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442

FOREX NEWS: THIN LIQUIDITY AS EASTER LEAVES ITS MARK ON THE FINANCIAL MARKETS

EUR/USD

Forex News: Price action Friday was choppy and mostly sideways, mainly because European banks were closed due to Good Friday. The Final version of the U.S. GDP showed a higher than expected value but the release was mostly overlooked.


Technical Outlook

The sideways movement seen Friday is likely to continue today because of low liquidity generated by the Easter Holiday. The levels to watch are 1.1210 as resistance and 1.1085 as support but an accurate technical prediction cannot be made for the reason mentioned above. Also, volatility is likely to be irregular, meaning we may see strong moves followed by reversals or ranging periods.

Fundamental Outlook

Europe celebrates Easter today, thus major banks will be closed and economic activity kept to a minimum. This will probably translate into slow and irregular movement. On the US Dollar side the most notable indicator is the Pending Home Sales, scheduled for release at 2:00 pm GMT and expected to show a 1.2% change compared to the previous -2.5%. Higher numbers are beneficial for the greenback, showing a healthy house market but the impact is not always strong.

GBP/USD

Similar to the other pair, the GBP/USD had a slow session Friday, without any spectacular advances to either side.


Technical Outlook

Probably the pair will show irregular movement today but the latest bias is bearish and a bullish retracement occurred late last week. Normal behaviour after a move against the trend is a resumption of the previous trend, thus a move lower is expected; however, given the circumstances, caution is advised. First important lower barrier remains 1.4050 while to the upside the 50 period Exponential Moving Average may act as resistance.

Fundamental Outlook

Today the Pound will have a slow day from a fundamental perspective as no major indicators are released and most UK banks are closed due to Easter Monday.

443

FOREX NEWS: LIQUIDITY BACK TO NORMAL, ALL EYES ON FED CHAIR YELLEN’S SPEECH

EUR/USD

Forex News: Price action was slow for the most part of yesterday’s early trading session but in the afternoon a bullish breakout took place and now resistance is being tested.


Technical Outlook

The pair broke above the 50 period Exponential Moving Average and is testing 1.1210 from below. In this move a big part was played by the thin liquidity generated by the Easter Holiday so once things get back to normal we may see a move lower. If this occurs, then 1.1210 will be confirmed as resistance and the next target will become the support zone around 1.1085.

Fundamental Outlook

The U.S. Consumer Confidence survey is today’s first potential market mover, scheduled for release at 10:00 am GMT and expected to show a number of 93.9. About 5,000 households are involved in this survey and usually a higher value suggests that respondents are confident about the economic situation and possibly that consumer spending will increase; this usually brings strength to the US Dollar.

The second important event of the day is Fed Chair Yellen’s speech scheduled at 11:30 am GMT and titled Economic Outlook and Monetary Policy. As always when heads of central banks deliver public speeches, the respective currency can show strong and sometimes irregular movement so caution is advised.

GBP/USD

The Pound made substantial advances yesterday, breaking above 1.4230 and the 50 period Exponential Moving Average on a 4-hour chart.


Technical Outlook

Yesterday’s move can be attributed to the low liquidity created by the Easter Holiday but in any case, the pair is now sitting above 1.4230 and a bullish continuation is very possible. If moves south occur, 1.4230 may act as support, followed by the 50 period Exponential Moving Average but otherwise the resistance around 1.4350 is the next destination.

Fundamental Outlook

The main focus today will be on the technical aspect because no major economic indicators are scheduled for release.

444

FOREX NEWS: CHOPPY PRICE ACTION AHEAD OF U.S. JOBS, GERMAN INFLATION

EUR/USD

Forex News: Yesterday we didn’t see much action but the pair did reach 1.1210 and is now showing signs of rejection. The U.S. consumer survey came out better than anticipated but the impact was mild.


Technical Outlook

Price is trapped between the 50 period Exponential Moving Average and the resistance at 1.1210 but a breakout is likely to occur today and the direction of this breakout is likely to determine the bias for the remainder of the day. The last couple of candles show long wicks in their upper part and this is a sign of rejection so we slightly favour the short side.

Fundamental Outlook

The first important event of the day is a look at European inflation with the release of the German Preliminary Consumer Price Index, scheduled at 12:00 pm GMT. An increase of 0.6% is expected (previous 0.4%) and if better numbers are posted, the Euro is likely to strengthen.

At 12:15 pm GMT, Automatic Data Processing Inc. will release their version of the Non-Farm Employment Change, showing how many new jobs were created in the previous month (excluding the farming industry and government). Although this report is not as important as the Government data that comes out 2 days later (Non-Farm Payrolls), higher numbers are usually beneficial for the US Dollar because a higher number of employed people suggests that consumer spending is likely to pick up in the near future.


GBP/USD

The pair continued yesterday the bullish movement started early in the week and bounced higher off of the 50 period Exponential Moving Average. The economic data didn’t have a strong impact and just created a small retracement lower.


Technical Outlook

The moving average acted as good support for the pair and pushed price higher even if 1.4230 was briefly breached. For today we expect the bullish movement to continue and price to approach 1.4350. Although this level doesn’t look very strong, on a zoomed out chart it’s clear that it rejected price in the past so it may do so again. Keep an eye on the oscillators which are approaching overbought, a fact that may hinder upside movement.

Fundamental Outlook

The Pound has a slow day again so the only major event is the release of the U.S. jobs data; other than that, the technical aspect will play a major role, as always.

445

FOREX NEWS: EUROPEAN INFLATION STILL IN THE MIX, AS THE US DOLLAR TRIES TO ERASE LOSSES

EUR/USD

Forex News: German inflation increased 0.8% as shown by yesterday’s German Consumer Price Index and the Euro responded positively, strengthening and taking the pair above resistance. The U.S. jobs data came close to analysts’ expectations and did not have a substantial impact.


Technical Outlook

Price is approaching the resistance at 1.1375 and if this level is broken, we expect a move into 1.1450. However, we must note the extreme overbought condition of both the Stochastic and the Relative Strength Index, thus we expect some sort of retracement lower before the assault on the mentioned resistance. First lower barrier and target is the level at 1.1320.

Fundamental Outlook

Inflation is again the day’s headline, but this time we are talking about the CPI for the entire Eurozone (Flash Estimate version). The release is scheduled at 9:00 am GMT and the expected change is -0.1% (previous -0.2%). A higher value usually strengthens the Euro, taking the pair higher and the opposite is true for a lower value.

GBP/USD

The US Dollar weakened against the Pound as well, allowing the pair to climb above 1.4350 and to breach 1.4450, generating a bullish trading session.



Technical Outlook

Similar to the other pair, the Stochastic and Relative Strength Index are overbought and 1.4450 acted as strong resistance in the past so we expect bearish movement at this level or possibly at the previous significant high (1.4510). The first potential support is located at 1.4350 but keep in mind the short term trend is up so additional bullish movement after the said pullback is a distinct possibility.

Fundamental Outlook

Bank of England Governor Mark Carney will hold a press conference at the Financial Stability Board Plenary Meeting. The event takes place in Tokyo and the scheduled time is 7:00 am GMT. Whenever heads of central banks speak publicly, the impact may be strong, thus caution is recommended.

Another important British event is the release of the Final version of the Gross Domestic Product, scheduled at 8:30 am GMT. Although this is the least important version of the GDP, higher numbers are usually beneficial for the currency so bullish movement can be expected if the estimated figure of 0.5% is exceeded.

446

FOREX NEWS: NON-FARM PAYROLLS TO “MAKE-OR-BREAK” THE US DOLLAR RECOVERY

EUR/USD

Forex News: After a brief period of sideways movement, yesterday the pair continued on its bullish route, moving clearly above resistance. The European inflation numbers came out close to analysts’ forecast and this was viewed as positive by market participants.



Technical Outlook

After the strong movement seen over the past few days, we expect a period of sideways price action and even bearish pullbacks due to the overbought condition of the Stochastic and Relative Strength Index. The level at 1.1375 was an important turning point in the past but now price didn’t even flinch when it passed it so either the bulls are very strong or the current break is false and price will soon return below the mentioned level. Probably this question will be answered today by the release of the U.S. jobs data.

Fundamental Outlook

The most important release of the week is scheduled today at 12:30 pm GMT: the U.S. Non-Farm Employment Change (also known as the Non-Farm Payrolls). This indicator shows how many new jobs were created during the past month and it is widely considered the best gauge of jobs market health in the United States. Today’s forecast is 206K new jobs, lower than the previous 242K but a higher number usually brings strength to the US Dollar.

GBP/USD

Yesterday the pair re-tested the level at 1.4350 and turned the zone into support but afterwards, movement was mixed. The speech of the BoE Governor did not trigger substantial moves.


Technical Outlook

After the rejection seen at 1.4450 resistance, the bulls failed to take back control of the pair and now momentum seems to slow down. Both the Stochastic and Relative Strength Index are moving down, coming out of overbought and this increases the chances of a stronger move south but most of today’s directional movement will be determined by the economic data.

Fundamental Outlook

The Pound will be affected today by the release of the British Manufacturing PMI, which is a survey derived from the opinions of about 600 purchasing managers from the manufacturing sector. It acts as a leading indicator of economic health and higher numbers than the anticipated 51.4 usually strengthen the Pound. The time of the release is 8:30 am GMT and later in the day the pair will be directly affected by the NFP release so caution is recommended.

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

447

FOREX NEWS: ENCOURAGING NFP REPORT FAVOURS A US DOLLAR COMEBACK

EUR/USD

Forex News: Friday’s main event was undoubtedly the release of the U.S. Non-Farm Payrolls which showed that 215K new jobs were created in March, more than the anticipated 206K. However, the Euro was resilient and erased most of the initial losses.


Technical Outlook

Price action was mixed Friday but we expect the US Dollar to strengthen today and the pair to move down, below 1.1375. Both oscillators are coming down from overbought and the fundamental side favours the greenback, so the chances of a bearish move are high; the first lower barrier is represented by the support at 1.1320, while the first upper barrier is represented by the key resistance at 1.1450.

Fundamental Outlook

At 2:00 pm GMT the U.S. Factory Orders come out, showing changes in the value of total purchase orders placed with factories. It’s a leading indicator of production and higher numbers strengthen the greenback but the impact is often mild. The forecast is a -1.5% change compared to the previous 1.6%.

GBP/USD

The NFP report released Friday created a huge drop which took the pair below support and also showed that the bears still have a lot of underlying strength.


Technical Outlook

Price is now trading below the 50 period Exponential Moving Average and below 1.4230; if the bears can keep the pair below these levels, the downside movement will probably continue until 1.4050 is reached. We don’t expect this to happen today but it should be a viable destination for the near future. It’s possible to see slow movement today, with the bias determined by the British economic data.

Fundamental Outlook

The only British indicator scheduled for today is the Construction PMI which is expected to show a 54.3 value, almost unchanged from the previous 54.2. This survey of purchasing managers acts as a leading indicator of economic health, with higher numbers being beneficial for the Pound as they show optimism regarding the future development of the Construction sector. The time of the release is 8:30 am GMT.

448

FOREX NEWS: INDECISION STILL RULES THE SCENE AHEAD OF PURCHASING MANAGERS’ INDEX RELEASES

EUR/USD

Forex News: Yesterday movement was slow and without clear direction; a lot of this was due to a monotonous fundamental environment and the lack of major news releases.


Technical Outlook

The pair is still hovering near 1.1375 and neither bulls nor bears are in clear control. We still anticipate a drop below 1.1375 and closer to 1.1320, mostly because both oscillators are moving out of overbought. However, given the current lack of direction, a move up is not out of the question; if this happens, the first target is the key resistance at 1.1450.

Fundamental Outlook

The US Dollar will be affected today by the release of the Non-Manufacturing PMI, which is a survey of about 400 purchasing managers that asks respondents to rate the current level of economic conditions, excluding the manufacturing sector. It acts as a leading indicator of economic health and higher numbers than the forecast 54.1 are usually beneficial for the US Dollar. The scheduled time of the release is 2:00 pm GMT.

GBP/USD

The British Construction PMI showed a value that matched analysts’ expectations and the release didn’t have a strong impact. Nonetheless, the pair moved higher during yesterday’s trading session.


Technical Outlook

The bullish move seen yesterday showed that the break of 1.4230 was false and that we may see a touch of 1.4350 if the 50 period Exponential Moving Average can be broken. Signs of rejection are already seen (long upper wick) but the oscillators are starting to move upwards, favouring the bulls, so the picture is still blurry and on top of that, the pair is still confined in a daily triangle pattern so movement will be mixed until the pattern is broken.

Fundamental Outlook

The British Services PMI comes out at 8:30 am GMT, showing the opinion of purchasing managers about the health of the Services sector. This indicator is not known to be a strong market mover but usually, higher numbers than the forecast 53.9 are beneficial to the Pound.

449

FOREX NEWS: SUPPORT THREATENED, FOMC MEETING MINUTES IN THE SPOTLIGHT

EUR/USD

Forex News: Yesterday’s trading session lacked substantial movement but was dominated by the bears. The US Non-Manufacturing PMI showed a better than expected value, strengthening the greenback and contributing to the bearish movement.


Technical Outlook

The pair is now headed towards the 50 period Exponential Moving Average and the support at 1.1320. This is a good place for the bulls to step back in and retake control over the pair, considering that overall we are in a medium term uptrend. A break of the mentioned support zone would show that the uptrend is exhausted and that the sellers are ready to take price closer to 1.1210 in the near future.

Fundamental Outlook

The only notable event today is the release of the FOMC Meeting Minutes, a document which contains details of the latest FOMC meeting and insights into the reasons that determined the Fed to maintain the rate unchanged. The event is scheduled at 6:00 pm GMT and usually creates strong movement if it contains hints about the pace of future rate hikes.

GBP/USD

The Pound continued on a downward path and the pair moved below support on the back of US Dollar strength generated in part by the positive U.S. economic data.


Technical Outlook

The pair is now sitting below 1.4230 and below the 50 period Exponential Moving Average; this makes the short term bias bearish and increases the chances of a continued move south, closer to 1.4050. However, we are still in a ranging period and the pair is not clearly out of the daily triangle pattern mentioned yesterday. This means that an oversold condition of the Stochastic or RSI has increased chances to trigger a move higher; this potential climb is likely to find resistance at 1.4230.

Fundamental Outlook

The fundamental scene for the Pound is calm as the United Kingdom didn’t schedule major economic news releases today, thus direction will be influenced by the technical aspect and by the FOMC Minutes.

450

FOREX NEWS: FED UNDECIDED ABOUT NEXT RATE HIKE – US DOLLAR SHOWS WEAKNESS

EUR/USD

Forex News: Ahead of the FOMC Meeting Minutes the pair touched the 50 period Exponential Moving Average and bounced higher once it did. The Minutes showed mixed opinions among FOMC members about an April rate hike and this was perceived as bearish for the US Dollar, allowing the pair to climb.


Technical Outlook

The pair shows rejection at the 50 period Exponential Moving Average and at 1.1320 support; on top of that, the current trend is up so we are likely to see a touch of 1.1450 key resistance. If this handle cannot be broken, price is likely to re-test the moving average in the near future and if the bears manage to break it, we will probably witness the end of the uptrend and the beginning of a new downtrend.

Fundamental Outlook

At 11:30 am GMT the ECB will release the Monetary Policy Meeting Accounts, a detailed document of their latest rate meeting, containing insights into the reasons that influenced their latest rate decision. Similar to the FOMC Meeting Minutes, this document can create volatility at the time of release so caution is recommended.

Later in the day, at 9:30 pm GMT Fed Chairwoman Janet Yellen will deliver a public speech at the International House in New York. This is another reason for increased volatility and the direction will depend on Yellen’s attitude and matters discussed.

GBP/USD

The pair breached the key level at 1.4050 yesterday but soon returned above it, showing that this support is still an important hurdle for the bears.


Technical Outlook

The current bounce is likely to bring the pair into the 50 period Exponential Moving Average but here we expect a drop and another try to break 1.4050 support. Both the Stochastic and Relative Strength Index are bouncing off of their respective oversold levels and this fact increases the chances to see bullish price action today.

Fundamental Outlook

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

451

FOREX NEWS: US DOLLAR STAGES A COMEBACK, THREATENS SUPPORT AGAIN


EUR/USD

Forex News: Yesterday the anticipated touch of resistance occurred but the bulls ran out of steam and the pair fell to touch the 50 period Exponential Moving average on a four hour chart.


Technical Outlook

We saw an almost perfect bounce lower at 1.1450 resistance but now the pair is also showing rejection off of the 50 period Exponential Moving Average so the picture remains unclear until price moves outside one of these technical levels. A bearish break of the 50 period EMA would need to extend below the support at 1.1320 and if this happens, we expect 1.1210 to become the next target.

Fundamental Outlook

Today price direction will be driven by the technical aspect as both Europe and the United States didn’t schedule major news announcements.

GBP/USD

Price touched key support once again yesterday and now the pair is in indecision mode, lacking clear direction.



Technical Outlook

The key support at 1.4050 is proving tough to break and for the second time the pair is showing rejection in this area. The latest momentum is bearish but overall the pair is still in a ranging period, without a clear trend, so it’s very possible to see a move north. If the support at 1.1450 is broken, the immediate destination will become the previous low located at 1.4000.

Fundamental Outlook

The British Manufacturing Production is scheduled for release today at 8:30 am GMT and is expected to show a value of -0.2% compared to the previous 0.7%. The indicator tracks changes in the total value of output generated by the manufacturing sector and usually has a medium impact on the Pound, with higher numbers being beneficial. Later in the day, at 2:00 pm GMT, NIESR will release their Estimate version of the British Gross Domestic Product. Although this is just an estimate, higher numbers than the previous 0.3% are usually good for the currency.

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

452

FOREX NEWS: HEADS UP: EXPEDITED PROCEDURES CLOSED MEETING

EUR/USD

Forex News: Friday the pair showed a slight bullish bias, bouncing higher at the 50 period Exponential Moving Average but overall movement was slow, similar to the rest of last week.


Technical Outlook

Several times in the last period, price has bounced at the 50 period Exponential Moving Average but the bulls failed to capitalize and take price above the key resistance at 1.1450. This is an indication that the uptrend is starting to crumble, but on the other hand the bears cannot make serious advances either so we are dealing with a channel breakout scenario. The upper boundary is 1.1450 and the lower boundary is 1.1335; a break of either one will probably determine the next short-to-medium term direction.

Fundamental Outlook

The Fed is due to hold an “expedited procedures” Meeting today. This meeting is closed to the press but afterwards an official statement will be released. The exact time is not yet known but the main topic of discussion is the interest rate so we expect very strong impact that will probably extend throughout the week. Extreme caution is recommended.

GBP/USD

The British Manufacturing Production numbers released Friday showed a disappointing value but the Pound’s answer was mixed, weakening at first and then making up for the losses.


Technical Outlook

The support at 1.4050 is still the most important level for short term price action. Last week the pair bounced off of it again and this up move is likely to continue until the 50 period Exponential Moving Average is reached. On the other hand, if a break of 1.4050 happens today, we will probably see a move into the previous low at 1.4005. Given the unexpected Fed Meeting, we expect strong and possibly irregular moves on all US Dollar pairs.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases but the Fed Meeting will directly influence the pair, thus caution is advised.

453

FOREX NEWS: EURO STILL STUCK IN A RANGE, POUND PREPARES FOR INFLATION DATA

EUR/USD

Forex News: For most of yesterday the euro-dollar remained confined inside the range represented by 1.1450 resistance and 1.1335 support. Overall the session was slower than expected.


Technical Outlook

The buyers are putting some pressure on the pair and threaten 1.1450 but so far this key resistance remains intact. At the time of writing the Fed closed meeting did not take place yet and an exact time is not yet known. As stated before, the impact of this meeting can be strong, depending on the matters discussed. In the meantime, we are still dealing with a breakout scenario and our bias is neutral, waiting for a move above 1.1450 or below the 50 period Exponential Moving Average and 1.1335.

Fundamental Outlook

Today is a slow day for both the Euro and the US Dollar from a fundamental standpoint and price direction will be mainly influenced by the technical aspect.

GBP/USD

The Pound continued to climb yesterday, moving above the 50 period Exponential Moving Average and above the 1.4230 barrier.


Technical Outlook

The oscillators are coming closer to overbought and this favors a move down. As we said previously, the pair is going through a ranging period and in this kind of period, any extreme position of the oscillators (overbought or oversold) can more easily generate a counter move. We expect a move lower, that will possibly turn 1.4230 into support before heading higher; if the mentioned level is broken to the downside, the first target becomes the 50 EMA.

Fundamental Outlook

At 8:30 am GMT the British Consumer Price Index is announced, and anticipated to show a change of 0.3%, same as previous. This is the main gauge of inflation, which is currently considered too low, so higher values than forecast will likely generate Pound strength.

454

FOREX NEWS: U.S. RETAIL SALES – THE DAY’S MAIN MARKET MOVER

EUR/USD

Forex News: Yesterday the pair tried once again to break the key resistance at 1.1450 but failed once more and a sharp drop followed, taking the pair below the 50 period Exponential Moving Average.


Technical Outlook

It appears like the pair is finally preparing for a real breakout and the bounce at 1.1450 showed that the bulls are clearly out of steam. The 50 period Exponential Moving Average was the first hurdle in front of falling prices and it was broken during yesterday’s fall; all this make our bias bearish, anticipating a move below 1.1335. Once this level is broken, it is likely to see a re-test from below, which will confirm the level as new resistance.

Fundamental Outlook

The US Dollar remains in the spotlight today for the release of the U.S. Retail Sales numbers scheduled at 12:30 pm GMT and expected to show a 0.1% increase compared to the previous -0.1%. Sales made at retail levels represent a key element of the economy and usually higher numbers strengthen the currency so we expect to see more downside movement if the actual number is higher than anticipated.

GBP/USD

British inflation improved as shown by yesterday’s CPI release that posted a 0.5% change (forecast 0.3%). This initially strengthened the Pound but soon after, US Dollar bulls stepped in and the pair bounced lower at resistance.



Technical Outlook

The pair bounced almost perfectly at 1.4350 resistance and moved below 1.4230 but now the bears have an important barrier ahead: the 50 period Exponential Moving Average. If this hurdle can be overcome, the next likely destination is 1.4050 although we don’t expect that to happen during the course of a single day. The overbought condition of both the Stochastic and Relative Strength Index played an important role in yesterday’s drop and now the greenback is gaining momentum, so we expect further downside to follow.

Fundamental Outlook

The Pound won’t be affected by major news announcements so the main mover for the pair will be the release of the U.S. Retail Sales and of course, the technical aspect.

455

FOREX NEWS: A NEW US DOLLAR TREND? AMERICAN INFLATION DATA COULD BE THE DECIDING FACTOR

EUR/USD

Forex News: Yesterday the pair continued to move to the downside despite the fact that U.S. Retail Sales posted a disappointing change of -0.3%. This goes to show that the US Dollar is strengthening and the Euro bulls are slowly giving up their control.


Technical Outlook

Price has moved below the 50 period Exponential Moving Average and below the previous support at 1.1335. This is a clear indication that further downside is probable but we have to note that the Relative Strength Index and Stochastic are approaching oversold. This means that the chances of bullish retracements have increased and that today we may see a re-test from below of 1.1335. If this level can turn into resistance, we expect the pair to head towards 1.1200 area.

Fundamental Outlook

Today at 12:30 pm GMT important inflation data is released by the United States: the Consumer Price Index. The expected change is 0.2%, better than the previous -0.2% and any values above or even equal to the forecast usually strengthen the US Dollar, generating movement south.


GBP/USD

Yesterday the bearish advances slowed down, probably influenced by the worse than expected U.S. Retail Sales. At the time of writing the pair is still struggling to break the moving average.


Technical Outlook

Although the oscillators still show good momentum, the pair is having difficulties breaking the 50 period Exponential Moving Average and price is sitting just below 1.4230. Once and if these barriers are broken, we expect the bears to take price closer to 1.4050 which is the next key level. A bounce higher is less likely but not out of the question because the pair is still in a ranging state judging from a medium term perspective.

Fundamental Outlook

The Bank of England announces the interest rate decision today at 11:00 am GMT. No change is expected (currently 0.50%) but a breakdown of the MPC members’ votes is also revealed, showing the stance of each member. Previously all 9 members voted to keep rates unchanged but a sudden change of stance could trigger strong moves on Pound pairs so we recommend caution at the time of release. Keep in mind that the U.S. CPI will have a direct impact on the pair as well.

456

FOREX NEWS: BEARS PUSH LOWER, SUPPORT STILL INTACT

EUR/USD

Forex News: Yesterday the pair continued its descent although the U.S. CPI showed a value below analysts’ expectations; however, it was still better than the previous number and this was viewed as bullish for the US Dollar.


Technical Outlook

Price is getting closer to the support around 1.1210 and now we see some bullish impulses, probably generated by the oversold condition of the two oscillators. For now the pair did not make a significant lower high or lower low so we cannot consider the latest move to be a clear downtrend and thus, expect a move into 1.1335 or the 50 period Exponential Moving Average. If one of the two will turn into resistance, the chances of further downside movement will increase, making 1.1210 the first target.

Fundamental Outlook

At 2:00 pm GMT the University of Michigan will release a Consumer Sentiment survey derived from the opinions of about 500 consumers. The expected figure is 91.9 (previous 91.0) and higher values usually strengthen the greenback but the impact is often mild if the actual number matches analysts’ expectations. Also today the G2 (Group of 20) Meetings take place, attended by key personalities from the member states. The event might influence volatility, so we recommend caution.

GBP/USD

The Bank of England kept rates unchanged and all MPC members agreed on this. As a result, the release did not create significant moves for the Pound; however, the pair broke the 50 period Exponential Moving Average yesterday.


Technical Outlook

The important support represented by the 50 period EMA was broken and although the bears are taking a breather now, we expect the downside to continue until the key support at 1.4050 is reached. We must note that the Stochastic is now oversold but the Relative Strength Index has not reached an extreme yet so the picture offered by the oscillators is pretty blurry at the time. In any case, keep in mind that the Stochastic favours a move up; if this is the case, we expect price to be rejected lower by 1.4230 or by the 50 EMA.

Fundamental Outlook

The Pound will be mainly affected by the technical aspect because no major British indicators are released. The G20 Meetings and the U.S. Consumer Sentiment survey will have a direct impact on the pair.

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

457

FOREX NEWS: SLOW MONDAY; RESISTANCE HINDERS UPSIDE ACTION

EUR/USD

Forex News: Friday we had a slow day, with some bullish movement, generated in part by a disappointing value of the University of Michigan Consumer Sentiment survey, which weakened the US Dollar.


Technical Outlook

We expect the pair to move higher until it touches the 50 period Exponential Moving Average and probably the level at 1.1335. This level is not yet confirmed resistance but it will become one if price bounces off of it. The oscillators moved out of oversold, thus increasing the chances of a bullish move into the mentioned zone but a bounce here would increase the probability of a break of 1.1250 en route to 1.1210.

Fundamental Outlook

Today at 12:30 pm GMT, William Dudley, the President of the New York Federal Reserve Bank will deliver opening remarks at a Conference in New York. He is a FOMC voting member, so his attitude is likely to influence the US Dollar but we don’t expect huge movement unless he surprises the markets and audiences with strong statements.

GBP/USD

A weaker US Dollar allowed the Pound bulls to take price higher Friday and to break the 50 period Exponential Moving Average. However, horizontal resistance is still intact so the next move is still undecided.


Technical Outlook

The bulls are struggling to break 1.4230 resistance but signs of rejection are already present. If the pair moves below the 50 period Exponential Moving Average, this will confirm the bounce at 1.4230 and will probably generate a move south. On the other hand, if price stays above the 50 EMA, we expect a break of immediate resistance and that will probably bring in more buyers who will take the pair higher.

Fundamental Outlook

The Pound will be influenced only by the technical aspect today as the United Kingdom didn’t schedule major economic indicator releases.

458

FOREX NEWS: THE BULLS ARE STILL IN THE GAME, SHOWING UNDERLYING STRENGTH

EUR/USD

Forex News: Yesterday was a slow day for the euro-dollar but the bulls dictated the pace and direction of the action. Resistance is still intact and as long as this is the case, we still favour a move south.


Technical Outlook

As long as price stays below 1.1335, we anticipate the pair to move lower, towards 1.1250. The Stochastic is approaching overbought, favouring a bounce at resistance and the 50 period Exponential Moving Average is still not broken so it is currently acting as resistance as well. All this will make it tough for the bulls to move the pair higher but a break of the mentioned resistance zone will open the door for 1.1450 once more.

Fundamental Outlook

The German ZEW Economic Sentiment survey is today’s main reason for Euro volatility. The survey is derived from the opinions of 275 German analysts and professional investors regarding a 6 month economic outlook. The release is scheduled at 9:00 am GMT and the expected value is 8.2, almost double than the previous 4.3; higher values usually strengthen the Euro.

Later in the day, at 12:30 pm GMT the U.S. Building Permits are released, offering insights into the American Construction sector; the anticipated value is 1.20M and higher values benefit the US Dollar.

GBP/USD

The Pound had a great day against the greenback and managed to climb above 1.4230. This scores an important victory for the bulls and makes the short term bias bullish.


Technical Outlook

As long as the pair is trading above the 50 period Exponential Moving Average and above 1.4230, we favour the upside but a bearish trend line sits in front of rising prices. If this barrier can be surpassed, we anticipate the bulls to take the pair into 1.4350 but overall the pair is in a ranging phase so the control does not clearly belong to either side; this also means that an extreme reading (overbought) of any of the 2 oscillators would increase the possibility of a move south.

Fundamental Outlook

Bank of England Governor Mark Carney will testify today at 2:35 pm GMT before the Lords Economic Affairs Committee. A hawkish stance will likely bring Pound strength while the opposite is true for a dovish approach. Either way, volatility is expected and caution is recommended.

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FOREX NEWS: A BULLISH RESURGENCE OR THE LAST IMPULSE BEFORE A HUGE DROP?

EUR/USD

Forex News: The German ZEW Economic Sentiment survey released yesterday showed a better than expected reading while the U.S. Building Permits didn’t meet analysts’ forecast and all this played a role in the climb above resistance seen yesterday.


Technical Outlook

The current climb above resistance is approaching an overbought condition as shown by the Stochastic and Relative Strength Index. This suggests that a move lower is in order, even if afterwards the pair will resume upside movement. The day’s most important level remains 1.1335, which may trigger a bounce higher if price returns to re-test it; the 50 period Exponential Moving Average is also a barrier in front of falling prices and as long as the pair sits above it, our bias is slightly bullish.

Fundamental Outlook

Today at 10:00 am GMT, ECB President Mario Draghi will speak at the ECB Generation Euro Competition. We don’t expect strong movement but it’s an event that you should be aware of, because volatility may increase during his speech. On the US Dollar side we have the U.S. Existing Home Sales released at 2:00 pm GMT and expected to show a value of 5.29M (previous 5.08M); the indicator is not a major market mover but usually, higher values strengthen the US Dollar.

GBP/USD

The Pound continued its climb and is now trading well above the bearish trend line mentioned yesterday. Horizontal resistance was also broken and it looks like we are seeing a resurgence of the bulls who seem determined to regain control.


Technical Outlook

The Stochastic and Relative Strength Index have moved above their respective overbought levels, warning about a potential retracement lower. If this retracement occurs, the first potential support will be offered by the level at 1.4350 and to the upside, the first notable resistance is located at 1.4460, followed by the zone around 1.4500.

Fundamental Outlook

UK labour market data comes out at 8:30 am GMT in the form of the Claimant Count Change, an indicator that shows changes in the number of people who asked for unemployment related help during the previous month. The expected number is -11.9K and lower numbers are usually beneficial for the Pound.

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FOREX NEWS: DRAGHI TAKES THE STAGE FOR THE INTEREST RATE PRESS CONFERENCE

EUR/USD

Forex News: Yesterday the bullish advances stopped and instead the bears managed to push the pair lower, into support; the U.S. Existing Home Sales showed an optimistic value and this added strength to the greenback.


Technical Outlook

The pair is re-testing the level at 1.1335, which may turn into support and if this occurs, we are likely to see moves higher, towards 1.1450. The 50 period Exponential Moving Average is also in close vicinity, creating a confluence zone together with the mentioned support level. If this strong zone is broken, it will show that the US Dollar is gaining momentum and we expect a move towards 1.1200 zone; the position of the two oscillators favours a move south but today the technical aspect will be overshadowed by the ECB events.

Fundamental Outlook

The European Central Bank announces at 11:45 am GMT the decision regarding the interest rate and 45 minutes later, at 12:30 pm GMT, Mario Draghi, the President of the ECB, will hold a press conference discussing the interest rate decision. This is usually the most volatile time of the day and also a reason for sometimes erratic movement. Since the rate is not expected to change, the Euro direction will be mostly dependant on the attitude of the ECB President and the way he answers journalists’ questions.

GBP/USD

The British Claimant Count Change released yesterday showed a disappointing value of 6.7K (forecast -11.9K) but the release weakened the Pound only for a short while and created a bounce higher at support.



Technical Outlook

The almost perfect bounce at 1.4350 turned the level into support and also showed that the pair is headed higher. This potential bullish move can be blocked by the overbought condition of the Stochastic and Relative Strength Index but also by the minor resistance at 1.4420. If these barriers can be overcome, price is likely to touch 1.4450 where we expect a deeper retracement to the downside.

Fundamental Outlook

Bank of England Governor Mark Carney will deliver a speech today at 2:00 pm GMT at the United Nations, in New York. We expect the Pound to react but unless the Governor makes strong statements, we don’t anticipate huge movement.

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FOREX NEWS: BEARS PUSH THE PACE AS THE US DOLLAR BOUNCES BACK

EUR/USD

Forex News: The Euro acted erratically yesterday during Mario Draghi’s press conference, strengthening while he was speaking and suffering a sharp selloff afterwards. Currently the pair is trading again below 1.1335.


Technical Outlook

The large spike created by yesterday’s price action shows rejection and also that once again the balance of power favours the bears. Today we expect the pair to make its way towards 1.1210, with the first barrier being 1.1250. If the direction is going to change again, 1.1335 is the first upside barrier and if that is surpassed, we don’t expect 1.1400 to be broken. The oscillators don’t show an extreme reading, thus they don’t offer clear clues about future movement.

Fundamental Outlook

The German Flash Manufacturing PMI is released today at 7:30 am GMT. The indicator shows the opinions of purchasing managers from the German Manufacturing sector about business and economic conditions in said sector and usually higher numbers have a positive impact on the Euro but often the extent is limited. The forecast is 51.0, previous 50.7. Also today the Eurogroup and ECOFIN Meetings start, attended by finance ministers and key personalities from the EU member states.

GBP/USD

Mark Carney’s speech didn’t create a huge buzz but the US Dollar strengthened and drove the pair below 1.4350 yesterday, after a short-lived climb above resistance. Overall price action was choppy and difficult to trade.


Technical Outlook

The pair has shown clear rejection around 1.4420 resistance and now 1.4350 is breached to the downside. Also, the oscillators show good bearish momentum and we expect all this to generate a stronger move south, probably very close to the 50 period Exponential Moving Average. A quick move above 1.4350 would indicate a period of stagnation and most likely sideways movement, trapped between 1.4420 and 1.4350.

Fundamental Outlook

The Pound will not be affected by major economic announcements but the Eurogroup and ECOFIN Meetings will probably create volatility, depending on the matters discussed.

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