FOREX NEWS: GERMAN BUSINESS CLIMATE, U.S. HOME SALES TO DECIDE TODAY’S PRICE DIRECTION
EUR/USD
Forex News: Friday the bearish movement continued as the greenback strengthened against the Euro and managed to drive the pair below 1.1250. This marks an important victory for the bears and makes us anticipate a short term downtrend.
Technical Outlook
By breaking 1.1250 to the downside, price now created a lower low; also we have a lower high (price bounced at 1.1400 while previously it had bounced at 1.1450) and this is a characteristic of a downtrend. We expect price to move below 1.1210, en route to 1.1150 support but we note the oversold position of the Stochastic (also the Relative Strength Index is just touching its oversold level) and this means that today we may see bullish pullbacks. If this is the case, we expect bearish movement to resume at 1.1250 or at the 50 period EMA.
Fundamental Outlook
Early at 8:00 am GMT the German IFO Business Climate survey comes out, expected to show a value of 107.1 (previous 106.7). Its importance comes from its large sample of about 7,000 businesses that are asked to give their assessment on current economic conditions as well as a 6 month outlook. Higher numbers usually strengthen the Euro but the extent is sometimes limited.
Later in the day, at 2:00 pm GMT the U.S. New Home Sales numbers come out, offering insights into the health of the U.S. house market. The forecast is 521K (annualized number) and a higher value is beneficial for the US Dollar but the indicator is known to have medium impact on the greenback.
GBP/USD
Friday the Pound spiked higher but the bulls couldn’t sustain the move and the pair is trading again below minor resistance. Overall both sides lack determination and a clear trend is not in place.
Technical Outlook
The resistance at 1.4420, although breached several times, is still rejecting price lower, creating long candle wicks. This is a sign of future moves lower but, as mentioned before, neither side is in control. The oscillators don’t show an extreme condition, thus don’t do much for predicting the future move. From a short term perspective, the pair is making higher highs and higher lows (uptrend) so we expect a touch of 1.4460 if the bulls can take price back above 1.4420.
Fundamental Outlook
The Pound’s direction will me mostly affected by the technical aspect because the United Kingdom didn’t schedule major economic news releases for today.