Technical News | Daily

[GDMFX]

FOREX NEWS: ALL THE INGREDIENTS FOR A MARKET STORM ARE PRESENT. MAJOR US EVENTS SCHEDULED

EUR/USD
Forex News: The US Dollar strengthened yesterday on the back of improved American consumer confidence as shown by a report which came out with a reading of 90.9 compared with the anticipated value of 85.5. Sellers controlled the day but the distance traveled wasn’t spectacular.

Technical Outlook
Price is close to the support located at 1.3400 and we consider that today this level will be touched. The technical aspect of the market will be greatly overshadowed by the fundamentals but keep in mind that the Relative Strength Index is moving again below the 30 level, a fact which indicates an oversold market and favors bullish moves. Support is still located at 1.3400 while resistance sits at 1.3480.

Fundamental Outlook
The first event of the day is the release of the German Consumer Price Index, scheduled at 12:00 pm GMT and expected to decrease slightly from the previous 0f 0.3% to 0.2%. Such a decrease would be detrimental for the Euro as German inflation accounts for the major part of Euro Zone’s inflation.

The ADP Non Farm Employment Change is released at 12:15 pm GMT, showing the change in the number of jobs created during the last month. The report is put together by a privately owned company and tries to mimic the more important Government issued data which comes out 2 days later. The expected number is 234K and better numbers usually
strengthen the greenback.

At 12:30 pm GMT the American Advance Gross Domestic Product is announced with a hefty increase expected: 3.1% while last month’s value was -2.9%. Such a big change would benefit the Dollar as the GDP is the main gauge of an economy’s performance and this is the earliest version which usually has the highest impact.

Later in the day, at 6:00 pm GMT the American interest rate is announced but no change is anticipated and the FOMC Statement which accompanies the rate decision will be a more important market mover as it outlines possible future rate changes and the pace of the bond-buying program.

GBP/USD
The Pound was little affected by economic releases yesterday and Dollar strength took the pair below minor support.

Technical Outlook
A strong support level is ahead: 1.6920; price is likely to stall or even reverse here, considering also the position of the Relative Strength Index, but as we mentioned above, the US Dollar will be highly affected today by economic data and the technical aspect will be secondary. The next strong and confirmed support (if 1.6920 is broken) is located at 1.6700 while first resistance sits at 1.7010.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases and all eyes will be focused on the United States.

[GDMFX]

FOREX NEWS: SUPPORT TURNS RESISTANCE? PRICE ACTION WILL TELL

EUR/USD
Forex News: The US Dollar gained on the back of a value of the American Gross Domestic Product which surpassed analysts’ expectations. During the Fed announcements the greenback initially added to previous gains but it soon started to weaken, given the dovish attitude of the Statement.

Technical Outlook
Support at 1.3400 was broken during the day but price immediately returned to test it from below. The cluster of data released yesterday didn’t create unidirectional movement and this brings us to a crossroad: if previous support will turn into resistance, price will likely continue downwards into the next major support which is located at 1.3295, but otherwise, the break of support will prove to be a false one and the pair will be headed north. For the time being, yesterday’s low located at 1.3366 might act as minor support.

Fundamental Outlook
The fundamental scene calms down a bit today as the only major event is the release of the Euro Zone Consumer Price Index scheduled at 9:00 am GMT and expected to remain unchanged at 0.5%. ECB’s target for inflation is just below 2.0% and the current value is considered too low, thus an even lower number would be detrimental for the Euro and would most likely drive the pair south.

GBP/USD
US Dollar strength seen throughout the day allowed the bears to break the major support located at 1.6290 but once the FOMC Statement was released, the Pound managed to erase some of the previous losses.

Technical Outlook
If the break of 1.6920 wasn’t a false one and it can be sustained, it means that a major victory was scored by the bears and the medium term balance shifts in their favor. Note that the Relative Strength Index is still in oversold territory and tries to move out of it, a fact which favors bullish moves and if these types of moves occur, the first resistance and target is located at 1.6950.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today and price direction will be mainly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: NON FARM PAYROLLS – THE WEEK’S FINAL MARKET MOVER

EUR/USD
Forex News: The pair had mixed direction yesterday as the Euro was weakened by a disappointing value of the Consumer Price Index, but apparently the US Dollar wasn’t strong enough to take the pair significantly lower.

Technical Outlook
From a four-hour chart perspective the pair is in a clear downtrend but signs of weakness are present although the support at 1.3400 was broken and was tested from below several times (visible on the lower time frames). A sign of weakness is the fact that bears failed to break the low at 1.3366 even if 1.3400 turned into resistance; also, the Relative Strength Index spent a lot of time hugging the 30 level which suggests an oversold market. However, today’s direction will be decided by the fundamental rather than the technical aspect.

Fundamental Outlook
The day’s market moving event is the release of the US Non Farm Payrolls which is the most important jobs-related data for the US economy and tracks changes in the number of employed people during the previous month, excluding the farming sector. The release is scheduled at 12:30 pm GMT and the expected change is 230K while last month’s number was 288K. Such a decrease would weaken the greenback and drive the pair higher.

GBP/USD
The Pound continued to lose ground to the US Dollar yesterday and we saw the bears in control for the most part of the day. Broken support was successfully re-tested from below and price bounced lower.

Technical Outlook
The Relative Strength Index is trading below the 30 level for an extended period of time and the short term downtrend is in need of a retracement higher. Yesterday’s low will most likely act as minor support and if today the bears don’t manage to break it, we will most likely see higher prices. The US Dollar will be highly affected by the NFP release and the technical aspect will be secondary.

Fundamental Outlook
United Kingdom’s Manufacturing PMI will be released today at 8:30 am GMT and expected to drop slightly from the previous 57.5 to 57.2. This survey is based on the opinions of purchasing managers from the manufacturing sector and acts as a leading indicator of economic health so better than expected numbers will probably strengthen the Pound.

[GDMFX]

FOREX NEWS: US DOLLAR WEAKENED BY EMPLOYMENT FIGURES. POUND AFFECTED BY CONSTRUCTION DATA

EUR/USD
Forex News: Friday’s main event was without a doubt the disappointing number shown by the US Non Farm Payrolls (actual 209K; expected 231K). As a result, the US Dollar weakened and the pair moved above resistance.

Technical Outlook
Today we expect a quiet day, with mostly ranging price action as the pair will probably take a “breather” after Friday’s strong move. However, the latest momentum favors the bulls and the first barrier in front of rising prices is located at 1.3445; support sits at 1.3400 but we don’t expect this level to be broken today.

Fundamental Outlook
The fundamental scene lacks major economic indicators today and this fact adds to our belief that price will not make any spectacular advances.

GBP/USD
The Pound was weakened Friday by a worse than anticipated Manufacturing PMI and that’s why the bulls couldn’t capitalize on the disappointing value of the US Non Farm Payrolls. The day belonged to the bears as price closed lower than the opening of the day.

Technical Outlook
Pound weakness continues to be seen and the bears continue to dominate although the US economy shows signs of contraction and the Relative Strength Index is trading below the 30 level for an extended period of time. First potential support is represented by Friday’s low (1.6809) but today’s price action will be mainly influenced by the value of the Construction PMI.

Fundamental Outlook
At 8:30 am GMT the day’s only notable indicator of the day is released: United Kingdom’s Construction PMI. This is a survey derived from the opinions of purchasing managers from the Construction sector and acts as a leading indicator of economic health. The anticipated value is 62.1 which is a decrease from the previous 62.6 and lower than expected numbers will most likely weaken the Pound further.

[GDMFX]

FOREX NEWS: ECONOMIC DATA BRINGS PRICE OUT OF MONDAY’S TIGHT RANGE

EUR/USD
Forex News: Yesterday’s trading session lacked volatility almost completely as the market took a “breather” after Friday’s stronger than usual movement. No economic indicators were released and this contributed to the ranging price action.

Technical Outlook
The minor resistance created at 1.3445 wasn’t threatened yesterday but this will be the first barrier which the bulls need to break in order to weaken last month’s downtrend. Support is located at 1.3400 and until either one of the mentioned levels is broken, the market will remain in a ranging phase. For the time being our bias is neutral, expecting a breakout.

Fundamental Outlook
The Euro Zone Retail Sales change percentage is released today at 9:00 am GMT and expected o increase to 0.4% from the previous 0.0%. Higher numbers suggest increased economic activity and usually strengthen the Euro as the retail sector is a major part of the European economy.

At 2:00 pm GMT the US Non Manufacturing PMI is released, showing the opinions of purchasing managers outside of the manufacturing sector about economic and business conditions. The expected value is 56.6, an increase from the previous 56.0 and under normal circumstances, higher than anticipated values are beneficial for the US Dollar.

GBP/USD
United Kingdom’s Construction PMI showed yesterday a slightly better than anticipated reading and as a result the Pound climbed but overall we had a slow trading day.

Technical Outlook
For the time being the bulls lack the strength needed to reverse the medium term downtrend and we are likely to see another encounter with the support located at 1.6809. If this potential encounter will occur, and support will hold, price is likely to shoot up, considering the fact that the pair needs a bullish correction after such an extended drop as the one seen during the last month.

Fundamental Outlook
United Kingdom’s Services PMI is announced today at 8:30 am GMT and expected to increase from the previous 57.7 to 58.1. The indicator is an index derived from the opinions of purchasing managers from the Services sector regarding current and future business conditions and acts as a leading indicator of economic health. Readings above 50 indicate optimism and numbers above estimates usually strengthen the Pound, driving the pair higher.

[GDMFX]

FOREX NEWS: US DOLLAR CONTINUES ITS ADVANCE. EURO BULLS FIGHT BACK

EUR/USD
Forex News: The US Dollar gained against most of its counterparts as yesterday’s reports showed improvements for the US economy and traders’ interest for the American currency was renewed.

Technical Outlook
The pair fell for almost the entire day and the downtrend has new found strength as 1.3400 support was clearly broken. The next important support level is located at 1.3295 but the current level of 1.3365 is very likely to stop short term movement as we will probably see price stall here. The day ahead lacks major economic releases thus ranging price action might be in order.

Fundamental Outlook
The German Factory Orders are announced at 6:00 am GMT and expected to increase from -1.7% to 0.5%, a fact which would benefit the Euro; later in the day, at 12:30 pm GMT the US Trade Balance is released, showing the difference between imported and exported goods. The expected figure is -44.2B and values closer to zero will most likely strengthen the greenback. Both indicators usually have a medium-impact on the market but surprising numbers can increase their importance.

GBP/USD
United Kingdom’s Services PMI posted a better than expected value and momentarily strengthened the Pound; however, the rally couldn’t be continued and the Dollar erased some of the Pound’s early gains.

Technical Outlook
The first logical place where downwards motion can be resumed is the resistance located at 1.6920, but considering the way the pair has been moving lately, we might see this resumption occur before the level is hit. The US Dollar is strong at the moment and bullish moves should be regarded as corrections, not reversals of the medium term downtrend. The first level of interest to the downside is 1.6809.

Fundamental Outlook
The main Pound-affecting event of the day is the release of the UK Manufacturing Production which is expected to change to 0.7% from last month’s -1.3%. The indicator measures change in the output produced by the manufacturing sector and is considered a high-impact indicator; the time of the release is 8:30 am GMT and better values will most likely strengthen the Pound.

[GDMFX]

FOREX NEWS: ECB PRESS CONFERENCE: THE DAY’S MOST INFLUENTIAL EVENT

EUR/USD
Forex News: The Euro dropped yesterday as the German Factory Orders showed an extremely disappointing figure, while demand for the US Dollar increased on the back of a better than expected value of the American Trade Balance.

Technical Outlook
After a brief stall at 1.3365 minor support, the pair resumed bearish price action and broke the level with relative ease. If this previous minor support will turn into resistance today (after a test from below, followed by a potential bounce lower), the next target will become the key level at 1.3295, but today price direction will be heavily influenced by Mario Draghi’s speech at the ECB Press Conference.

Fundamental Outlook
At 11:45 am GMT the ECB will announce their decision regarding the Interest Rate (no change is anticipated) but the real market mover will probably be the Press Conference held 45 minutes later. ECB President Mario Draghi will read a prepared statement and afterwards, he will answer journalists’ questions about monetary policy, rate changes and economic recovery plans. This second part of the Press Conference is usually the one that creates the highest volatility as traders around the world try to interpret Draghi’s attitude and answers. We recommend caution if trading at the time because price action can be erratic during the Conference.

GBP/USD
United Kingdom’s Manufacturing output showed a figure of 0.3%, lower than the anticipated 0.7%, a fact which weakened the Pound and allowed the US Dollar to resume the pair’s downwards movement.

Technical Outlook
Yesterday’s price action created minor resistance around 1.6885 and the first support is located at 1.6809. The medium term downtrend seems to be resumed but as a confirmation, the level at 1.6809 must be broken today. Bearish pressure is present and the Pound is weakened by the latest disappointing figures but a major role will be played today by the BOE decision regarding the interest rate.

Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the interest rate and although no changes are anticipated (currently the rate is set at 0.50%), the event is likely to generate some volatility. The outcome of the rate decision is somewhat known as almost all analysts expect it to remain unchanged but caution is recommended nonetheless.

[Abdul2012]

Very interesting analysis , thank you .

[GDMFX]

FOREX NEWS: THE WEEK FINISHES WITH THE GREENBACK IN CONTROL

EUR/USD
Forex News: Yesterday’s ECB Press Conference generated mixed movement as the pair reversed direction several times. ECB President Mario Draghi mentioned that rates in Europe will remain lower for a longer period than they will in the United States.

Technical Outlook
The Euro was weakened by Mario Draghi’s comments and this bearish momentum is likely to continue throughout today’s session. First support and barrier in front of falling prices is located in the zone around 1.3330 and a break would open the door for a move into the more important support located at 1.3295; first resistance is represented by the level at 1.3400.

Fundamental Outlook
Both the Euro and the US Dollar have a calm day ahead as far as economic news releases are concerned. Price action will be mostly influenced by the technical aspect.

GBP/USD
The Bank of England maintained the interest rate value unchanged and as a result the event didn’t create volatility or strong directional movement.

Technical Outlook
The pair remained confined between 1.6885 resistance and 1.6809 support. Today we are likely to see a breakout which will probably favor the bears, considering the fact that the medium term trend is down. The next major support is located at 1.6700 but we don’t expect such a distance to be traveled in one day even if 1.6809 is broken decisively; first resistance is represented by the top created around 1.6885.

Fundamental Outlook
United Kingdom’s Trade Balance is released today at 8:30 am GMT, showing the difference between imported and exported goods. The indicator is considered to have a mild impact but higher numbers than the anticipated -8.9B will most likely strengthen the Pound, driving the pair higher.

[GDMFX]

Very interesting analysis , thank you .

Dear Abdul2012,

Thanks for reading it. It is great to know that you like the analysis=)

[GDMFX]

FOREX NEWS: IRAQ TENSIONS MAKE THEIR MARK ON THE CURRENCY MARKET

EUR/USD
US planes bombed several military targets in Iraq as tensions escalated and the Americans intervened in order to prevent a massacre of religious minorities. The Dollar was negatively affected by these events and the pair climbed Friday for the entire day.

Technical Outlook
At the moment market participants are moving to safe-haven assets as the UD Dollar is considered too volatile and risky. The current rally is likely to continue thru 1.3445 resistance if the political situation doesn’t calm down; the Dollar’s movement will be highly affected by this new tension and S/R levels might be broken with ease so we recommend caution for the next days.

Fundamental Outlook
The day lacks major economic indicators and we expect slow movement but a lot depends on the developments in Iraq.

GBP/USD
Minor support was broken and the Pound weakened Friday against the greenback although the latter was affected by the Iraq crisis.

Technical Outlook
The bearish move is overextended as the Relative Strength Index is again trading in oversold territory. Today we are likely to see a move higher which can find resistance at the recently broken level of 1.6809 but, as mentioned above, price will be prone to sudden changes of direction, depending on Iraq developments. First support is located at 1.6700 but this level is not likely to be touched today.

Fundamental Outlook
The United Kingdom didn’t schedule any major news releases today but we recommend caution, considering the political environment.

[GDMFX]

FOREX NEWS: GERMANY’S ZEW SURVEY IN THE FOCUS

EUR/USD
Yesterday the pair grinded lower but movement was very sluggish as the day didn’t have any major news releases and tensions in Iraq and Ukraine eased.

Technical Outlook
Price returned below 1.3400, a fact which shows that bulls lack the strength needed to stage a full scale reversal. Lately the pair is confined between 1.3445 resistance and 1.3330 support but we slightly favor a move into the mentioned support, especially if the bears can maintain price below the current level of 1.3400.

Fundamental Outlook
The day’s only major event is the release of the German ZEW Economic Sentiment scheduled at 9:00 am GMT. This is a survey based on the opinions of German analysts and institutional investors and it’s focused on their opinions regarding a 6 month outlook. The nature of their jobs keeps them highly informed on the economic situation and at the same time, increases the importance of this survey. The expected number is 18.2, a significant decrease from the previous 27.1 and lower numbers will most likely weaken the Euro.

GBP/USD
The pair had an extremely slow day yesterday and no major developments took place on either the fundamental or the technical scene.

Technical Outlook
We expect a touch of 1.6809 resistance before downside movement can resume and it is important to note that price is printing lower lows while the Relative Strength Index is showing higher lows, a behavior known as regular bullish divergence. Often times this divergence results in moves north but the medium term downtrend is strong so we are likely to see bearish movement after an upside correction.

Fundamental Outlook
The United Kingdom didn’t schedule any important indicators for the day thus the pair’s direction will be mainly affected by the technical aspect.

[GDMFX]

FOREX NEWS: US DOLLAR AFFECTED BY RETAIL SALES FIGURES, POUND INFLUENCED BY CARNEY’S SPEECH

EUR/USD
The German ZEW survey disappointed drastically by posting a reading of 8.6, while the anticipated number was 18.2 and as a result the Euro lost ground in front of the greenback for almost the entire day.

Technical Outlook
As soon as price came in close vicinity of 1.3330 support, a bullish reaction could be seen and this indicates that price may stall or even reverse at this level. The medium term downtrend is bearish but a new low couldn’t be established since last week and the pair is at a crossroad: a break of 1.3330 will most likely take price into 1.3295 key support while a bounce would suggest that 1.3400 will be revisited.

Fundamental Outlook
The US Retail Sales will be the day’s main event for the pair. Higher values suggest a thriving economy where people are comfortable spending and this fuels further economic activity. The scheduled time of the release is 12:30 pm GMT and the expected change is 0.2%, same as last month; better than anticipated values usually strengthen the US Dollar.

GBP/USD
As expected the Pound bounced higher yesterday, completing a bullish retracement which took price into the first minor resistance. No major economic indicators were released and the move was mostly generated by technical factors.

Technical Outlook
We are faced with a bounce-or-break scenario at the current level of 1.6809 and from a technical point of view a drop would be in order since yesterday’s move was just a correction to the downtrend. A bullish break of the current level will make 1.6885 the next target while a bounce lower will probably take the pair close to the major support at 1.6700.

Fundamental Outlook
Price direction will be heavily influenced today by UK’s Claimant Count Change, an indicator which tracks changes in the number of unemployed people compared to the last month. It will be released at 8:30 am GMT with an anticipated change of -29.7 (previous -36.3) and higher numbers will most likely weaken the Pound. An hour later the BOE will release the Inflation Report and Governor Mark Carney will deliver a speech regarding its contents. This is likely to be the main event of the day for the Pound, depending on the Governor’s attitude and matters discussed.

[GDMFX]

FOREX NEWS: EURO BACK IN THE SPOTLIGHT FOR THE RELEASE OF THE GERMAN GDP

EUR/USD
Forex News: Yesterday the US Dollar weakened on the back of a disappointing figure shown by the Retail Sales and this allowed the pair to climb above 1.3400 support.

Technical Outlook
As we saw, even if 1.3400 was pierced yesterday, the bulls couldn’t maintain price above this level and this suggests that we might see more of the ranging movement experienced lately. Another encounter with 1.3330 is very possible now that we’ve seen price rejected by resistance. If 1.3330 is broken, the pair is likely to visit 1.3295, while 1.3400 still remains the first resistance.

Fundamental Outlook
The day’s main event will be the release of the German Preliminary Gross Domestic Product which is scheduled for release at 6:00 am GMT and is expected to decrease from the previous 0.8% to -0.1%. The GDP is considered to be an economy’s main performance gauge and since Germany accounts for the major part of Europe’s economy, lower numbers will most likely have a negative impact on the single currency.

GBP/USD
As revealed by the Inflation Report, the Bank of England cut their expectations for economic growth and also, BOE Governor Carney mentioned that interest rates will not be increased in the near future. The pound weakened significantly as a result and major support was touched.

Technical Outlook
The key support level at 1.6700 was touched as the pair traveled substantially lower. This huge drop is likely to continue throughout today but it’s also very possible to see a stall before the level will be clearly broken. The Relative Strength Index has reached oversold territory again and we are likely to see some sort of bullish movement. The next support is located at 1.6550, a level visible on a Daily chart.

Fundamental Outlook
There are no major economic releases scheduled for the Pound today and price action will be influenced mostly by the technical aspect.

[GDMFX]

FOREX NEWS: BOTH PAIRS BELOW RESISTANCE. RETESTS ANTICIPATED

EUR/USD
Forex News: Germany’s Preliminary Gross Domestic Product showed a lower than expected value, but despite this, the Euro strengthened throughout the day. However, resistance couldn’t be broken and the pair shows signs of indecision.

Technical Outlook
The resistance at 1.3400 was pierced again yesterday but, similar to a day before, price returned almost immediately below the level. This shows underlying bearish pressure and warns about a potential drop below the support located at 1.3300. However, if during the day the bulls manage to close a significant candle above 1.3400, we are likely to see a move in close vicinity of 1.3445.

Fundamental Outlook
French and Italian banks will be closed today, celebrating Assumption Day and no major news comes out for the Euro. The US Dollar will be affected by the Producer Price Index which is released at 12:30 pm GMT and is expected to post a change of 0.1% compared with last month’s 0.4%. The PPI has inflationary implications because a higher price charged by producers will be eventually transmitted to the consumer.

At 1:55 pm GMT the University of Michigan will release the Consumer Sentiment survey based on the opinions of about 500 consumers. The expected figure is 82.7, an increase from the prior 81.8 and higher numbers are usually beneficial for the US Dollar because confidence among consumers is often a leading indicator of consumer spending.

GBP/USD
The pair had a slow trading session but we saw a new low followed by a bullish retracement which didn’t manage to take price above 1.6700.

Technical Outlook
Today we expect a test of the level at 1.6700 and this test will decide whether the pair can continue lower towards 1.6550 or a stronger move north is in order. The Relative Strength Index is coming out of oversold territory and this favors bullish moves but the bears control the market at the moment so all moves to the upside should be considered just corrections.

Fundamental Outlook
United Kingdom’s second estimate of the Gross Domestic Product is released today at 8:30 am GMT. The expected change is 0.8%, same as last month and under normal circumstances, higher numbers benefit the Pound as the GDP is an economy’s main gauge of overall performance.

[GDMFX]

FOREX NEWS: A LACKLUSTER FUNDAMENTAL SCENE BRINGS A SLOW MONDAY

EUR/USD
United States’ Producer Price Index released Friday posted a value which was anticipated and the event didn’t have a huge impact on the US Dollar. The day lacked major developments and price action was mostly ranging.

Technical Outlook
The pair remained confined between 1.3400 resistance and 1.3330 support but another attempt to break resistance was made; however, this attempt didn’t succeed and the week finished very close to the mentioned level. For the time being, the bulls lack the strength needed to shift the balance in their favor and another encounter with 1.3330 support is a high probability scenario, especially if today resistance is not clearly broken

Fundamental Outlook
The only notable event of the day is the release of the German Bundesbank Monthly Report which usually contains notes about economic conditions and an economic outlook. The release is scheduled at 10:00 am GMT and has a higher impact if the point of view expressed differs from the one of the European Central Bank.

GBP/USD
The second estimate of the British Gross Domestic Product released Friday didn’t surprise in any way and the pair had a slow day, without major direction changes.

Technical Outlook
The pair is trading close to 1.6700, a level which acts like a magnet for price for the time being. For today we anticipate more of the ranging movement experienced Friday but keep in mind that the Relative Strength Index is coming out of oversold territory on a four-hour chart and on a Daily chart it still shows an oversold condition. This favors bullish action for the day and increases the chances of a move above 1.6700.

Fundamental Outlook
The United Kingdom didn’t schedule any high-impact releases for the day, thus price direction will be mostly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: INFLATION INDICATORS IN THE SPOTLIGHT

EUR/USD
Forex News: The Euro had a tough first day of the week against the Dollar and we saw the pair travel south after a slow start of the session; however, major support is still intact.

Technical Outlook
It is clearer now that 1.3400 resistance cannot be broken for the time being and that 1.3330 support is the next target of the pair. We can see several four-hour candles with long upper wicks, a fact that indicates rejection and on top of that, once price started to move south, it did so with strong momentum (full bearish candles). The day’s direction will be also affected by the fundamental scene which becomes busier today.

Fundamental Outlook
An important inflation gauge is released today by the United States: the Consumer Price index. This indicator tracks changes in the price paid by consumers for the goods they purchase and basically shows the buying power of the US Dollar. The event is scheduled at 12:30 pm GMT and a drop is anticipated, from the previous 0.3% to 0.1%; if this comes true, the greenback will most likely weaken against its counterparts.

GBP/USD
The week opened with a gap to the upside, a fact generated by a Sunday Times interview with Mark Carney who reignited speculation of a rate hike.

Technical Outlook
More often than not, weekly gaps tend to be filled, thus another move below 1.6700 might be in order. However, the time factor is not known, meaning that even if the gap will be closed, we cannot know when this is going to happen. For the time being, 1.6700 is not clearly broken and at least a touch of this level will probably occur today.

Fundamental Outlook
United Kingdom’s Consumer Price Index will also be released today, at 8:30 am GMT. Inflation in the UK is close to BOE’s targeted range but the indicator is important nonetheless because it is taken into consideration when the interest rate decision is made. Today’s expected change is 1.8% while last month’s was 1.9% and lower numbers usually weaken the Pound.

[GDMFX]

FOREX NEWS: US DOLLAR AND POUND PRONE TO SHARP MOVES. MEETING MINUTES HOLD CENTER STAGE

EUR/USD
Forex News: Positive data released yesterday by the American economy allowed the US Dollar to continue to gain ground against its counterparts and yesterday we saw a clear break of support.

Technical Outlook
The recent break of 1.3330 support is likely a true one but before price can travel south, we need to see a retest of the recently broken level. Adding to this short term bullish view is the oversold condition signaled by the Relative Strength Index on the four hour chart above. If the retest results in a bounce lower, the first target is represented by 1.3295 key level.

Fundamental Outlook
The main event of the day will be the release of FOMC’s Meeting Minutes which will offer insights into the reasons which affected their latest decision regarding the interest rate and will possibly contain hints about future monetary policy direction. The release is scheduled at 6:00 pm GMT and a high impact is anticipated.

GBP/USD
United Kingdom’s Consumer Price Index posted a surprising drop and as a result the Pound weakened substantially against the greenback, taking the pair below support.

Technical Outlook
Similar to the EUR/USD, we anticipate a bullish retracement before the downside momentum will resume; however, the control clearly belongs to the bears so any moves north should be considered simple pullbacks for the time being. The Relative Strength Index is below 30 again, favoring short term retracements into the first potential resistance located around 1.6660.

Fundamental Outlook
The Bank of England will release today at 8:30 am GMT the details of their latest votes on interest rate and Asset Purchase Facility. If all 9 members voted to keep the rate unchanged, it could mean that an increase will not be seen in the immediate future. If the members’ opinions start to diverge, the release will have a higher impact that usual. The FOMC Meeting Minutes will also have a direct impact on the pair’s movement.

[GDMFX]

FOREX NEWS: THE US DOLLAR CAPITALIZES ON A HAWKISH FED ATTITUDE

EUR/USD
The pair continued to slide lower during the day, before the FOMC Minutes which further strengthened the US Dollar as the Fed showed optimism regarding the job market and inflation.

Technical Outlook
We saw a new low of the year reached by the pair and for the time being the bears are dominating the market. The key support at 1.3295 was clearly broken and if price returns to it for a retest and successfully bounces lower, we might see a touch of 1.3200 in the near future. Keep in mind that the Relative Strength Index is deep in oversold territory, a fact which favors a touch from below of 1.3295.

Fundamental Outlook
The French Manufacturing PMI is released early at 7:00 am GMT and expected to climb slightly from 47.8 to 47.9. It will be followed half an hour later by the German indicator with the same name, which is expected to drop from the previous 52.4 to 51.7. Both are leading indicators of economic health for two of the most important countries in the Euro Zone and higher numbers are usually beneficial for the Euro.

The Philly Fed Manufacturing survey will be announced at 2:00 pm GMT and a hefty drop is anticipated, from the previous 23.9 to 19.7. The survey is based on the opinions of purchasing managers from the manufacturing sector and usually, its importance is increased if the actual numbers differ a lot from the anticipated ones.

GBP/USD
Bank of England’s Minutes released yesterday showed that 2 out of 9 members voted for a rate increase, a fact which boosted the Pound higher but the hawkish attitude of the FOMC Meeting Minutes allowed the pair to move lower.

Technical Outlook
The zone around 1.6660 is now confirmed resistance since yesterday we saw clear rejection off that level and the Dollar run might extend into the support located at 1.6550. A lot depends on the Retail Sales numbers and the technical aspect will be somewhat secondary.

Fundamental Outlook
United Kingdom’s Retail Sales numbers come out today at 8:30 am GMT with a positive change expected, from the previous 0.1% to 0.4%. Such an increase will further strengthen the Pound as sales made at a retail level represent the major part of economic activity.

[GDMFX]

FOREX NEWS: THE SECOND DAY OF THE JACKSON HOLE SYMPOSIUM BRINGS US TWO IMPORTANT SPEECHES

EUR/USD
Forex News: Yesterday’s trading session was mostly controlled by the bulls although Philadelphia Manufacturing data was better than anticipated, a fact which would normally benefit the US Dollar. However, major levels were not threatened.

Technical Outlook
The current bullish move is likely to continue until 1.3295 is touched. The next potential turning point is 1.3330 but this move is considered just a retracement to the downtrend which was overextended and in need of a breather. The low at 1.3240 will act as potential support if the downtrend resumes and the next key level is located at 1.3200.

Fundamental Outlook
Today is the second day of the Jackson Hole Symposium and probably the most important one because both Fed Chairwoman Janet Yellen and ECB President Mario Draghi will deliver speeches at the Federal Reserve Bank of Kansas City. Yellen’s speech is scheduled at 2:00 pm GMT while Draghi’s will follow at 6:30 pm GMT; the main topic for both speeches will be the labor market, which is always a delicate subject that can strongly influence the market so caution is recommended.

GBP/USD
The pair ranged for almost the entire day, with a slightly bullish bias despite the fact that Retail Sales dropped during the previous month.

Technical Outlook
There is still room for the pair to move to the upside as no major resistance is near current price, but on the other hand, 1.6550 support is very close and it will most likely act as a magnet for price. A lot depends on Janet Yellen’s speech, which will probably influence heavily the US Dollar.

Technical Outlook
The United Kingdom didn’t schedule any major news releases for the day and market participants will focus on the two important speeches mentioned above.