FOREX NEWS: EURO ZONE INFLATION AND FIRST LOOK AT U.S. JOBS DATA – INGREDIENTS FOR A BREAKOUT
EUR/USD
Forex News: German inflation showed a worse than expected change and U.S. Consumer Confidence increased more than anticipated but despite all this, yesterday’s session was not entirely controlled by the bears and price action was mixed.
Technical Outlook
The current move down can be a re-test of the recently broken resistance at 1.1215 which may turn into support if price bounces higher. The 50 period Exponential Moving Average is almost flat, moving alongside 1.1215 but can also offer some form of support; however, the overall picture is mixed and neither side is in clear control. If the pair stays above 1.1215, the first target will become 1.1320, otherwise we are headed towards 1.1100.
Fundamental Outlook
At 9:00 am GMT the European Consumer Price Index comes out, expected to show a decrease from the previous 0.1% to 0.0%. Since this is the main gauge of inflation (which has been too low for a long while), further decreases can negatively affect the euro.
At 12:15 pm GMT the ADP version of the Non-Farm Employment Change is released, offering an early look into the American jobs situation. The report is not as important as the government released data that comes out Friday but higher numbers than the forecast 192K usually strengthen the US Dollar.
GBP/USD
The pair remained below immediate resistance for most of yesterday and overall we had a slow session, with a bearish bias.
Technical Outlook
The pair found support around 1.5135 and it keeps grinding lower although the speed has definitely diminished. If the mentioned short term support can be broken early in the day, we expect a touch of 1.5100 but keep in mind that the oscillators haven’t visited the upper boundaries or even the 50 level in a long while and this increases the chances of moves north.
Fundamental Outlook
The British Current Account (value difference between imported and exported goods) is released at 8:30 am GMT and expected to show a value of -22.2B (previous -26.5B). At the same time the Final Gross Domestic Product comes out (no change forecast from the previous 0.7%) and values above expectations for both indicators are considered bullish for the Pound and implicitly for the pair.
FOREX NEWS: HEADING FOR SUPPORT ON POSITIVE U.S. ECONOMIC OUTLOOK
EUR/USD
Forex News: Yesterday the euro took a hit from disappointing inflation and the US Dollar strengthened from better than expected numbers for the ADP Non-Farm Employment Change and as a result the pair travelled again below 1.1215.
Technical Outlook
For the second time in a relatively short while the bulls took the pair above 1.1215 but then failed to capitalize on the break and price soon returned below the level. This shows lack of strength and also that we might see a break or at least a touch of 1.1100 today; both oscillators are moving downwards, supporting such a move.
Fundamental Outlook
The day is slower than we got used to this week but the notable events are the release of the U.S. Unemployment Claims at 12:30 pm GMT (expected to show a number of 273K unemployed individuals) and the U.S. Manufacturing PMI (forecast 50.8). Higher numbers for the first indicator usually weaken the greenback and better than expected values for the second strengthen it, but often the impact is mild if the difference between forecast and actual numbers is not substantial.
GBP/USD
The British Current Account showed improvement and this took the pair higher in the early stages of yesterday’s trading session but the bears took over once positive U.S. data came out.
Technical Outlook
The pair still hasn’t completed a proper retracement and the oscillators are just coming out of oversold territory, suggesting that price might head higher too. Yesterday we saw a move into 1.5200 which resulted in a bounce lower and overall the picture is bearish so if 1.5135 is broken, we are likely to see a touch of 1.5100; here price is likely to pause or retrace higher.
Fundamental Outlook
The British Manufacturing PMI is also released today and expected to show a value of 51.3, a slight decrease from the previous 51.5. The time of the release is 8:30 am GMT and because this is a leading indicator of economic health, higher values strengthen the Pound.
FOREX NEWS: TRADING IN CALM WATERS BEFORE THE NON-FARM PAYROLLS STORM HITS
EUR/USD
Forex News: The pair was little affected by economic releases and instead the technical aspect was the main price mover yesterday. We had a bullish trading session but immediate resistance was not broken.
Technical Outlook
The level at 1.1215 may turn into resistance if it rejects price lower once it is touched. The break of the bullish trend line seen in the chart above is likely to trigger additional bearish movement but 1.1100 remains the key level for short term price action. To the upside the level to watch is 1.1215 followed by the bearish trend line. The technical aspect will be secondary to the fundamental today as the much anticipated NFP report is released.
Fundamental Outlook
At 12:30 pm GMT the U.S. Non-Farm Payrolls (NFP) report is comes out, showing how many new jobs were created during the previous month. The employment situation weighs heavily in Fed’s decision regarding a possible rate increase so today’s report is probably more important than usual and it is widely known that almost always the impact is huge. Higher numbers than the expected 202K (previous 173K) are beneficial for the US Dollar and can take the pair lower.
GBP/USD
Yesterday the pair moved higher after almost touching the support at 1.5100. The British Manufacturing PMI showed a value close to analysts’ expectations and the impact on the Pound wasn’t substantial.
Technical Outlook
Price is headed towards the resistance at 1.5200, with both oscillators moving upwards after a long period of being oversold, so the chances of a touch of resistance are high. Same as in the case of the euro-dollar pair, the pound-dollar will be heavily affected by the U.S. jobs report so the technical aspect will be overshadowed by the fundamentals.
Fundamental Outlook
The NFP release is the highlight of the day but before that, the Pound will be affected by the Construction PMI which comes out at 8:30 am GMT and is expected to show a value of 57.5, almost unchanged from the previous 57.3. This survey of purchasing managers from the construction sector acts as a leading indicator of economic health so higher numbers are usually beneficial for the Pound but the impact is often mild.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: LESS U.S. JOBS, YET RESISTANCE STILL HOLDS
EUR/USD
Forex News: Friday’s highlight was the disappointing U.S. No-Farm Employment Change, which showed a number of 142K while the forecast was 201K. This initially weakened the US Dollar and took the pair higher but most of the euro gains were erased later in the day.
Technical Outlook
Price bounced at the bullish trend line and moved above 1.1215 but found heavy resistance at 1.1320 and returned below the bearish trend line. It looks like the US Dollar still has some steam left despite the unexpectedly low number of jobs so we are likely to see down pressure and a move towards the bullish trend line. On the other hand, a quick move above 1.1215 and above the bearish trend line would suggest that 1.1320 will be tested again.
Fundamental Outlook
At 2:00 pm GMT the Institute for Supply Management (ISM) will release the U.S. Non-Manufacturing PMI. The indicator is a survey of about 400 purchasing managers from outside the manufacturing sector who are asked to rate the current level of business conditions. It acts as a leading indicator of economic health, with better than expected numbers strengthening the US Dollar. The forecast is 58.0, a decrease from the previous 59.0.
GBP/USD
The greenback felt the effects of the NFP report and the pound bulls capitalised on it, creating a much needed retracement higher. The dollar erased some of the losses later in the day and immediate resistance still holds.
Technical Outlook
The resistance at 1.5200 was breached but the pair bounced at the 50 period Exponential Moving Average and moved below the mentioned level. This means that for the moment resistance still holds and that we might see a new encounter with 1.5100. A move above the 50 period EMA would invalidate such a scenario and would make 1.5330 the next target during the days to come.
Fundamental Outlook
The British Services PMI is released today at 8:30 am GMT and expected to show a value of 56.4, better than the previous 55.6. Similar to the U.S. indicator, it’s a survey of purchasing managers focused on business conditions and higher numbers are usually beneficial for the Pound.
FOREX NEWS: INDECISION AMONGST MIXED US DOLLAR SENTIMENT AND IRREGULAR VOLATILITY
EUR/USD
Forex News: Yesterday’s price action was characterized by indecision: the pair climbed but resistance wasn’t threatened and then a move lower followed but it wasn’t substantial and support is still not clearly broken.
Technical Outlook
The 50 period Exponential Moving Average is still flat and price is hovering near 1.1215. The downside is capped by a bullish trend line which we expect to be touched today but volatility is low and the market is having difficulty finding a clear direction. To the upside 1.1320 remains the first important short term resistance and a break would trigger additional bullish movement.
Fundamental Outlook
Today the Eurogroup and ECOFIN Meetings take place, attended by major personalities of the financial and political world so the volatility is likely to pick up; also, ECB President Mario Draghi will deliver a speech in Frankfurt at 5:00 pm GMT.
On the US Dollar side we have the U.S. Trade Balance, released at 12:30 pm GMT and expected to show a value of -42.2B. The indicator tracks the difference between imports and exports and a higher value is considered beneficial for the greenback although the impact is sometimes medium.
GBP/USD
The Pound was affected yesterday by a worse than expected Services Index and this contributed partly to the drop below 1.5200 which came after an unsuccessful attempt to break resistance.
Technical Outlook
The bulls failed to capitalize on a break of the 50 period Exponential Moving Average and now the bears managed to take price below 1.5200. This shows that the US Dollar is still strong despite the disappointing NFP and that we might see a touch of the support at 1.5100 but keep in mind that neither side is in clear control and moves upwards are not out of the question.
Fundamental Outlook
The United Kingdom didn’t schedule important economic announcements for today but the pair can be affected by the Eurogroup and ECOFIN Meetings and also by the technical aspect.
FOREX NEWS: BULLS AND BEARS STRUGGLING FOR CONTROL IN AMBIGUOUS ECONOMIC ENVIRONMENT
EUR/USD
Forex News: The U.S. Trade Balance showed a bigger deficit than analysts expected, weakening the US Dollar and allowing the pair to climb during yesterday; however, movement was still slow and without clear strength on either side until late afternoon.
Technical Outlook
The pair rallied above 1.1215 but price action doesn’t reveal whether the move up will continue or not. The 50 period Exponential Moving Average is flat and the oscillators don’t show a clear direction, adding to the blurry picture. The levels to watch remain 1.1215 and 1.1320 and in case of a sell off, the bullish trend line can offer important clues, with a break suggesting further downside.
Fundamental Outlook
The economic calendar is light for both the US Dollar and the Euro, so traders will focus on the technical aspect.
GBP/USD
The Pound gained against the US Dollar as well and now is struggling to break to the upside a confluence zone; the main part of yesterday’s trading session was controlled by the bulls, with a surge in the afternoon.
Technical Outlook
The resistance at 1.5200 and the 50 period Exponential Moving Average create a confluence zone which will be tough for the bulls to break but if they do so, they will score an important victory. A true break should be followed by a successful re-test from above which will turn 1.5200 into support. If this is the case, the next target is 1.5330, otherwise the pair will likely head towards 1.5100.
Fundamental Outlook
At 8:30 am GMT the British Manufacturing Production numbers are released, showing changes in the total value of output generated by the manufacturing sector. Higher numbers than the anticipated 0.4% (previous -0.8%) will most likely strengthen the Pound. Later in the day, at 2:00 pm GMT the NIESR Gross Domestic Product Estimate is announced, offering insights into the overall performance of the British economy. Although this is just an estimate, the impact is usually strong, with higher numbers than the previous 0.5% being beneficial for the Pound.
FOREX NEWS: FOMC MEETING MINUTES, BOE RATE DECISION – A STORM WAITING TO HAPPEN
EUR/USD
Forex News: Indecision continued throughout yesterday’s trading session and the pair didn’t make substantial advances to either side. A light economic calendar most likely contributed to this movement.
Technical Outlook
The level at 1.1280 gained importance for short term price action as we see the pair react to this zone, bouncing lower every time it touches it. A breakout is still anticipated, with support being offered by the bullish trend line and immediate resistance at 1.1280, but the direction is uncertain and will probably be decided by the contents of the FOMC Meeting Minutes.
Fundamental Outlook
At 6:00 pm GMT the FOMC will release the Minutes of their latest meeting, which will offer insights into the economic reasons that determined them to hold rates unchanged. Since a lot of speculation surrounded a September rate hike, finding out more details about the reasons behind the FOMC decision is crucial and the impact of the release will probably be bigger than on other occasions. As always, caution is recommended.
GBP/USD
British Manufacturing numbers surpassed analysts’ expectations, strengthening the Pound and generating another bullish trading session, taking the pair close to 1.5330 resistance.
Technical Outlook
The bulls made important advances yesterday but 1.5330 resistance sits in front of rising prices and the oscillators are approaching overbought. This could mean that we are about to see a reversal around this level, followed by a re-test of 1.5200 but today the Bank of England has prepared important announcements which will heavily influence the pair’s direction, making the technical aspect secondary.
Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the official bank rate and will also make public a breakdown of the members’ votes. The rate is not expected to change from the current 0.50% but a change in the members’ stance will undoubtedly trigger strong movement. At the same time the BoE will release a Summary of their Monetary Policy which can also have a strong impact on the Sterling.
FOREX NEWS: GRINDING HIGHER, WITH LIMITED UPSIDE POTENTIAL
EUR/USD
Forex News: The pair surpassed yesterday’s high but soon returned below resistance before the release of the FOMC Minutes which contained some mixed signals but showed that voters didn’t rule out a rate hike later this year.
Technical Outlook
The pair continues to grind higher, without breaking resistance but lately a lot of candles show long wicks, suggesting indecision. Yesterday’s bounce at 1.1320 followed by a move down could generate additional bearish price action, with 1.1215 as first target but on the other hand, a full candle break of 1.1320 would solidify the slim control of the bulls.
Fundamental Outlook
The last day of the trading week is light in terms of economic announcements so the main focus will be on the technical aspect.
GBP/USD
The Bank of England kept the rate unchanged and the MPC members voted as analysts expected so the event went mostly unnoticed but the Pound strengthened early during the day. The FOMC Meeting Minutes created US Dollar weakness but the movement wasn’t substantial.
Technical Outlook
The pair moved above 1.5330 and created short term resistance at 1.5370 but similar to the euro-dollar, the latest candles show long wicks, suggesting that indecision is present. The Stochastic is overbought and curving downwards, indicating that a drop might follow; if this is the case, 1.5330 is the first barrier that needs to be broken, while to the upside the first target is located at 1.5370.
Fundamental Outlook
The only notable event of the day is the British Trade Balance released at 8:30 am GMT and expected to show a value of -10.0B (previous -11.1B). The indicator tracks the value difference between imported and exported goods and higher numbers show a thriving economy (numbers above zero indicate that more goods were exported than imported). The impact is generally medium, especially if the actual number is close to analysts’ expectations.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: FUNDAMENTALS MAKE WAY FOR THE TECHNICAL SIDE – POSSIBLE REVERSALS
EUR/USD
Forex News: The pair finished the week on a bullish note as Friday we saw price climb for almost the entire day. Immediate resistance is now broken but major resistance is still intact.
Technical Outlook
Price is now moving above 1.1320, with minor resistance at 1.1380 and looks like the pair exited the choppiness it was in. It is important to note that both the Stochastic and the Relative Strength Index are approaching overbought, warning about a potential reversal below 1.1320. If this is the case, we are likely to see a day with ranging price action.
Fundamental Outlook
The European Union didn’t schedule major economic announcements for the day and U.S. banks will be closed, celebrating Columbus Day. All this may translate into choppy movement and irregular volatility.
GBP/USD
The Pound couldn’t continue the extended bullish run and Friday we had a session controlled mostly by the bears after another bounce at short term resistance.
Technical Outlook
The level at 1.5370 offered strong resistance in front of rising price and generated a move lower which took the pair below 1.5330. The oscillators are coming down after showing an overbought condition so the current drop is likely to extend into the 50 period Exponential Moving Average which will offer the first form of support. A break of the moving average will open the door for a move into 1.5200 but probably price will not travel such a long distance today.
Fundamental Outlook
Similar to the European Union and the United States, the United Kingdom didn’t schedule major news announcements so the entire economic calendar is blank, with traders focusing on the technical aspect.
FOREX NEWS: THE TECHNICAL SIDE HINTS ABOUT REVERSALS BUT NEEDS CONFIRMATION FROM FUNDAMENTALS
EUR/USD
Forex News: Yesterday the economic calendar was light and price direction was mainly influenced by the technical side. Overall the day was slow, with a failed attempt to move above resistance.
Technical Outlook
The last few four hour candles show long wicks and this is a sign of reversal, especially because it happens close to 1.1380 short term resistance. Adding to the possibility of a move down is also the fact that both oscillators are showing overbought signs. The first level of potential support in case of a drop is located at 1.1320, while a clear break and close above 1.1380 would make 1.1450 the first target.
Fundamental Outlook
The highlight of the day is the German ZEW Economic Sentiment survey which is released at 9:00 am GMT and expected to show a value of 6.8, much lower than the previous 12.1. The survey is based on the opinions of about 275 German professional analysts and investors and asks them to rate the German economic outlook for the next 6 months. Higher numbers than anticipated show optimism and usually strengthen the euro but the impact is mild if the forecast matches the actual numbers.
GBP/USD
The pair slowly climbed yesterday but stopped once again at minor resistance. This shows Pound weakness and prepares us for a potential move south.
Technical Outlook
The minor resistance created around 1.5370 is gaining importance for short term movement as seen from yesterday’s price action. Once again the level rejected rising price and we expect a move into the 50 period Exponential Moving Average if the mentioned resistance is not broken soon. The oscillators are moving downwards but without clear direction so we will turn to the fundamental side, expecting it to show the real bias of the day.
Fundamental Outlook
The British Consumer Price Index, which is the main gauge of inflation is released today at 8:30 am GMT. A lower value than the forecast 0.0% will most likely trigger Pound weakness and a move south for the pair, bringing price closer to the 50 EMA.
FOREX NEWS: BULLS STUMBLE AHEAD OF U.S. RETAIL SALES AND BRITISH UNEMPLOYMENT DATA
EUR/USD
Forex News: The euro-dollar pair had another day characterized by mixed movement as early in yesterday’s session the bulls tried without success to keep price above resistance. The second part of the session belonged to the bears and the pair returned lower, influenced also by a weak reading of the German ZEW.
Technical Outlook
The pair is now below 1.1380 resistance and both the Stochastic and Relative Strength Index are pointing downwards after coming out of overbought. These are bearish signs which make us believe that today we will see an encounter with 1.1320 and probably with the 50 period Exponential Moving Average.
Fundamental Outlook
The fundamental outlook will play a major role today as an important U.S. indicator is released: the Retail Sales. The expected change is 0.2% (same as last month), with higher numbers usually strengthening the US Dollar because sales made at retail levels represent a huge part of overall consumer spending which in turn accounts for the main part of economic activity.
GBP/USD
The British Consumer Price Index showed a value of -0.1%, lower than analysts’ expectation of a flat 0.0%. This pushed back the hopes of a near future rate hike and weakened the Pound substantially yesterday.
Technical Outlook
After another unsuccessful attempt to break the short term resistance located at 1.5370, the pair dropped swiftly through 1.5330 and the 50 period Exponential Moving Average, pausing at 1.5200. This strong drop is likely to extend below 1.5200, taking the pair into the next support located around 1.5100 but both currencies are affected by important announcements today and a lot will depend on the numbers posted.
Fundamental Outlook
The British Claimant Count Change is released at 8:30 am GMT and is expected to show a change of -2.3K (previous 1.2K). The indicator tracks unemployment levels by showing the change in the number of people without jobs who applied for social benefits. If the actual number is lower than forecast, the Pound is likely to gain strength (the bigger the difference, the higher the impact). Of course, the U.S. Retail Sales will also have a direct impact on the pair’s direction.
FOREX NEWS: KEY RESISTANCE AHEAD. ALL EYES ON U.S. INFLATION
EUR/USD
Forex News: The bulls had a brief moment of weakness yesterday before the release off the U.S. Retail Sales numbers but the disappointing value allowed the pair to climb and to touch key resistance.
Technical Outlook
The resistance located at 1.1450 is of major importance to medium term movement and yesterday the pair missed it by just a few pips. A break of this key level would signify a major victory for the bulls and would open the door for the next resistance, located at 1.1713. Surely such a distance will not be travelled today and more importantly, we have to note that 1.1450 still acts as strong resistance which can reverse the bullish move. The oscillators are hovering in the upper part of their channels but not yet overbought so they don’t offer strong clues.
Fundamental Outlook
The focus remains on the US Dollar today for the release of the U.S. Consumer Price Index which is one of the main gauges of American inflation. The indicator holds special importance because the Fed is closely monitoring inflation when deciding whether to increase or not the interest rate this year. The release is scheduled at 12:30 pm GMT and the expected change is -0.2% compared to the previous -0.1%; lower numbers usually weaken the greenback.
GBP/USD
The pair had a surprisingly bullish day, erasing all of the losses incurred a day earlier and clearly breaking resistance. The British Claimant Count Change showed a worse than expected number but the pair continued to climb.
Technical Outlook
The pair is clearly on a bullish path and 1.5500 is the next probable destination. After such a strong move, price is likely to pull back a little and to re-test 1.5370 from above, turning it into support. The Relative Strength Index is approaching overbought, signalling that a retracement is possible but the Stochastic is headed upwards, suggesting that the current move can easily continue so the oscillators are offering mixed signals.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so the pair’s direction will be mainly influenced by the technical aspect.
FOREX NEWS: U.S. INFLATION IS UP AND SO ARE THE HOPES FOR A RATE HIKE
EUR/USD
Forex News: Inflation improved in the United States, as shown yesterday by the CPI release, and this was one of the main reasons for the strong drop which took the pair below 1.1450.
Technical Outlook
After moving above 1.1450, the bulls ran out of steam, both oscillators entered overbought, which combined with better than expected U.S. inflation data, triggered the substantial drop seen yesterday. Of course the question is whether this move can continue lower or will it be stopped by support. Currently the pair is testing 1.1380 and the 50 period Exponential Moving Average is in close vicinity so the question will be answered by the way price will behave at this support area, with a break meaning that we are headed towards 1.1320.
Fundamental Outlook
It’s Europe’s turn to release inflation data in the form of the Final CPI but this release is likely to have a lower impact than the American one because German inflation is already released. The scheduled time is 9:00 am GMT and the expected value is -0.1%, same as previous; higher numbers are beneficial for the euro.
Later in the day, at 2:00 pm GMT the University of Michigan will release their Consumer Sentiment survey, expected to show 88.8, slightly better than the previous 87.2. Since consumer confidence is correlated with consumer spending, higher numbers will most likely strengthen the US Dollar.
GBP/USD
The pair was affected by the U.S. CPI release but to a lower extent and price action was choppy after touching 1.5500 resistance.
Technical Outlook
The pair showed rejection at 1.5500 by creating two pin bars (candles with small bodies and a long upper wick) but we can also see a long wick for the last bearish candle so the next move remains uncertain. The Stochastic is oversold and the Relative Strength Index is close to its 70 level so we can still see a drop if 1.5500 holds and rejects price again. On the other hand, a move above this level would probably bring in more buyers and would push the pair higher.
Fundamental Outlook
The economic calendar is light for the Pound so all eyes will be on the U.S. release but also on the technical factors.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: BEARISH PRESSURE MOUNTS, AS RESISTANCE HOLDS
EUR/USD
Forex News: Europe’s Final version of the CPI came out Friday with the value anticipated by analysts and the event went mostly unnoticed but a better than expected U.S. Consumer Sentiment survey strengthened the US Dollar later in the day.
Technical Outlook
Overall Friday was choppy, without major advances made by either side but two four-hour candles touched 1.1380 and closed as pin bars (long upper wicks). This shows rejection and also that 1.1380 is now resistance. Price is now below the 50 period Exponential Moving Average and heading towards 1.1320, but the Stochastic has reached oversold so the chart offers mixed signals. Nonetheless, the short term bias is still bearish and 1.1320 is a probable destination but a move above the 50 EMA will probably extend into 1.1380.
Fundamental Outlook
The day lacks major news announcements for both the Euro and the Dollar so the pair’s direction will be mainly decided by the technical factors.
GBP/USD
The Pound-Dollar pair had a slow day Friday, with some US Dollar strength, mostly triggered by the Consumer Sentiment survey. Resistance is still holding, support wasn’t threatened and the pair is ranging on the lower time frames.
Technical Outlook
The resistance at 1.5500 proves to be strong for medium term price action as several attempts to break it resulted in moves lower. The Stochastic and the Relative Strength Index are moving downwards, supporting a move into 1.5370 but the bears seem to lack strength and momentum is low. Price action is likely to be choppy, with a slightly bearish bias.
Fundamental Outlook
Similar to the Euro and the Dollar, the Pound is not affected by any economic indicators today so we expect slow and possibly choppy movement, with the main focus being on the technical aspect.
FOREX NEWS: BULLS FADE AWAY, A NEW DOWNTREND LOOMS
EUR/USD
Forex News: The fundamental scene didn’t influence much yesterday’s movement but throughout the day the bears controlled the pair and managed to threaten immediate support.
Technical Outlook
If the bears manage to break 1.1320, the pair is likely to visit 1.1280 again and then to head towards 1.1215 and the bullish trend line. Even if this scenario comes true, we can expect retracements along the way, considering that the Stochastic is already oversold and the Relative Strength Index is close to its 30 level. First resistance will be offered by the 50 period Exponential Moving Average.
Fundamental Outlook
The release of the U.S. Building Permits is the day’s most notable event, scheduled at 12:30 pm GMT. The forecast is 1.16M, almost identical with the previous 1.17M (annualized numbers); higher numbers show a thriving construction sector and can strengthen the US Dollar. Usually the impact is mild if the actual number matches analysts’ expectations.
GBP/USD
The Pound headed higher yesterday but the key resistance at 1.5500 couldn’t be broken, signalling that the bulls might be running out of steam.
Technical Outlook
We expect a bearish bounce at 1.5500, which will probably take price close to the 50 period Exponential Moving Average. However, the pair is still in a medium term uptrend and no significant low has been created so the possibility of a break of 1.5500 is still valid, but a true break should be confirmed by a re-test from above, visible at least on the lower time frames.
Fundamental Outlook
Bank of England Governor Mark Carney will testify today at 10:00 am GMT before the Treasury Select Committee. The main topic will be the Bank of England Bill and the speech can have strong impact on the Pound so caution is recommended.
FOREX NEWS: SELLERS STRUGGLE FOR CONTROL, BUYERS STILL RESILIENT
EUR/USD
Forex News: The pair retraced higher yesterday after a bounce at support but resistance also proved too hard to break and sent price lower again. The U.S. Building Permits were fewer than anticipated but still close to analysts’ expectations so the impact was muted.
Technical Outlook
Following an oversold condition of the Stochastic and an encounter with 1.1320 support, the pair moved north but the climb was reversed at 1.1380 resistance. We anticipate another move into 1.1320 and a break of this area, heading towards 1.1280 but for this to happen, the bullish trend line seen on the chart above must be broken. On the other hand, a move above 1.1380 followed by a re-test from above, would suggest that 1.1450 is the next destination.
Fundamental Outlook
The day lacks major announcements for both the Euro and the US Dollar so traders will focus mainly on the technical aspect.
GBP/USD
Mark Carney’s testimony about the Bank of England Bill did not create strong movement yesterday and the pair ranged for most of the day, having another encounter with 1.5500 resistance.
Technical Outlook
The resistance at 1.5500 was touched again but no bullish break occurred so our view remains mostly unchanged, anticipating a bearish bounce and a move closer to the 50 period Exponential Moving Average. A bullish break of 1.5500 should be followed by a re-test from above, in order to confirm we are dealing with a real breakout.
Fundamental Outlook
At 5:00 pm GMT, Bank of England Governor Mark Carney will speak at the Cairncross Memorial Lecture, in Oxford. We don’t expect strong movement but caution is recommended nonetheless.
FOREX NEWS: VAGUENESS AHEAD OF ECB PRESS CONFERENCE, BRITISH RETAIL SALES
EUR/USD
Forex News: Most of yesterday’s trading session was ranging, with the pair confined between resistance and a bullish trend line. The lack of major announcements contributed to the slow movement.
Technical Outlook
The resistance at 1.1380 was almost touched yesterday and the pair bounced lower, but the bullish trend line was not broken so the pair is still moving without clear direction. Also, the oscillators are not in extreme territory so they don’t offer strong clues and this means we will probably have to wait for a technical level (1.1380 or the trend line) to be broken before we will see a more decisive move.
Fundamental Outlook
The European Central Bank will announce at 11:45 am GMT the interest rate and although no change is expected (current 0.05%), the event is likely to generate strong moves. At 12:30 pm GMT, ECB President Mario Draghi will hold the usual press conference that accompanies the rate announcement and this is another reason for increased volatility. Journalists will ask questions regarding the ECB monetary policy and the answers given by Mario Draghi usually have a very strong impact on the pair’s short to medium term movement.
GBP/USD
The pair slowly descended, coming closer to the 50 period Exponential Moving Average but then a climb followed and overall we had a choppy trading session, without major breakouts.
Technical Outlook
After the near bounce at the 50 EMA, the pair seems to be headed once again towards the resistance at 1.5500. If this potential encounter with resistance doesn’t result in a clean break, the chances of a drop will increase substantially. A major role in today’s price movement will be played by the economic releases.
Fundamental Outlook
At 8:30 am GMT the British Retail Sales numbers come out, expected to show an increase of 0.3% compared to the previous 0.2%. Because sales made at retail levels represent a major part of overall economic activity, higher numbers can strengthen the Pound and the opposite is true for lower numbers.
Forex News: Yesterday’s price action was slow until the Draghi “storm” hit the markets, sending the euro tumbling below several support levels. The ECB President mentioned talks about a taking the deposit rate further into negative territory and this was the main reason for euro weakness.
Technical Outlook
Three horizontal support levels have been broken yesterday, as well as the bullish trend line and now the medium term outlook is bearish, aiming for 1.1100. That being said, keep in mind that strong moves are often followed by a pullback in the opposite direction or by a period of consolidation and sideways movement. The Relative Strength Index has entered oversold but it’s still going downwards and the same is true for the Stochastic (which is not oversold) so the downside momentum can still continue.
Fundamental Outlook
Early at 7:00 am GMT the French Manufacturing PMI is announced, expected to show a value of 50.2 and half an hour later the indicator with the same name but for the German economy is released, with an anticipated value of 51.8. These are leading indicators of economic health derived from the opinions of purchasing managers from the manufacturing sector and usually higher values strengthen the euro but the impact is low if the actual value matches analysts’ expectations.
GBP/USD
The British Retail Sales showed an unexpected increase (actual 1.9%, forecast 0.3%), strengthening the Pound substantially and breaching 1.5500 resistance once again. However, the climb was short lived and the pair soon reversed.
Technical Outlook
Yet another encounter with 1.5500 resulted in a failed break and the pair descended below the 50 period Exponential Moving Average but this dynamic support is not yet broken and can still push price higher. If today we will see a clear break of the moving average, the next destination is likely to be 1.5330, with the first hurdle at 1.5370.
Fundamental Outlook
The Pound will not be affected today by scheduled economic announcements, thus price direction will be mainly influenced by the technical aspect.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: BULLS FIGHT BACK, BEARS MAINTAIN OVERALL CONTROL
EUR/USD
Forex News: Friday’s economic announcements didn’t affect the pair significantly and the bearish momentum that was started Thursday continued throughout the day, after a brief retracement to the upside.
Technical Outlook
The massive drop seen during the last 2 trading days brought both oscillators in oversold territory and this fact, combined with the level of support at 1.1000 might generate a bullish bounce. If this comes true, the first level where downside movement will possibly resume is 1.1100. We expect a break of 1.1000 in the near future, but it should be confirmed by a re-test, at least on the lower time frames.
Fundamental Outlook
At 9:00 am GMT the German IFO Business Climate comes out, expected to show a value of 108.1, slightly lower than the previous 108.5. This survey is highly respected due to its large sample of about 7,000 businesses that will rate the current economic conditions as well as expectations for the next 6 months. Usually, higher values are beneficial for the euro and the opposite is true for lower numbers.
GBP/USD
The greenback strengthened against the Pound Friday and the pair travelled below two important levels, opening the door for a new downtrend.
Technical Outlook
Bearish pressure is still strong and the pair is now moving south with good momentum which we expect to continue throughout the day. However, the bullish trend line seen on the chart above might hinder such downside movement if it’s not broken soon or if price shows rejection around it. A bounce higher will find potential resistance at 1.5330 followed by 1.5370; the oscillators are approaching an extreme reading so we may see an encounter with the levels mentioned.
Fundamental Outlook
Price direction will be influenced by the technical side today, as the United Kingdom didn’t schedule major economic announcements.
FOREX NEWS: U.S. DURABLE GOODS, U.K. GROSS DOMESTIC PRODUCT – WE’RE IN FOR A BUSY DAY
EUR/USD
Forex News: The pair had a slow session yesterday, but completed a retracement after touching 1.1000 support. The German IFO Business Climate survey showed a value close to analysts’ expectations so the impact was muted.
Technical Outlook
The level at 1.1000 offered good support and generated a bullish retracement which may extend into the resistance at 1.1100. The fact that both oscillators are in oversold territory and moving upwards increases the chances of a bigger move north but the overall picture remains bearish and we expect at least another encounter with 1.1000 if not a break.
Fundamental Outlook
The U.S. Durable Goods Orders are released at 12:30 pm GMT, expected to show a -1.1% change (previous -2.3%). These are orders for goods with a life expectancy of at least three years, with higher values showing increased economic confidence and activity and thus a stronger dollar.
At 2:00 pm GMT the CB Consumer Confidence survey comes out, showing the opinion of about 5,000 households about the current economic conditions in the US. High levels of confidence suggest that consumers will spend more in the near future and this usually benefits the greenback so values above the forecast 102.5 may bring the pair lower.
GBP/USD
The pair moved mostly on a bullish path yesterday, but no major breakouts occurred and overall we had a slow session.
Technical Outlook
The bullish trend line we talked about rejected price higher, sending the pair into the resistance at 1.5370 but the bullish pullback stopped there. Today we expect another attempt to break the bullish trend line and the bearish momentum started Friday to continue. To the upside 1.5370 remains resistance but the 50 period Exponential Moving Average is also in close vicinity, creating a confluence zone which will be hard for the bulls to break.
Fundamental Outlook
The British Preliminary Gross Domestic Product is released today at 9:30 am GMT. This is the main gauge of an economy’s performance, thus higher numbers than the expected 0.6% (previous 0.7%) usually strengthen the Pound.
