FOREX NEWS: DOLLAR STRENGTH CONTINUES AHEAD OF U.S. HOME SALES DATA
EUR/USD
Forex News: The trading volume yesterday was thin and this made possible a fall which under normal circumstances would have been less sharp. Most of the US Dollar strength was due to a better than expected U.S. Consumer Confidence survey.
Technical Outlook
The pair is currently struggling to break the 50 period Exponential Moving Average and if it succeeds, the next stop will probably be the support at 1.0870. Both the Stochastic and Relative Strength Index are moving downwards with good momentum and far from oversold so we can assume that the move will continue lower. However, if the moving average proves to be a support thatâs too hard to break, the pair will most likely touch 1.0980 today.
Fundamental Outlook
The U.S. Pending Home Sales come out at 3:00 pm GMT, expected to show an increase to 0.6% from the previous 0.2%. Such a change (or a greater one) would bring US Dollar strength and probably a move into support.
GBP/USD
The British Pound was one of the worst performers yesterday and weakened severely against the greenback, with the only apparent reason being the Consumer Confidence survey mentioned earlier.
Technical Outlook
The support zone around 1.4830 was easily broken yesterday but today we expect a bullish pullback which may turn the mentioned support into resistance. The Relative Strength Index is touching its 70 level, approaching an oversold condition and increasing the chances of a push upwards. A continuation of the current move without any form of retracement is possible but not likely; however, if this is the case, the first potential support is located at 1.4700.
Fundamental Outlook
Just like the rest of the week, the Pound will not be affected today by major economic indicators so the focus will remain on the U.S. Pending Home Sales and on the technical aspect.
Forex News: Price moved mostly sideways yesterday and this was in part because the end of year approaches fast and brings thin liquidity. The U.S. Pending Home Sales showed a worse than expected value but the release didnât have a major impact.
Technical Outlook
Today we will probably see slow trading, possibly with alternating periods of low and high volatility. The levels to watch remain 1.0980 as resistance and 1.0870 as support and our bias is neutral until a break of either one occurs, followed by a re-test. The pair is likely to move sideways, without clear direction (mostly due to end of year low liquidity). If a break of one of the mentioned level occurs, price needs to show strong momentum, otherwise itâs very possible that we are dealing with a false break.
Fundamental Outlook
German banks are closed today, celebrating New Yearâs Eve and no major indicators are released. On the US Dollar side, the Unemployment Claims release is the only notable event, scheduled at 1:30 pm GMT and expected to show a number of 274K. Values above expectations are usually detrimental for the greenback but we donât expect a strong impact.
GBP/USD
Similar to the euro-dollar, this pair had a sideways trajectory but it did return to test the recently broken support which is now resistance.
Technical Outlook
The level at 1.4830 was tested from below but price didnât bounce lower after the touch so this level can be considered some sort of resistance now, but not a strong one. Minor support sits at 1.4790 but both oscillators are moving upwards, coming from their respective oversold levels, so we donât expect a break of the mentioned support. Price movement is likely to be choppy and irregular.
Fundamental Outlook
The United Kingdom didnât schedule any news releases and because itâs New Yearâs Eve, volatility will be irregular. The markets will be closed during the first day of the year.
FOREX NEWS: GERMAN INFLATION, U.S. MANUFACTURING DATA â INGREDIENTS FOR AN ACTIVE MONDAY
EUR/USD
Forex News: Friday markets were closed in celebration of New Yearâs Day so action picks up where we left off Thursday.
Technical Outlook
The pair is currently trading below the 50 period Exponential Moving Average on a four hour chart so we favor the short side for a break of 1.0870 support and a move lower, into the next support located at 1.0800. The Relative Strength Index is approaching its 30 level which suggests oversold conditions and this may hinder further movement south but a lot will depend on the German inflation data released today and direction will probably be decided by the value shown by this indicator.
Fundamental Outlook
The dayâs main event is the release of the German Preliminary CPI scheduled at 1:00 pm GMT and expected to show an increase from the previous 0.1% to 0.2%. The German economy is a pillar of the entire Eurozone so an increase in inflation is beneficial for the euro. The second important release of the day is the U.S. Manufacturing Purchasing Managersâ Index, scheduled at 3:00 pm GMT and expected to post a small increase from 48.6 to 49.1. Because this is a leading indicator of economic health, a higher value will likely strengthen the US Dollar.
GBP/USD
Thursday was the last trading day of last year and the pair traveled fast towards the support at 1.4700 but this move is likely to stall or reverse.
Technical Outlook
The minor support located at 1.4790 was broken decisively but a descent below 1.4700 is less likely. Fast moves like the current one are usually reversed or a period of sideways movement follows and on top of that, the Relative Strength Index is now below its 30 level so the pair is considered oversold and this further increases the chances of a bullish pullback. The first potential resistance for this pullback is represented by the recently broken level at 1.4790.
Fundamental Outlook
The highlight of the day for the Pound is the release of the British Manufacturing PMI, scheduled at 9:30 am GMT, with a forecast value of 52.8 (previous 52.7). Similar to the American indicator with the same name, a higher value will strengthen the currency because it shows that purchasing managers are confident in current and future economic conditions.
FOREX NEWS: US DOLLAR STARTS THE NEW YEAR STRONG, THREATENS SUPPORT
EUR/USD
Forex News: German inflation disappointed yesterday by showing a change of -0.1% (forecast 0.2%) and as a result the pair traveled south after an attempt to break the 50 period EMA.
Technical Outlook
The pair is trading once again below the 50 period Exponential Moving Average and the short term bias is bearish. If the sellers can take price below 1.0800 and turn this level into resistance, we will most likely see a move into 1.0700 â 1.0690 during the days to come. Both oscillators are in the lower part of the range but not oversold so the downside movement can continue; however, a bullish break of the 50 period EMA would make 1.0980 the first target.
Fundamental Outlook
At 10:00 am GMT the Eurozone Flash Estimate CPI is released, and anticipated to show a 0.4% increase compared to the previous 0.2%. The German CPI disappointed yesterday and this may negatively affect the Eurozone inflation but under normal circumstances, higher than anticipated numbers are beneficial for the Euro.
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GBP/USD[/B]
The pound-dollar had an active day, with a lot of up and down movement but overall the pair didnât make substantial advances, finishing the trading session close to where it started it.
Technical Outlook
The level at 1.4790 was breached yesterday but price soon returned below it, making this the first resistance in front of rising prices in the future. Price will most likely touch 1.4700 and the bears will attempt to break this support en route to the key level at 1.4600. Because the Stochastic and the Relative Strength Index are both approaching oversold levels, we consider that the pair is in need of a bullish retracement so it is very possible to see today a move below 1.4700 followed by a climb above this level.
Fundamental Outlook
The British Construction Purchasing Managersâ Index comes out at 9:30 am GMT and is expected to show a value of 56.1 (previous 55.3). This is a leading indicator of economic health derived from the opinions of about 170 purchasing managers from the Construction sector and usually higher numbers are beneficial for the Pound.
FOREX NEWS: FIRST LOOK INTO U.S. JOBS DATA MAY BRING THE YEARâS FIRST UPSET
EUR/USD
Forex News: European inflation dropped to 0.2% as shown by yesterdayâs CPI release and the single currency weakened swiftly, dropping below 1.0800.
Technical Outlook
The pair appears to be headed towards the next level of importance, which is 1.0690 and we favour a touch of this target. However, it must be noted that the Relative Strength Index and the Stochastic are both oversold and this suggests that a move north will soon happen. Such a move should be considered just a simple retracement and not a full scale reversal as long as price remains below 1.0800, which may turn into resistance.
Fundamental Outlook
At 1:15 pm GMT, Automatic Data Processing Inc. will release their version of the U.S. Non-Farm Employment Change. The indicator tries to mimic the Government released data that comes out 2 days later and has a lower impact than the latter, but shouldnât be overlooked. Higher numbers than the expected 193K (previous 217K) are usually beneficial for the US Dollar.
The Fed will release the FOMC Meeting Minutes later in the day, at 7:00 pm GMT. The document contains a detailed record of their latest meeting and offers insights into the reasons that determined the Fed to raise the interest rate in December. The impact can be high so caution is recommended.
GBP/USD
Although the British Construction PMI came out better than anticipated, the US Dollar still managed to take the pair below immediate support and to generate a bearish day.
Technical Outlook
Similar to the euro-dollar pair, we expect a retracement higher, towards 1.4700, mainly because the Stochastic and Relative Strength Index are bouncing on their respective oversold levels. Before the said retracement occurs, the pair is likely to touch the support located at 1.4630 but we donât expect a clean break of this level unless the U.S. data released throughout the day is much better than forecast.
Fundamental Outlook
At 9:30 am GMT the United Kingdom Services PMI comes out, expected to show a value of 55.6 (previous 55.9). The indicator doesnât have a huge impact unless the actual number differs a lot from analystsâ forecast, but higher numbers are beneficial for the Pound.
FOREX NEWS: DECEMBER RATE HIKE DEEMED A âCLOSE CALLâ. HOW WILL THE US DOLLAR REACT?
EUR/USD
Forex News: The first look into U.S. jobs data revealed that more jobs were created during the previous month than analysts had predicted but this only created a brief move down followed by a sharp reversal. The minutes revealed that some Fed officials considered the December rate hike a âclose callâ and this was seen as bearish for the US Dollar.
Technical Outlook
The oversold condition of the Stochastic and the Relative Strength Index combined with the dovish FOMC Meeting Minutes will most likely trigger a move into 1.0800 where we expect downside movement to resume. A break above the mentioned level will probably extend into the 50 period Exponential Moving Average but the bullish movement should be limited by this dynamic resistance. Overall the short term picture remains bearish after the retracement north is complete.
Fundamental Outlook
The only notable release of the day is the German Retail Sales, scheduled at 7:00 am GMT. The previous change was -0.4% and the one expected for today is 0.5%, so a hefty increase. If this forecast comes true, the pair is likely to move higher on the back of Euro strength.
GBP/USD
The British Services PMI came out with a value very close to analystsâ expectations, thus the event went mostly unnoticed. The FOMC Meeting Minutes created some US Dollar weakness but nothing significant.
Technical Outlook
The support zone created between 1.4630 and 1.4600 is very important and we donât expect it to be broken easily. The Relative Strength Index and Stochastic are both oversold, favoring a bullish move which is likely to reach 1.4700 or even the 50 period Exponential Moving Average but once that happens, we favor another fall.
Fundamental Outlook
The United Kingdom didnât schedule major indicators for today so price direction will be mainly influenced by the technical aspect.
Hey guys, after volatile 2015, what are your expectations from EURO in 2016?
I am neutral on EURUSD. What I have seen from my analysis is that this currency pair will be consolidated between 1.05 and 1.15, which means it might behave the same way as it behaved in 2015.
Waiting for othersâ views. :59:
FOREX NEWS: U.S. NON-FARM PAYROLLS â LETâS GET READY TO RUMBLE!
EUR/USD
Forex News: The German Retail Sales showed a lower value than analysts had anticipated, but it was still better than the previous and this contributed somewhat to yesterdayâs climb above medium term resistance.
Technical Outlook
The pair shows good bullish momentum and the oscillators are moving strongly to the upside without being overbought. This suggests that the movement north is likely to continue but the level at 1.0870 may prove a strong resistance. If this is the case, we it probably see a move below the 50 period Exponential Moving Average and into 1.0800.
Fundamental Outlook
Price direction today will be heavily influenced by the release of the Non-Farm Payrolls, scheduled at 1:30 pm GMT. This is widely considered the most important U.S. employment indicator and almost always its release creates strong movement, with higher numbers being beneficial for the US Dollar. The expected figure is 203K, lower than the previous 211K.
GBP/USD
The pair dropped yesterday below the support at 1.4565 which is an important level, better seen on a Weekly chart. The greenback continues to dominate the Pound and a retracement is still expected.
Technical Outlook
Price is slowly grinding lower without any sort of retracement and has even managed to breach 1.4565 key support. Both oscillators are crawling on their respective oversold levels and the pair seems in bitter need of a move higher which may occur today. The first potential resistance is located at 1.4630, followed by 1.4700 but the real direction of the day will be probably decided by the U.S. jobs data.
Fundamental Outlook
The British Trade Balance is released at 9:30 am GMT and expected to show a number of -10.5B (previous -11.8B). Usually the indicator doesnât create huge movements but nonetheless, a higher number can strengthen the Pound.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: RESISTANCE HINDERS FURTHER UPSIDE MOVEMENT. EFFECTS OF THE NFP STILL NOT DONE
EUR/USD
Forex News: The jobs situation in the United States improved in December as shown Friday by the better than expected value of the Non-Farm Payrolls report. However the greenback strengthened just briefly against the Euro and soon after the release the pair started to climb.
Technical Outlook
We are probably in for a slow day but the pair is now trading above the 50 period Exponential Moving Average and this suggests that bullish price action will continue at least until 1.0945 minor resistance is reached. This will be the first potential turning point, followed by 1.0980 and the overbought position of the Stochastic will favor a drop if one of these resistances holds.
Fundamental Outlook
The day ahead lacks major economic or political announcements for both the Euro and the US Dollar and this contributes to our expectation of a slow trading session.
GBP/USD
The NFP release generated the expected impact Friday and the US Dollar strengthened on the back of a better than anticipated number, taking the pair below key support.
Technical Outlook
The support at 1.4565 is now broken but a stronger retracement to the upside is long overdue. We consider that the probability of moves north is high and we expect an encounter with the 50 period Exponential Moving Average in the near future but probably not today. A more likely scenario is a move into 1.4565 followed by a period of ranging price action.
Fundamental Outlook
Similar to the rest of Europe and the United States, the United Kingdom didnât schedule major news releases for today, thus the pairâs direction will be mainly dictated by the technical aspect.
FOREX NEWS: CORRECTIVE MOVES COMPLETE. BEARS CONTINUE TO REIGN?
EUR/USD
Forex News: Trading was mostly bearish yesterday after the pair made an unsuccessful attempt to break resistance. Price briefly climbed above 1.0945 but the bulls couldnât sustain it.
Technical Outlook
The overbought condition of the Stochastic combined with the resistance at 1.0945 proved to be a good enough reason for price to fall but it must be noted that the support at 1.0870 is breached but not yet decisively. If today the sellers manage to keep price below this level, we anticipate a touch of 1.0800 but a quick bounce above the level might invalidate such a scenario and will make 1.0945 the new target.
Fundamental Outlook
There are no major economic releases scheduled for the day ahead so the main focus will be on the technical aspect.
GBP/USD
Yesterday the bulls finally decided to step in and managed to take price above the immediate level of importance. However, the bears soon took over and at the time of writing the pair is trading below 1.4565.
Technical Outlook
The bullish move seen yesterday is considered just a correction and doesnât signify an end of the downtrend. Furthermore, the last four hour candle has a long upper wick (shows rejection) and has descended below the previous support (1.4565), which is now resistance. The target for today is the previous low at 1.4495 but more upside movement is not out of the question.
Fundamental Outlook
The British Manufacturing Production is scheduled for release at 9:30 am GMT and anticipated to increase 0.1% (previous change -0.4%). The manufacturing sector is of great importance to the British economy and this indicator shows changes in the overall value of the output of the said sector, so a higher number is usually beneficial for the Pound.
At 3:00 pm GMT, NIESR will announce a Gross Domestic Product Estimate which usually has a mild impact on the Pound, with higher numbers triggering strength. The previous value was 0.6% so anything above that is considered bullish.
FOREX NEWS: EURO STALLS, POUND WEAKENS SEVERELY. BOUNCES HIGHER EXPECTED
EUR/USD
Forex News: The euro-dollar moved without clear direction all day yesterday and gravitated around 1.0870 level. The fundamental scene was rather calm, contributing to the pairâs lack of determination.
Technical Outlook
The pair is in a ranging state but it is trading below the 50 period Exponential Moving Average and below 1.0870. This makes us favour the short side for a drop into 1.0800 support but a bounce above 1.0870 would invalidate such a scenario, making 1.0945 the first target. The overall picture is not much changed compared to yesterday but the oscillators are moving downwards and this increases the chances of an extended fall.
Fundamental Outlook
We have another slow day ahead, with the only notable release being the Eurozone Industrial Production. The indicator is scheduled at 10:00 am GMT and shows changes in the value of output generated by the industrial sector. Higher numbers than the anticipated -0.2% (previous 0.6%) are usually beneficial to the Euro; however, the indicator is known to have a mild impact on the market.
GBP/USD
The Pound extended losses on the back of a disappointing performance of the Manufacturing sector and reached levels that were last seen in 2010.
Technical Outlook
The first support is located at 1.4350, followed by the more important one at 1.4230 but both these levels were last visited in 2010 so their importance may have degraded during time. The Relative Strength Index is deep in oversold and the Stochastic is lagging behind price, thatâs why it is not below its 20 level, so we can safely say that the pair is oversold and a retracement higher is long overdue. The first potential level of resistance is 1.4495 but the Pound is weak and further downside cannot be overruled.
Fundamental Outlook
The United Kingdom didnât schedule any economic data for today so the pairâs direction will be dictated by the technical aspect.
FOREX NEWS: BULLISH CORRECTIONS IN PLAY. OVERALL ENVIRONMENT STILL BEARISH
EUR/USD
Forex News: Yesterday the pair moved lower and came in very close vicinity of the support located at 1.0800 but jumped higher in the afternoon. The Eurozone Industrial Production was lower than expected and the result contributed somewhat to the initial move lower.
Technical Outlook
The current bounce up is likely to find resistance at the 50 period Exponential Moving Average and the 1.0870 level. If this is the case, then the support at 1.0800 will probably be tested again and possibly broken to the downside. The oversold condition of the Stochastic works against this scenario and favours bullish moves. If the pair bounces above 1.0870 and above the 50 EMA, we will probably see a move close to 1.0945.
Fundamental Outlook
Today the Eurogroup meetings take place, attended by the European Central Bank President, finance ministers from the member states and many other personalities from the Eurozone. The meetings are closed to the press but any leak during the day may increase volatility. Once the meetings have concluded, an official statement will be released.
GBP/USD
Price touched the support at 1.4350 and bounced perfectly off of it, confirming that this level still has enough strength despite the fact that it was last visited in 2010.
Technical Outlook
Yesterdayâs price action created minor resistance at 1.4475 and we believe this level will be visited again before bearish movement resumes. The Stochastic and Relative Strength Index still need to move away from their respective oversold levels and this increases the probability of a move into 1.4475 or even above it. Overall the picture remains strongly bearish but the bullish correction is still in play.
Fundamental Outlook
Itâs an important day for the Pound as the Bank of England will announce today at 12:00 pm GMT their interest rate. No change is expected (current 0.50%) but the Monetary Policy Summary released at the same time will reveal the reasons that stood behind the rate decision and maybe clues about a future rate hike. A breakdown of the MPC membersâ votes is released at the same time, showing the stance of each member regarding a rate change. The Pound is likely to react strongly so caution is recommended.
FOREX NEWS: EURO MEETS RESISTANCE, POUND SHOWS MIXED REACTIONS AHEAD OF U.S. RETAIL SALES
EUR/USD
Forex News: Yesterdayâs trading session was characterized by a break of 1.0870 followed by a bullish move into the resistance at 1.0945. The pair is now capped by resistance and shows rejection.
Technical Outlook
The touch of 1.0945 zone resulted in a quick move lower which shows rejection but also that the bulls are not yet ready to break this level. Nonetheless, the latest impulse is bullish and the pair is trading above the 50 period Exponential Moving Average and above 1.0870 which is now support. The Stochastic is wide open, heading upwards and showing good momentum but the Relative Strength Index doesnât have a clear direction so the oscillators paint a mixed picture. A lot of todayâs movement will depend on the fundamental scene but if price descends below 1.0870, we expect it to touch 1.0800.
Fundamental Outlook
The US Dollar has a busy day today, with the first major release being the U.S. Retail Sales scheduled at 1:30 pm GMT. Sales made at retail levels represent a big part of overall economic activity and usually an increase in such sales strengthens the greenback. Todayâs forecast is a change of -0.1% compared to the previous 0.2%.
At 3:00 pm GMT the University of Michigan will release a Consumer Sentiment survey which is considered high-impact because consumer confidence leads consumer spending. Higher numbers than the anticipated 92.7 usually strengthen the US Dollar.
GBP/USD
The Bank of England kept the interest rate unchanged and the MPC members didnât change their stance regarding a hike but the event created volatility nonetheless. However the pair didnât make substantial advances to either side.
Technical Outlook
The main trend is without a doubt bearish but we are likely to see the start of a consolidation phase between 1.4350 and 1.4475. A break of either of these levels would mean that the ranging period is over and that more directional movement will follow. The oscillators still favour a stronger move to the upside, possibly into the 50 period Exponential Moving Average be we donât anticipate such a strong move to happen today.
Fundamental Outlook
The United Kingdom didnât schedule important indicators for today so all eyes will be focused on the United States for the releases weâve mentioned earlier.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: MARTIN LUTHER KING DAY â U.S. BANKS CLOSED AND IRREGULAR VOLATILITY PRESENT
EUR/USD
Forex News: Friday the CORE version of the U.S. Retail Sales indicator showed a worse than expected value, weakening the greenback and allowing the pair to climb. However the Euro lacks strength and the bullish move stopped at resistance.
Technical Outlook
Although 1.0945 was broken, the pair stopped and reversed once 1.0980 was touched and now it is trading once again below resistance. Lately price action is choppy and all moves are quickly exhausted so today we expect a descent into 1.0870. As an alternate scenario, we might see another climb but we donât expect 1.0980 to be broken decisively. The oscillators show mixed signals and donât hold enough information, thus contributing to the fogginess of the overall picture.
Fundamental Outlook
Today the United States celebrate Martin Luther King Day so banks are closed and no indicators are released. Europe didnât schedule any economic data releases either so we expect a day with potentially low volatility.
GBP/USD
Friday the pair continued its descent, approaching the near 6-year low at 1.4229 although the U.S. Retail Sales somewhat disappointed. This further shows that the Pound is weak and that more downside action will follow.
Technical Outlook
The pair is approaching a very important level, where price bounced higher in 2010 and the strength of this level combined with the oversold condition of the Stochastic and Relative Strength Index suggests that a move up is next. The first target is the potential resistance located at 1.4350 but keep in mind the overall trend is bearish and a break of 1.4230 is not out of the question.
Fundamental Outlook
Similar to the United States and the rest of Europe, the United Kingdom didnât schedule any economic indicators for today, so the pairâs direction will be influenced by the technical aspect.
FOREX NEWS: EURO STUCK IN A RANGE, POUND VOLATILITY BOOSTED BY BRITISH INFLATION DATA
EUR/USD
Forex News: Yesterdayâs trading session was slow, as anticipated and most of this behaviour was generated by the fact that U.S. banks were closed, celebrating Martin Luther King Day. Europe didnât release any major indicators, further contributing to the lack of volatility.
Technical Outlook
Price is sliding towards 1.0870 and has touched the 50 period Exponential Moving Average which is angled slightly to the upside. This is a good place for price to bounce higher but the lack of clear movement makes it hard to anticipate the next direction. Nonetheless, a break of the 50 EMA and of 1.0870 would open the door for a touch of 1.0800.
Fundamental Outlook
The German ZEW Economic Sentiment is released today at 10:00 am GMT and expected to drop to 8.2 from the previous 16.1. The survey expresses the opinions of about 275 German analysts and investors about a 6-month outlook and usually creates decent volatility, with higher numbers being beneficial for the Euro.
At the same time the Final CPI of the Eurozone comes out, showing the state of inflation in the Euro area. The Final version is the least important but even so, higher values than the forecast 0.2% can bring Euro strength.
GBP/USD
The Pound edged higher against the American Dollar yesterday but the climb was not substantial and first potential resistance was not touched.
Technical Outlook
The downtrend is still in full swing and most of yesterdayâs movement was just a normal reaction based on low volatility. However, the pair is still oversold and we anticipate more upside action soon, probably until 1.4350 is touched, but a lot will depend on todayâs inflation data released by the United Kingdom. The oscillators are close to their respective oversold levels, suggesting that a move up is next but they have been so for a long while.
Fundamental Outlook
At 9:30 am GMT the British Consumer Price Index is released and anticipated to show a change of 0.1%, same as previous. This is the main gauge of inflation and is currently considered too low so any climb is viewed as beneficial for the Pound. Usually the release creates decent volatility, especially if the actual number differs from forecast so caution is recommended.
FOREX NEWS: POUND FALLS TO LEVELS LAST SEEN IN 2009 AHEAD OF WEF ANNUAL MEETINGS
EUR/USD
Forex News: The euro-dollar pair had another choppy trading session yesterday and slowly approached 1.0870 where it bounced slightly higher. The German ZEW survey exceeded analystsâ expectations by a small margin and the release didnât create strong movement.
Technical Outlook
The pair is still ruled by indecision and doesnât pick a clear direction. The levels to watch are 1.0800 as support and 1.0945 as resistance but a technical prediction can be made only when 1.0870 is broken and re-tested. The oscillators offer mixed signals and the 50 period Exponential Moving Average is flat, further increasing the uncertainty. As long as price stays above 1.0870 the outlook is slightly bullish for a touch of 1.0945.
Fundamental Outlook
The United States CPI comes out at 1:30 pm GMT but is not expected to show any change from the previous 0.0%. Because this is the main gauge of inflation, higher values are beneficial for the US Dollar and can take the pair lower. Today the World Economic Forum (WEF) Annual Meetings start in Davos and will last the whole week so volatility is likely to increase.
GBP/USD
Although the British CPI was better than expected, the Pound dropped yesterday to levels last seen in 2009. The release just created brief moments of strength before the pair broke key support.
Technical Outlook
The break of 1.4230 shows that the downtrend is in full swing and that it is likely to continue, with the first target located at 1.4050. However, this is a very old level and we donât know how price will react to it (although the last 2 levels were old as well and price bounced briefly); before 1.4050 is reached, we expect the pair to climb into 1.4230 for a re-test from below and a much needed retracement.
Fundamental Outlook
The British Claimant Count Change is released at 9:30 am GMT with a forecast of 4.1K (previous 3.9K). The indicator shows the changes in the number of people who applied for unemployment related benefits and usually a higher number is detrimental for the Pound. Keep in mind that the WEF Meetings can have an impact on the pairâs movement.
FOREX NEWS: EUROâS FATE RESTS ON DRAGHIâS SHOULDERS
EUR/USD
Forex News: The pair tested resistance yesterday but bounced lower despite a worse than expected value of the American Consumer Price Index. This just goes to show that the US Dollar is starting to gain momentum against the Euro.
Technical Outlook
The resistance at 1.0945 was surpassed yesterday and price came in close vicinity of 1.0980 but bounced lower. If the uptrend line seen on the chart above and the 50 period Exponential Moving Average are clearly broken, we expect the pair to move below 1.0870 and closer to 1.0800. As an alternate scenario, a bounce at the trend line would suggest another encounter with resistance.
Fundamental Outlook
The ECB will announce today at 12:45 pm GMT the interest rate, which is not expected to change from the current 0.05% but the likelihood of strong movement is high nonetheless. At 1:30 pm GMT ECB President Mario Draghi will hold the usual press conference, explaining the reasons behind the rate decision and answering journalistsâ questions. This event will probably create the biggest volatility of the day but the direction will depend on Draghiâs attitude and answers.
GBP/USD
The British unemployment numbers showed yesterday that less people applied for social help and the pair slightly retraced higher. However, this can also be attributed to the recent strong drop that was in need of a rebound.
Technical Outlook
The bearish trend found short term support at 1.4125 and we expect the pair to move higher, possibly into 1.4230. If this potential resistance will not stop the climb, the 50 period Exponential Moving Average will be the next turning point where downwards movement may resume. The oscillators are starting to move above their respective oversold levels and this increases the chances of a deeper retracement to the north.
Fundamental Outlook
The United Kingdom didnât schedule major news releases for today so the pairâs direction will be mainly dependant on the technical aspect.
FOREX NEWS: EURO BREAKS SUPPORT, POUND AFFECTED BY RETAIL SALES
EUR/USD
Forex News: As expected the European Central Bank kept its interest rate unchanged but during the press conference, ECB President Mario Draghi mentioned that low inflation is still a risk and that monetary policy may be adjusted during the March meeting. The Euro reacted quickly to the comments and the pair tumbled below 1.0800.
Technical Outlook
The pair breached 1.0800 but at the time of writing is bouncing higher. However, we expect another attempt to move below the mentioned level and probably a break based on the dovish stance adopted by ECB President Mario Draghi. A move below 1.0800 would make 1.0710 the first target while a bounce would suggest the pair is headed towards 1.0870 again. However, we favour the short side.
Fundamental Outlook
The day lacks major events, with the most notable one being the release of the German Manufacturing PMI, scheduled at 8:30 am GMT. This is a survey based on the opinions of purchasing managers and usually it has a strong impact only if the actual numbers differ a lot from the analystsâ forecast which for todayâs release is 53.0. Lower numbers negatively affect the Euro.
GBP/USD
The Pound wasnât affected by major news yesterday but breached short term support, only to return above it later in the day.
Technical Outlook
The fact that price moved below short term support but failed to continue suggests that the strength of the bears is starting to fade away and that we might see a move closer to 1.4230 today. The oscillators are long oversold, thus supporting such a higher move but keep in mind we are still in a strong downtrend and the possibility of a move into 1.4050 shouldnât be ruled out.
Fundamental Outlook
The British Retail Sales come out today at 9:30 am GMT and this might be the deciding factor for todayâs direction. The anticipated change is -0.1% while the previous was 1.7% and usually a higher than expected number is beneficial for the currency, generating a move up.
We hope you had a profitable trading week and we wish you a relaxing weekend.
[B]FOREX NEWS: US DOLLAR IS BACK âWITH A VENGEANCEâ, THREATENS SUPPORT
EUR/USD[/B]
Forex News: Friday the Euro had another encounter with support on the back of worse than expected German Manufacturing data and a dovish speech delivered in Davos by ECB President Mario Draghi. However the week ended before a clear break could be identified.
Technical Outlook
The pair reached the important support at 1.0800 once again and this time we expect it to go through the level and make a run for 1.0710. However, a bounce here would suggest that price will move higher, into the 50 period Exponential Moving Average and if the economic data released throughout the day meets analystsâ expectations, probably the market impact will be mild and we will have a slow, ranging day.
Fundamental Outlook
At 9:00 am GMT the German IFO Business Climate comes out, expected to show a value of 108.5 compared to the previous 108.7. This survey is derived from the opinions of about 7,000 businesses regarding current economic conditions as well as expectations for the next 6 months and usually has a hefty impact on the Euro, but only if the actual value differs significantly from analystsâ forecast. Higher numbers generally strengthen the Euro. Later in the day, at 6:00 pm GMT, Mario Draghi will deliver a speech in Frankfurt and as always, caution is recommended during his public appearances.
GBP/USD
Despite a worse than expected value of the British Retail Sales, the Pound pushed higher in the first part of Fridayâs trading session and touched resistance. However, later in the day the pair bounced lower on the back of a weakened Pound.
Technical Outlook
Fridayâs move up was a much needed retracement but as we saw, the bulls couldnât manage to keep price above the 50 period Exponential Moving Average; also the level located at 1.4350 is now confirmed as resistance and we can expect it to reject rising prices in the future. On top of that, the Stochastic is now overbought, a condition that wasnât seen in a long while, so all things point towards another move south, below 1.4230. If this is not the case and price moves above 1.4350, it means we are dealing with a longer retracement to the upside but still not an end of the downtrend.
Fundamental Outlook
There are no major economic indicator releases scheduled for the Pound today so the pairâs direction will be primarily influenced by the technical aspect
FOREX NEWS: BIAS REMAINS BEARISH AHEAD OF U.S. CONSUMER CONFIDENCE DATA
EUR/USD
Forex News: Despite a worse than expected value shown yesterday by the German IFO Business Climate (actual 107.3; forecast 108.5), the Euro strengthened and the pair failed to break the support at 1.0800.
Technical Outlook
Even if yesterday price bounced at 1.0800, we still maintain our bearish bias and anticipate a break of this level. The upside movement is likely to continue until the 50 period Exponential Moving Average is touched but there the chances of a drop will increase because the level at 1.0870 is in close vicinity of the moving average, offering an even stronger resistance. A move above 1.0870 would make the short term bias bullish.
Fundamental Outlook
The only notable event of the day is the release of the US Consumer Confidence survey, scheduled at 3:00 pm GMT. This survey has a large sample of about 5,000 American households and tries to measure confidence regarding the overall economic situation. If confidence among consumers grows, the retail sales are also likely to follow and thatâs why this survey acts as a leading indicator of consumer spending. The forecast is 96.6 and higher numbers usually strengthen the US Dollar.
GBP/USD
The Pound showed mixed price action yesterday, moving above and below the Moving Average and bouncing at support. The lack of economic data contributed to the choppy session.
Technical Outlook
The pair is testing the level at 1.4230 which has now turned into support after an almost perfect bounce higher. However, the Stochastic is moving lower, coming from overbought territory and the pair is under serious downtrend pressure so we expect the mentioned level to be broken today and price to head into the next support, located at 1.4125. First horizontal resistance is located at 1.4350 and will probably reject price in case of a bullish move.
Fundamental Outlook
Bank of England Governor Mark Carney will testify today before the Treasury Select Committee, at 10:45 am GMT. The topic will be the Financial Stability Report and the Pound is likely to have increased volatility during the speech but the direction will depend on the Governorâs attitude and answers.
