attempts to break 1.5800 but both resulted in moves lower and now positive U.S. data is strengthening the US Dollar, making us believe that 1.5675 is the next target for the pair. The 50 period Exponential Moving Average is in close vicinity of this potential support level so we are dealing with a confluence zone that is likely to push price higher once and if reached.
Fundamental Outlook
The British Bankers’ Association will release the Mortgage Approvals at 8:30 am GMT; the indicator offers insights into the British housing market and can strengthen the Pound if it will show a reading above the forecast 46.0K but the impact is usually low.
Forex News: The bulls couldn’t push price higher yesterday and the US Dollar rebounded, taking the pair lower. Price is now below 1.1450 which did not turn into support.
Technical Outlook
Most of the gains were erased but the pair is still trading above the 50 period Exponential Moving Average so the latest drop could be considered a good opportunity to join the uptrend. However, keep in mind that the oscillators are moving down and show bearish momentum so the current move might extend into the moving average where will probably find support.
Fundamental Outlook
At 12:30 pm GMT a major U.S. indicator is released: the Preliminary Gross Domestic Product. This is the main gauge of overall performance of the economy and a higher change than the anticipated 3.2% (previous 2.3%) could bring US Dollar strength.
The Kansas City Federal Reserve Bank will hold today the Jackson Hole Symposium that will be attended by central bankers, finance ministers and important figures from across the world. The symposium is closed to the press but participants sometimes talk to journalists during the day. Speeches of the participants can influence the Forex market strongly so caution is recommended.
GBP/USD
The US Dollar was strengthened by a positive value of the Durable Goods Orders (as well as the CORE version of the indicator) and the pair dropped for most of yesterday.
Technical Outlook
The pair dropped heavily and breached 1.5500. This level is likely to offer some support and if this is true, today we will see a retracement higher. The chances of a retracement are also increased by the fact that price dropped too fast a big distance and this usually creates some sort of rubber band effect but the overall picture is bearish.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases but British representatives will participate in the Jackson Hole Symposium and the pound will react depending on their attitude and matters discussed.
FOREX NEWS: BEARS SHARPEN THEIR CLAWS, EXTENDING GAINS
EUR/USD
Forex News: The US Dollar benefited yesterday from a better than expected value of the American Gross Domestic Product and the pair continued its decent for almost the entire day.
Technical Outlook
The pair breached the 50 period Exponential Moving Average and is now headed towards the potential support located at 1.1215. Here, we are likely to see some form of retracement higher but current bearish momentum is strong, so it is possible that we’ll soon see a break of the mentioned level. If price bounces quickly on 1.1215 and moves above the 50 EMA, it could mean that it is headed towards 1.1450 again, resuming the previous bullish impulse.
Fundamental Outlook
The German Consumer Price Index is released today at 12:00 pm GMT and expected to drop from the previous 0.2% to 0.1%. This is the main gauge of inflation and because the current value is considered too low, a further drop would weaken the euro, allowing the pair to travel south. The Jackson Hole Symposium will enter its second day so sharp and unexpected movement can still occur.
GBP/USD
US Dollar strength was seen against the pound as well yesterday and the pair continued to drop heavily, breaking 1.5500 support without any real difficulty and returning just briefly for a re-test.
Technical Outlook
The bearish move is overextended as price travelled too fast for too long, so we anticipate a retracement higher but the current drop might extend into the support at 1.5330. Note that both oscillators are oversold and this will increase the chances of a bullish pullback but a lot will depend on the British economic data that is released today.
Fundamental Outlook
At 8:30 am GMT the Second Estimate of the British Gross Domestic Product (year over year) is released and anticipated to show a change of 2.6%, same as the previous release. Robust numbers for the GDP show a thriving economy which usually means a strong currency so the Pound will probably react strongly to the release, especially if the actual value is different than the forecast.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: EUROPEAN INFLATION AND THE FATE OF THE EURO
EUR/USD
Forex News: The German Preliminary CPI released Friday showed small improvements in inflation and the euro reacted by edging slightly higher before dropping below the support at 1.1215, keeping the pair on a bearish path.
Technical Outlook
After the initial touch of 1.1215 the pair retraced higher and found resistance at the 50 period Exponential Moving Average. The drop that followed, took price below 1.1215 and it looks like the current move can extend into 1.1100. If the pair will reach this destination, we expect it to pull back higher, considering that the Stochastic has crossed bullish in oversold territory, but this scenario will depend on the European inflation data released today.
Fundamental Outlook
At 9:00 am GMT the European Consumer Price Index Flash Estimate is released, showing changes in inflation which has been stagnating for a long while; a lower value than the expected 0.2% will most likely hurt the euro, allowing the pair to drop further. Keep an eye on the CORE version of the indicator (excludes food, energy, tobacco and alcohol from calculation), released at the same time.
GBP/USD
The Second Estimate of the British Gross Domestic Product, released Friday, didn’t show any improvement so the Pound didn’t strengthen and the pair continued to drop, almost reaching 1.5330 support.
Technical Outlook
The support at 1.5330 is important for medium term outlook and we expect a bounce higher around this level. Supporting this bias is also the position of the Stochastic and Relative Strength Index which are both oversold for a few days; however, the short term bias is clearly bearish and this means that after retracements, the bearish movement should resume.
Fundamental Outlook
The British banks will be closed today, celebrating Summer Bank Holiday so there are no economic indicators scheduled for release and the pair may suffer from irregular volatility and choppy movement.
FOREX NEWS: BEARS STILL IN ATTACK-MODE, BULLS GET STRONGER
EUR/USD
Forex News: European inflation remained flat as showed by yesterday’s CPI release (forecast 0.2%, actual 0.2%) and the pair moved below 1.1215 after a brief retracement higher.
Technical Outlook
Although it slowed down, price is on a downwards path and our bias is bearish as long as the pair is trading below the 50 period Exponential Moving Average. The next potential support and destination is 1.1100 but the Stochastic is just coming out of oversold, meaning that we may see bullish price action in the form of retracements. Also, price has reached a bullish trend line that is likely to offer support, pushing it higher; a break of this trend line would make a touch of 1.1100 more viable.
Fundamental Outlook
The U.S. Manufacturing PMI is released today at 2:00 pm GMT, showing the opinions of purchasing managers regarding business and economic conditions. The expected figure (52.6) is very close to the previous (52.7) so if this forecast comes true, the event will probably go mostly unnoticed but higher numbers are beneficial for the US Dollar.
GBP/USD
British banks were closed yesterday so the Pound wasn’t affected by any news releases but US Dollar strength was seen especially during the second part of the day and the pair moved lower, without establishing a new low.
Technical Outlook
Bearish price action picked up yesterday afternoon and erased a bullish retracement but the support at 1.5330 was not threatened. The Stochastic cleared its oversold condition and the Relative Strength Index is still close to oversold so we anticipate that a touch of 1.5330 will result in a bounce higher and that the level will not be broken on the first attempt. However, the bias is bearish so a break of 1.5330 is likely to happen eventually.
Fundamental Outlook
The British Manufacturing PMI is released at 8:30 am GMT but no change is anticipated from the previous 51.9. Same as in the case of the American indicator we talked about earlier, higher values are beneficial for the currency but its impact depends on the gap between forecast and actual numbers.
