Technical News | Daily

[GDMFX]

FOREX NEWS: BEARS GAIN MOMENTUM, ECONOMIC DATA TO INFLUENCE SHORT TERM DIRECTION

EUR/USD

Forex News: The Preliminary version of the U.S. Gross Domestic Product released Friday showed a much better than expected value, contributing to the drop that took the pair below support.

Technical Outlook

After a rejection seen at the 50 period Exponential Moving Average, the pair broke the previous low (located very close to 1.0960) and finished the week on a strong bearish note. Today we will probably see a continuation of Friday’s downside action but 1.0960 is likely to be tested from below due to the fact that a fast down move is usually followed by a correction to the upside. The economic data released throughout the day will decide the day’s bias.

Fundamental Outlook

Today at 10:00 am GMT the Eurozone Consumer Price Index comes out, showing changes in European inflation. The previous value was 0.3% and for today’s release the forecast is 0.0%. German inflation data (which represents a hefty part of overall European inflation) was already released last week but nonetheless, higher than expected numbers can strengthen the Euro, driving the pair higher.

The U.S. Pending Home Sales come out later in the day, at 3:00 pm GMT, expected to show a change of 0.6% compared to the previous 0.1%. Higher numbers are beneficial for the US Dollar but the indicator is considered to have medium impact.

GBP/USD

Positive U.S. data strengthened the US Dollar, taking the pair significantly lower Friday and re-establishing the control of the bears.

Technical Outlook

Although the support at 1.3880 was broken late in Friday’s trading session, we cannot consider this to be a definitive break because price is still too close to the level. The overall picture is bearish but we cannot rule out a bullish reaction and thus a move above the mentioned level. The oscillators offer mixed signals and not a lot of clues about future direction so today we are likely to see a session driven by the economic data scheduled for release.

Fundamental Outlook

The Pound will be affected today by the British Net Lending to Individuals, released at 9:30 am GMT and expected to show a value of 5.2B, while the previous was 4.4B. The report tracks changes in the total amount of credit issued to individuals and can be a leading indicator of consumer spending, with higher numbers strengthening the Pound.

[GDMFX]

FOREX NEWS: US DOLLAR REMAINS STRONG AHEAD OF MANUFACTURING DATA

EUR/USD

Forex News: Yesterday the Eurozone Consumer Price Index showed a disappointing value, lower than analysts had anticipated, thus the single currency weakened, allowing the pair to travel south.

Technical Outlook

After a brief retracement higher, which confirmed 1.0960 as resistance, the pair moved down, meeting support at 1.0870. Here we are likely to see a stall, sideways movement or even a jump higher but overall the picture is bearish and we anticipate a break of 1.0870, followed by a touch of the key support located at 1.0800.

Fundamental Outlook

At 3:00 pm GMT the U.S. Manufacturing PMI is released, showing the opinions of about 400 purchasing managers from the manufacturing sector regarding business conditions in said sector. The survey usually acts as a leading indicator of economic health and higher numbers strengthen the US Dollar. For today’s release a small increase is anticipated, from the previous 48.2 to 48.5.

GBP/USD

The Pound-Dollar had a session that completely lacked direction, moving above and below minor support. The fundamental scene was lackluster, contributing to the choppy trading session.

Technical Outlook

Yesterday’s price action created another minor support around 1.3840 and the overall direction remains bearish but the next move is hard to anticipate. The Stochastic and Relative Strength Index are starting to move upwards after reaching oversold and this suggests that a move north is next but on the other hand, the main trend is bearish so the extent of this potential move up will be most likely limited. A break of 1.3840 will probably bring in more sellers.

Fundamental Outlook

The British Manufacturing Purchasing Managers’ Index is released today at 9:30 am GMT, and is expected to show a value of 52.3, lower than the previous 52.9. Just like the American indicator with the same name, this survey acts as a leading indicator of economic performance and can strengthen the Pound if it shows higher than anticipated numbers.

[GDMFX]

FOREX NEWS: INDECISION STARTS TO SET IN. FIRST LOOK AT U.S. EMPLOYMENT DATA MAY CLEAR THE FOG

EUR/USD

Forex News: The pair showed choppy movement for the most part of yesterday but a better than expected U.S. Manufacturing PMI gave the US Dollar a boost in the afternoon and brought some volatility.

Technical Outlook

Price action yesterday was mostly characterized by indecision but nonetheless the pair remained below 1.0870 and the greenback benefited from better than anticipated economic data which generated optimism. We maintain our opinion that soon price will reach the key support at 1.0800 but we don’t rule out upside corrections, mostly due to the oversold position shown by the 2 oscillators and the long lower wicks shown by the last candles.

Fundamental Outlook

Today’s highlight is the release of the ADP Non-Farm Employment Change, a report which offers a first look into the United States jobs situation. It is put together by a privately owned company, Automatic Data Processing Inc. (ADP) and doesn’t hold the same importance as the Government released data which comes out 2 days later. However, it’s still considered a high impact indicator and values above the forecast 185K (previous 205K) are usually beneficial for the US Dollar. The scheduled release time is 1:15 pm GMT.

GBP/USD

Although the British Manufacturing PMI showed a disappointing value, the pair climbed in close vicinity of the 50 period Exponential Moving Average. However, most of the gains were erased later in the afternoon.

Technical Outlook

The bullish candles have small bodies and some of them show long wicks in both the upper and lower side. This is a clear sign of indecision and shows that yesterday’s move up is not very solid. The fact that price came in close vicinity of the 50 Period Exponential Moving Average and then moved lower, adds to our opinion that a bigger drop is likely to follow, with the first target being 1.3880, followed by 1.3840. To the upside, the 50 EMA is still first resistance.

Fundamental Outlook

The Pound continues to be affected by Purchasing Managers’ Indexes and this time it’s the Construction PMI, which will offer insights into the performance of the said sector. Today’s forecast for this indicator is 55.5 and the time of the release is 9:30 am GMT. As a rule of thumb, higher numbers strengthen the Pound and as always, the U.S. employment data will have a direct impact on the pair’s movement.

[GDMFX]

FOREX NEWS: EURO LINGERS BETWEEN SUPPORT AND RESISTANCE, POUND GAINS

EUR/USD

Forex News: The euro-dollar continued to drift without direction and despite a better than expected ADP Non-Farm Employment report, the pair didn’t make any significant downside advances yesterday.

Technical Outlook

Indecision now rules the pair and it seems like market participants are waiting for Friday’s NFP report before choosing a clear direction. For now the level at 1.0870 can offer some resistance but not a strong one and support is still located at 1.0800. The oversold position of the oscillators and the fact that bears haven’t made significant advances during the last days suggests that a move up is next but the medium term downtrend is still bearish.

Fundamental Outlook

The Euro will not be affected by major economic indicators today and on the US Dollar side we have the Non-Manufacturing PMI, scheduled at 3:00 pm GMT. This is a survey of purchasing managers outside the manufacturing sector and acts as a leading indicator of economic health, with mixed impact on the greenback. Usually higher numbers than the expected 49.8 (previous 53.5) strengthen the US Dollar.

GBP/USD

The Pound moved higher yesterday, even if the British Construction PMI showed a disappointing value. The release created a brief moment of downside movement but the bulls quickly took control and took the pair to new highs.

Technical Outlook

The pair broke the resistance zone created by the 50 period Exponential Moving Average and the level at 1.4050. Unless we see a quick reversal here, the pair is likely to travel into 1.4125 but by the time the level is touched, the Stochastic and Relative Strength Index will probably become overbought, thus increasing the chances of a drop south.

Fundamental Outlook

The last British Purchasing Managers’ Index in the series is announced today at 9:30 am GMT: the Services PMI. This survey is of course focused on business and economic conditions in the services sector and can strengthen the Pound if it shows readings above the forecast of 55.1. The impact is often muted, especially if the actual value does not differ a lot from forecast.

[GDMFX]

FOREX NEWS: EURO, POUND GAIN AGAINST THE US DOLLAR. A SURPRISING NFP REPORT CAN TURN THE TIDE

EUR/USD

Forex News: The Euro strengthened against the US Dollar yesterday and moved decisively above immediate resistance. The climb was mainly influenced by technical reasons as the US Non-Manufacturing PMI came close to analysts’ forecast, thus the impact was mild.

Technical Outlook

The current up move is rapidly approaching the 50 period Exponential Moving Average and the resistance at 1.0960. This level acted as a good barrier for price in the past so we can expect some sort of reaction when it will be touched again. Also, the moving average is in close vicinity, creating a confluence zone which will be tough to break. The probability of a reversal in this zone is high but today’s price direction will be heavily influenced by the U.S. jobs data.

Fundamental Outlook

The most anticipated release of the week is finally here: the U.S. Non-Farm Payrolls. This report is widely considered the most important employment related data for the U.S. economy and shows how many new jobs were created during the previous month. A higher number than the anticipated 195K (previous 151K) is beneficial for the US Dollar, suggesting also that consumer spending is likely to increase in the near future. The scheduled time of release is 1:30 pm GMT and high volatility is expected.

GBP/USD

Despite a disappointing survey for the Services sector, the Pound continued to gain and the pair moved above resistance during yesterday’s trading session.

Technical Outlook

After moving above 1.4050, the pair re-tested it and bounced higher, thus turning the level into support. Also, price is trading above the 50 period Exponential Moving Average so the short term bias is bullish but from a longer term perspective, we are still in a downtrend. Note that the oscillators are moving into overbought and this increases the chances of a move lower but as mentioned before, the fundamental aspect will have a big influence on today’s price direction.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases but all eyes will be on the U.S. Non-Farm Payrolls, which will have a direct impact on the pair.

[GDMFX]

FOREX NEWS: EFFECTS OF THE NFP STILL IN PLAY. THE US DOLLAR RETALIATES

EUR/USD

Forex News: The U.S. Non-Farm Payrolls report released Friday showed that 242K new jobs were created during the previous month. This was more than the anticipated 195K but the pair still moved higher, after just a brief dip.

Technical Outlook

The effects of the better than expected NFP report are likely to be seen early this week and we expect price to move lower after the touch of 1.1040 resistance, seen Friday. Adding to this bias is the overbought position of the Stochastic and the fact that the Relative Strength Index is close to its 70 level (almost overbought). The first target for the day is 1.0960 but if 1.1040 is broken to the upside, we expect a touch of 1.1085.

Fundamental Outlook

Early at 7:00 am GMT the German Factory Orders are released, showing changes in the value of total orders placed with factories for industrial products. A higher change than the anticipated -0.4% suggests that manufacturers will increase their activity to fill these orders and this usually has a positive impact on the Euro but the extent is limited.

Also today, the Eurogroup Meetings take place and this may trigger some volatility if important matters are discussed. Keep in mind that the Meetings are closed to the press but sometimes participants talk to journalists before the meetings have concluded.

GBP/USD

Similar to the euro-dollar, the Cable had a bullish day Friday, although the U.S. jobs market showed improvement. The pair remained above the moving average, further weakening the downtrend.

Technical Outlook

Friday’s price action confirmed 1.4125 as short term support so we can now expect this level to reject falling prices. The resistance at 1.4230 was tested but not broken and today we expect the pair to bounce lower from this zone, considering that both oscillators are overbought. It’s possible to see ranging price action, with the pair confined between the two levels mentioned earlier.

Fundamental Outlook

There are no major indicators on the Pound’s schedule for today so we expect price direction to be influenced only by the technical aspect.

[GDMFX]

FOREX NEWS: POTENTIAL BREXIT TAKES CENTER STAGE, CARNEY’S TESTIMONY EYED

EUR/USD

Forex News: We’ve had a fairy uneventful day yesterday and price was not much affected by the release of economic indicators. Overall the day was bearish and the pair breached support.

Technical Outlook

Price bounced lower at 1.1040 resistance, helped also by the overbought position of the Stochastic and now the pair is testing the support at 1.0960. The 50 period Exponential Moving Average is also in close vicinity but neither of the 2 mentioned forms of support were clearly broken so we are dealing with a classic bounce-or-break scenario: a break of support would increase the chances of a move into 1.0870 while a bounce would make 1.1040 the first target.

Fundamental Outlook

The ECOFIN Meetings take place today, attended by Finance Ministers from the European Union member states. The meetings are closed to the press so during the day we don’t expect major moves unless some participants talk to journalists; however, once the meetings have concluded, a formal statement will be released.

GBP/USD

The pair had a slow start of the week and remained between support and resistance yesterday. The fundamental scene was lackluster and this contributed to the lack of clear direction.

Technical Outlook

The pair seems undecided as far as the next move is concerned but the short term bias remains bullish since the bears didn’t even manage to threaten support yesterday. The immediate target is the resistance at 1.4230 but the Stochastic is just curving downwards, coming out of overbought so it’s possible to see another bounce lower if the level is touched again. A lot will depend on Mark Carney’s speech scheduled today, which will probably overshadow the technical aspect.

Fundamental Outlook

At 9:15 am GMT, Bank of England Governor Mark Carney will testify before the Parliamentary Committee, with the topic being United Kingdom’s European Union membership. A potential separation of the UK from the European Union (widely known as Brexit) would trigger huge moves on the Pound and this is the reason why today’s speech is the main headline. The impact is not known and depends mostly on Carney’s attitude and answers.

[GDMFX]

FOREX NEWS: INCREASED BREXIT RISKS WEAKEN THE POUND, EURO SUFFERS FROM LACKLUSTRE FUNDAMENTAL SCENE

EUR/USD

Forex News: Yesterday the Euro and US Dollar had a normal trading session, without any major surprises. The pair bounced at support but failed to break resistance.

Technical Outlook

Price touched twice in a short while the resistance located at 1.1040 but failed to break it, showing that the bulls lack clear strength. On top of that, both the Stochastic and Relative Strength Index are hovering close to overbought and all this increases the chances of a bounce lower. If this move occurs, the first support and target is represented by the 50 period Exponential Moving Average, followed by the level at 1.0960. To the upside the first potential resistance level is located at 1.1085.

Fundamental Outlook

Both the Euro and US Dollar lack major economic indicators today so we expect a trading session driven by the technical aspect. The pair is likely to remain choppy, in anticipation of Thursday’s ECB rate decision.

GBP/USD

Mark Carney’s speech triggered Pound weakness yesterday and we saw a false break of resistance, followed by a move lower, which did not threaten support.

Technical Outlook

Risks of a potential Brexit take their toll on the Pound so the current move below 1.4230 is likely to extend at least into 1.4125. The 50 period Exponential Moving Average is also in close vicinity of the mentioned level so this area is likely to reject price higher; however, a bearish break of this zone will show that the sellers are trying to regain control of the pair, making 1.4050 a probable target.

Fundamental Outlook

Today at 3:00 pm GMT, NIESR will release their estimate of the British Gross Domestic Product. The impact of this indicator varies from release to release but usually, numbers above the previous 0.4% strengthen the Pound and the opposite is true for values below 0.4%.

[GDMFX]

FOREX NEWS: ECB DEPOSIT RATE: TO CUT OR NOT TO CUT?

EUR/USD

Forex News: The resistance at 1.1040 rejected price yesterday and overall we had a bearish session, with a lacklustre fundamental environment.

Technical Outlook

After the bounce near 1.1040, the pair headed into the 50 period Exponential Moving Average and touched 1.0960 support. Currently this zone is not breached and price shows some signs of rejection (long wicks in the lower part of the candles) but the Stochastic and Relative Strength Index both show downside momentum. This creates a mixed situation and makes us believe that today’s the ECB rate decision will dictate the next move.

Fundamental Outlook

At 12:45 pm GMT the European Central Bank announces their decision regarding rates. The interest rate is not expected to change (0.05%) but the deposit rate is expected to drop from the current -30% to -0.40%. This will most likely create a strong impact on the Euro and probably downside action but extra caution is recommended. ECB President Mario Draghi will hold a press conference at 1:30 pm GMT, discussing the rate decision and this is another reason for increased volatility.

GBP/USD

The British GDP estimate was released 23 minutes earlier than initially scheduled and showed a value of 0.3%, lower than the forecast 0.4%. However, this didn’t affect much the currency and the pair had a choppy trading session.

Technical Outlook

Price is testing the resistance at 1.4230 once again but the oscillators are still moving south and neither side seems in clear control. A bullish break of 1.4230 followed by a re-test from above would suggest that the pair’s next destination is the level at 1.4350 and a move below the 50 period Exponential Moving Average will make 1.4050 a likely target (probably not reached in one day). It’s also possible to see a ranging session today because the Pound is not affected by major news releases.

Fundamental Outlook

The United Kingdom didn’t prepare any economic indicator releases for today so the technical aspect will be the main focus.

[GDMFX]

FOREX NEWS: THE AFTERMATH OF THE ECB SURPRISE MOVE

EUR/USD

Forex News: The ECB decided to cut the interest rate to 0.00% and the deposit rate to -0.4%, facts which initially weakened the Euro, as expected. However, a sharp rise of more than 300 pips soon followed and now the pair is doing the opposite of what was expected after a cut of interest rates.

Technical Outlook

The market’s next move is extremely hard to predict, considering the reaction seen yesterday. After such a strong move, we are likely to see a retracement lower or even a period of sideways movement. The levels to watch remain 1.1040 as potential support and 1.1160 as potential resistance. We recommend caution throughout the day.

Fundamental Outlook

The fundamental scene is calm today and no important indicators are released by either Europe or the United States. This fact is likely to generate a slow and possibly choppy trading session.

GBP/USD

Although the Pound wasn’t affected yesterday by any economic indicators, the surprising decision of the European Central Bank extended its effects on the pound – dollar pair as well.

Technical Outlook

Similar to the EUR/USD, price moved lower then reversed immediately and broke resistance, creating a difficult to trade environment. A quick move below 1.4230 would suggest that the bulls cannot continue their “attack” and that we will see a move into the 50 period Exponential Moving Average and 1.4125. This level is also the last tested support as confirmed by yesterday’s price action. If the pair remains above 1.4230 we are likely to see a touch of 1.4350.

Fundamental Outlook

At 9:30 am GMT the British Trade Balance is released, expected to show a value of -10.3B compared to the previous -9.9B. This is a medium impact indicator that shows the difference between imported and exported goods; usually a number that’s higher than forecast strengthens the Pound but the impact may vary from release to release.

[GDMFX]

FOREX NEWS: TECHNICAL WARNING: OVERBOUGHT LEVELS MAY TRIGGER BEARISH ACTION

EUR/USD

Forex News: Friday the pair retraced lower as it was expected after such a huge bullish move, but soon bounced higher, confirming 1.1085 as support.

Technical Outlook

Today we are likely to see slow price action, mainly because the pair will not be affected by important economic indicators. The main levels to watch are 1.1210 as resistance and 1.1085 as support but we don’t expect to see a break of either one. The Stochastic and Relative Strength Index are both coming down from overbought territory and this increases the chances of downside action but the short term bias is bullish.

Fundamental Outlook

The Eurozone Industrial Production numbers are released today at 10.00 am GMT, showing changes in the total value of output delivered by the industrial sector. The expected change is 1.7% compared with last month’s -1.0% but the indicator has a very low impact more often than not; still, higher numbers can be beneficial for the Euro.

GBP/USD

The British Trade Balance released Friday matched analysts’ expectations and didn’t have a strong impact on the Pound but nonetheless, the pair continued the bullish momentum started Thursday and moved above resistance.

Technical Outlook

The break of the resistance at 1.4350 shows that the bulls control short-to-medium price action and that we are likely to see a break of 1.4450 en route to 1.4565. However, we don’t expect to see such strong moves today and instead expect a re-test from above of 1.4350. If this re-test results in a bounce, the level will turn into support and the chances of a bullish continuation will increase. Both oscillators are overbought, a fact that makes bullish advances more difficult.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today so we expect a slow session, mainly driven by the technical aspect.

[GDMFX]

FOREX NEWS: U.S. RETAIL SALES – A CATALYST FOR THE GREENBACK’S RECOVERY

EUR/USD

Forex News: Eurozone’s Industrial Production numbers came out better than expected yesterday, but the release didn’t have a strong impact and the overbought condition of both oscillators contributed to a bearish session.

Technical Outlook

The overall bias remains bullish but the pair is likely to break the support at 1.1085 and to reach the 50 period Exponential Moving Average. The Stochastic and Relative Strength Index are moving out of overbought, thus increasing the chances of a continued move lower but only a break of the 50 period EMA would confirm such a scenario. In the meantime, keep in mind that the huge bullish impulse seen last week may continue; 1.1160 is the first barrier in front of rising price.

Fundamental Outlook

The U.S. Retail Sales are today’s main event, scheduled for release at 12:30 pm GMT. The indicator measures changes in the total volume of sales made through retail venues and is usually a strong market mover. Higher values than the expected -0.1% (previous 0.2%) are beneficial for the US Dollar, suggesting increased economic activity.

GBP/USD

The pair wasn’t affected by any news or economic releases but the US Dollar erased some of the losses incurred last week and moved below 1.4350.

Technical Outlook

The current move down is a correction to the medium term uptrend started at the end of February and once this move is completed, we expect price to continue on its way to 1.4450 and possibly 1.4565. For the time being, both oscillators are moving south, coming from overbought so we favour a possible move into the 50 period Exponential Moving Average; there, the chances of bullish action will increase.

Fundamental Outlook

The technical aspect will be the day’s main focus as the Pound will not be affected by any economic releases; however, the U.S. Retail Sales will have a direct impact on the pair’s movement.

[GDMFX]

FOREX NEWS: IS THE FED PREPARING A HUGE SURPRISE? ALL EYES ON FED RATE MEETING

EUR/USD

Forex News: The Euro was resilient yesterday but the support at 1.1085 was breached and the pair came close to the 50 period Exponential Moving Average. The U.S. Retail Sales matched analysts’ expectations and overall we had a slow, grinding trading session.

Technical Outlook

The pair is approaching the 50 period Exponential Moving Average on a four hour chart and this may be a good place for the bulls to enter the market again, taking price higher. The first upper target is the resistance at 1.1160, followed by the more important level located at 1.1210. To the downside the moving average is the first barrier and a break would open the door for a move into 1.0960 during the next days. The technical aspect will be secondary to the fundamental today as the Fed makes public the rate decision.

Fundamental Outlook

At 12:30 pm GMT the US Dollar will be affected by the release of the American CPI, which is considered a key gauge of inflation. The forecast is -0.2% and higher numbers are usually beneficial for the currency. Later in the day, at 6:00 pm GMT the Fed will announce their rate decision, accompanied by a FOMC Rate Statement and the FOMC Economic Projections on economic growth for the next 2 years. The rate is not expected to change from the current <0.50% but surprises can happen and on top of that, half an hour later (6:30 pm GMT), Fed Chair Janet Yellen will hold a press conference, discussing the rate; this is another reason for increased volatility, thus caution is recommended until things calm down.

GBP/USD

The pair broke support yesterday and soon after that, the US Dollar erased almost all losses incurred last week. The session was strongly bearish and now price is trading below the 50 period Exponential Moving Average.

Technical Outlook

The pair’s fast travel south is likely to touch the support at 1.4125 and retrace higher, even if afterwards the level might be broken to the downside. The Stochastic and Relative Strength Index are both approaching oversold and the medium term trend is bullish, thus favouring a move up once support is touched. The first upward target is the 50 period Exponential Moving Average.

Fundamental Outlook

The British Claimant Count Change is released today at 9:30 am GMT and expected to show a number of -8.8K (previous -14.8K). The indicator shows the change in the number of people asking for unemployment related benefits and usually has a medium impact on the Pound, with lower numbers strengthening it. Later in the day, the pair will be directly affected by the Fed cluster of events so caution is recommended throughout the day.

[GDMFX]

FOREX NEWS: DOVISH FED WEAKENS THE US DOLLAR ACROSS THE BOARD

EUR/USD

Forex News: The pair had a bearish tone ahead of the FOMC events but the dovish speech of Fed Chair Janet Yellen and the FOMC projections of 2 rate hikes during 2016 instead of 4, created substantial US Dollar weakness and a strong move up.

Technical Outlook

The dovish stance adopted by the Fed is likely to bring additional greenback weakness and we will probably see an attempt to break the resistance zone surrounding 1.1300. However, it’s possible for price to bounce lower at 1.1210, considering that the level acted as strong resistance in the past and at the moment it is not yet broken. A bounce lower would find potential support at 1.1160.

Fundamental Outlook

The Final version of the European Consumer Price Index is released today at 10:00 am GMT, showing changes in inflation throughout Europe. This version is the least important because German inflation data and European Flash Estimate have been announced already, but still the release shouldn’t be overlooked as higher numbers than the expected -0.2% could strengthen the Euro.

On the US Dollar side we have the Philly Fed Manufacturing Index, which offers insights into the state of the manufacturing sector in the Philadelphia district. The release is scheduled at 12:30 pm GMT and the forecast is -1.4; higher numbers are beneficial for the greenback.

GBP/USD

The US Dollar had a strong session against the Pound before the Fed release, but the dovish outlook presented by Fed Chair Yellen weakened it and triggered a perfect bounce higher from support.

Technical Outlook

The support at 1.4050 proved too much for the sellers and once it was touched, price moved strongly north. If the current move can break clearly the 50 period Exponential Moving Average and the level at 1.4230, then we the chances of a move back up into 1.4350 will increase; otherwise, the pair is likely to descend into 1.4125 again.

Fundamental Outlook

At 12:00 pm GMT the Bank of England will announce the interest rate but no change is expected (current 0.50%). At the same time a Monetary Policy Summary is released, outlining the reasons that generated the decision. Even if the BOE will maintain rates at the current level (highly probable), the event is likely to trigger some volatility at the time so caution is recommended.

[GDMFX]

FOREX NEWS: SMALL DIPS EXPECTED AS THE US DOLLAR CONTINUES TO DETERIORATE

EUR/USD

Forex News: The bullish momentum started Wednesday continued throughout yesterday’s trading session and the US Dollar continued to lose ground against its peers. The U.S. Manufacturing data surpassed analysts’ expectations but this only gave a small boost to the greenback.

Technical Outlook

The pair is now struggling to break the resistance around 1.1310 but both the Stochastic and Relative Strength Index are in overbought territory, thus increasing the chances of a move below the said resistance. The first potential support is represented by the level at 1.1210 and if touched, we expect price to resume its upward motion. On the other hand, a break of 1.1310 would delay the anticipated retracement until 1.1375 is reached.

Fundamental Outlook

The only notable event of the day is the release of the U.S. Consumer Sentiment survey put together by the University of Michigan. This survey tries to gauge financial confidence among consumers and acts as a leading indicator of consumer spending, thus higher values than the forecast 92.1 are usually beneficial for the US Dollar; the scheduled release time is 2:00 pm GMT.

GBP/USD

The Bank of England did not change the interest rate but this was widely anticipated so the event didn’t trigger massive moves. However, we had a bullish session yesterday, continuing the previous impulse.

Technical Outlook

The pair moved strongly north and this shows that the bulls are in control of short-to-medium term price action. However, the resistance at 1.4450 is not yet clearly broken and both oscillators are approaching overbought. This may suggest that once the current bull run slows down, price will start a retracement to the downside. If 1.4450 is broken then this will become a good support, otherwise 1.4350 is likely to stop falling prices.

Fundamental Outlook

The United Kingdom didn’t prepare any major economic or financial releases for today so price direction will be influenced by the US consumer survey and by the technical aspect.

We hope you had a profitable trading week and we wish you a relaxing weekend.

[GDMFX]

FOREX NEWS: BULLS SLOW DOWN, BEARISH PRESSURE MOUNTS

EUR/USD

Forex News: The U.S. Consumer Sentiment survey released Friday showed a worse than expected figure but the pair moved slowly to the downside nonetheless. This move was mostly triggered by technical reasons.

Technical Outlook

The strong climb seen last week triggered a rubber-band effect and thus a retracement lower which doesn’t necessarily mean that the upward motion will reverse. Instead, we consider that the bullish impulse will continue at least until 1.1375 is reached but probably this won’t happen today. We are likely to see a slow session, with movement between 1.1320 and 1.1210.

Fundamental Outlook

The day lacks major releases and the only notable economic indicator comes from the United States in the form of the Existing Home Sales. The indicator shows the annualized number of houses sold during the previous month, without taking into consideration new buildings. A higher number is usually beneficial for the greenback but the impact is often mild; the expected figure is 5.32M and the time of release is 2:00 pm GMT.

GBP/USD

Friday was slow and the pair didn’t make significant advances to either side but this was expected after such a strong climb as the one seen last week.

Technical Outlook

Recent price action confirmed 1.4450 as short term support and now we can expect the resistance at 1.4565 to be touched in the near future. However, both the Relative Strength Index and the Stochastic are moving in overbought territory, meaning that bearish pressure is starting to accumulate. This doesn’t necessarily mean that we are in for a big move down but warns that further bullish advances may be harder to achieve. Keep an eye on 1.4565 as this level is the next resistance.

Fundamental Outlook

The Pound will be mostly driven by the technical aspect as no major indicators have been scheduled for release today.

[GDMFX]

FOREX NEWS: GERMAN ECONOMIC SURVEYS, BRITISH INFLATION DATA TO DECIDE THE DAY’S BIAS

EUR/USD

Forex News: Bearish pressure hindered further advances to the upside yesterday and the pair is now in the middle of a retracement which is likely to hit support.

Technical Outlook

Once the resistance zone near 1.1320 was touched, both oscillators were overbought and this helped generate the current retracement to the downside. We expect the downwards pressure to continue until 1.1210 is touched and possibly the 50 period Exponential Moving Average but once (or if) price gets there, we expect the bulls to step in and take price higher, especially if this will coincide with an oversold position of at least one oscillator.

Fundamental Outlook

The first event of the day is the release of the German IFO Business Climate, scheduled at 9:00 am GMT and expected to show a value of 106.1. This is a survey of about 7,000 businesses that are asked to rate their economic expectations for the next 6 months.

One hour later, at 10:00 am GMT the German ZEW Economic Sentiment comes out, showing the opinions of about 275 German investors and analysts about the economic environment. The forecast is 6.3, a hefty increase from the previous 1.0. Both surveys act as leading indicators of economic health and can strengthen the Euro if they post better than expected figures.

GBP/USD

After the strong and fast climb seen last week, the pair was in need of a retracement to the downside and yesterday was the day this pullback occurred, generating a bearish trading session.

Technical Outlook

We expect price to continue it’s descent until the 50 period Exponential Moving Average is touched. Both oscillators are coming out of overbought, favouring an extended move south but keep in mind the current trend is bullish so a touch of either 1.4350 support or the moving average, might generate another push to the upside.

Fundamental Outlook

The British Consumer Price Index comes out at 9:30 am GMT and is expected to show an increase of 0.4% compared to the previous 0.3%. The CPI is the main gauge of inflation and strongly influences the currency, with higher values being considered beneficial for the Pound, so we can expect to see bullish action if the actual number exceeds analysts’ forecast.

[GDMFX]

FOREX NEWS: BRUSSELS EXPLOSIONS GENERATE MARKET INSTABILITY

EUR/USD

Forex News: The financial market was heavily influenced yesterday by two explosions that took place in Brussels and resulted in human casualties. The pair moved lower and reached support, in what was bearish session.

Technical Outlook

Price reached the key level at 1.1210 and the 50 period Exponential Moving Average; this increases the chances of bullish movement but on the other hand, a break of this zone would suggest that further downside will follow. The Stochastic has reached oversold and the pair is in a medium term uptrend so this increases the probability of a move up; however, the Relative Strength Index is nowhere near its oversold level so the picture is rather blurry and caution is recommended.

Fundamental Outlook

The turmoil in Brussels is likely to affect today’s price movement and other than that the US Dollar will be influenced by the New Home Sales numbers scheduled at 2:00 pm GMT. The indicator shows the annualized number of new houses sold during the previous month and can have a positive impact on the greenback if higher figures are posted; the forecast is 512K while the previous was 494K.

GBP/USD

The British CPI showed a disappointing value of 0.3% and the Brussels events took their toll on the Pound; all this triggered a massive selloff and a move below 1.4230.

Technical Outlook

The pair broke 1.4350 and the 50 period Exponential Moving Average, showing that bearish pressure was present and that the sellers are ready to take back control. However, a major role was played by the sad events in Brussels. Price is already showing rejection near the support at 1.4230 and the Stochastic is starting to curve upwards in oversold territory; on top of that, price travelled more than 200 pips without clear retracement so today we expect to see limited upside movement in the form of retracements. If 1.4230 can be broken decisively, the downside is likely to continue.

Fundamental Outlook

Price direction today will be influenced by the U.S. housing data and by the technical aspect as the United Kingdom didn’t schedule any important economic releases.

[GDMFX]

FOREX NEWS: US DOLLAR ERASES LOSSES, BEARISH PRESSURE STILL PRESENT

EUR/USD

Forex News: Yesterday’s trading session was still controlled by the sellers but downside movement lacks strong momentum and instead price is slowly crawling south. The U.S. New Home Sales showed the expected figure so the event didn’t create huge volatility.

Technical Outlook

The pair is having difficulties breaking the 50 period Exponential Moving Average to the downside, movement is slow and the latest trend is up. On top of that, the Stochastic has already reached oversold and is now struggling to move out of this territory so a lot of clues point towards a potential move up. If this is next, then the resistance at 1.1210 will be the first barrier, followed by the more distant one at 1.1320. To the downside, 1.1085 is the first support but this level is far away and the chances of it being hit today are slim.

Fundamental Outlook

At 12:30 pm GMT the United States will release the Durable Goods Orders, an indicator which shows changes in the value of orders placed for goods with a life expectancy of more than 3 years. The expected figure is -3.0%, a hefty drop from the previous 4.9 and usually lower numbers weaken the US Dollar because they show decreased economic activity.

GBP/USD

The Pound continued to weaken against the greenback and the support at 1.4230 is now clearly broken. Price did not retrace higher yesterday and instead just moved sideways for a couple of candles.

Technical Outlook

A bullish pullback is still anticipated and now both the Stochastic and Relative Strength Index are below their respective oversold levels, thus increasing the chances of upside movement. This potential pullback is likely to find resistance at 1.4230 but once it’s complete, we expect the pair to head towards the last known support located at 1.4050.

Fundamental Outlook

An important British economic indicator is released today at 9:30 am GMT: the Retail Sales. The forecast is a change of -0.7% from the previous 2.3% and if it comes true, we are likely to see Pound weakness because sales made at retail levels represent a major part of overall economic activity. As always, the U.S. indicators will have a direct impact on the pair’s movement.

[GDMFX]

FOREX NEWS: CHOPPY PRICE ACTION DURING GOOD FRIDAY

EUR/USD

Forex News: The pair continued to grind lower yesterday, with just a small retracement to the upside, visible on the lower time frames. The U.S. Durable Goods Orders came out slightly better than forecast but still lower than previous and the release didn’t have a strong impact.

Technical Outlook

Although the pair is now below the 50 period Exponential Moving Average, the descent is slow and lacks momentum. On top of that, the Stochastic is entering oversold for the second time in a short while and this is a strong indication that a move up will soon follow. If this happens, the first barrier is the level at 1.1210 but keep in mind that bearish pressure is still present and the greenback is strengthening.

Fundamental Outlook

Most European banks are closed today in observance of Good Friday; this is likely to bring irregular volatility and a difficult trading session. On the US Dollar side we have the Final version of the Gross Domestic Product, scheduled for release at 12:30 pm GMT and expected to show a value of 1.0%, same as previous. The GDP is an economy’s main gauge of performance and although this is the least important version, higher numbers can strengthen the greenback.

GBP/USD

The Pound continued to weaken against the US Dollar and the pair continued its descent until it came in close vicinity to the support at 1.4050 where a retracement is in the making.

Technical Outlook

Both the Stochastic and the Relative Strength Index are oversold for a relatively long time and the support at 1.4050 is showing good rejection. All this makes us anticipate a stronger retracement to the upside but doesn’t exclude another encounter with 1.4050 once this pullback is complete. British banks are also closed due to Good Friday so price behaviour is likely to be irregular and choppy.

Fundamental Outlook

The United Kingdom hasn’t scheduled any economic indicator releases for today so price direction will be influenced by the technical aspect and by the U.S. GDP numbers.

We hope you had a profitable trading week and we wish you a relaxing weekend.