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502

FOREX NEWS: CURRENCIES ON SHAKY GROUND AS WE ENTER BREXIT WEEK

EUR/USD

Forex News: Friday the pair continued the bullish impulse started a day before and tested the resistance at 1.1300. The week ended close to its opening price and the most important happening was the huge whipsaw that totally reversed direction.


Technical Outlook

After piercing 1.1150, price bounced and moved strongly to the upside and stopped in close vicinity of 1.1300 resistance. This irregular movement leaves little room for an accurate technical prediction so our stance is neutral until we see a clear break of either 1.1300 or 1.1240. A true break should be followed by a re-test of the level and if this happens, price is likely to continue in the direction of the break.

Fundamental Outlook

Today no major announcements are scheduled by either Europe or the United States so we expect a slow Monday, with price action influenced by the technical aspect.


GBP/USD

The Pound edged above resistance Friday, without any apparent reason, thus finishing the week higher. This pair continues to be high-risk and as we saw last week, all moves can be quickly reversed.


Technical Outlook

The pair sits above the 50 period Exponential Moving Average so the short term control belongs to the bulls but this doesn’t necessarily mean that today we will see further advances north. The resistance at 1.4350 was broken Friday so if price doesn’t move below it today, we expect a touch of 1.4400. The Stochastic is overbought and the Relative Strength Index is approaching its 70 level, so a touch of 1.4400 may be followed by a bounce lower.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will be mainly influenced by the technical side because the United Kingdom didn’t schedule major economic releases for today.

503

FOREX NEWS: DRAGHI AND YELLEN TAKE CENTRE STAGE, TESTIFYING ON MONETARY POLICY

EUR/USD

Forex News: The market opened with a weekly gap generated mostly by Brexit turmoil over the weekend. Throughout the day the bullish action continued until price came in close vicinity of resistance.


Technical Outlook

After the near touch of 1.1385 resistance, the pair bounced lower and is currently testing 1.1335. If the bears can take price below this level, we expect it to also move below 1.1300 to close the gap. Usually gaps are closed (price retraces to where the gap originated) but the time needed for such a move to complete is not known. The oscillators are overbought, favouring a move into the 50 period Exponential Moving Average.

Fundamental Outlook

At 9:00 am GMT the German ZEW Economic Sentiment Survey comes out, expected to show a figure of 5.1, lower than the previous 6.4. This is a survey of 275 German professional investors and analysts that tries to gauge their outlook regarding economic conditions during the next 6 months; usually a higher number is beneficial for the Euro.

ECB President Mario Draghi will testify today at 1:00 pm GMT before European Parliament’s Economic and Monetary Affairs Committee with the topic being monetary policy. It’s an important event that is likely to trigger some wild swings, depending on the President’s attitude and answers.

Fed Chairwoman Janet Yellen will also testify today at 2:00 pm GMT before the Senate Banking Committee on the Semiannual Monetary Policy Report. This is an important event and can affect the US Dollar, depending on her attitude and answers; caution is recommended because volatility may be irregular during these two events.

GBP/USD

The Pound was affected by more Brexit polls, which this time showed that the balance is slowly tipping in favour of the ‘remain’ side. A big bullish gap was created and the pair continued higher throughout the day.


Technical Outlook

The recent climb took the pair into 1.4650 resistance and now both the Stochastic and Relative Strength Index are overbought. Under normal circumstances this would call for a bearish retracement but considering the current fundamental environment, everything is possible so our outlook is neutral and we recommend extreme caution if trading this pair.

Fundamental Outlook

The United Kingdom didn’t schedule major economic indicators today but any type of Brexit talk is likely to trigger strong moves. Fed Chair Yellen’s speech will also have a direct impact on the pair’s movement.

504

FOREX NEWS: US DOLLAR RECOVERS AHEAD OF YELLEN’S SECOND TESTIMONY

EUR/USD

Forex News: Despite a better than expected value for the German ZEW survey, the Euro depreciated against the US Dollar throughout yesterday. Also ECB President Draghi hinted towards adding further stimulus if needed and this aided the drop.


Technical Outlook

The weekly gap was closed yesterday and the pair slid through 1.1300 and through the 50 period Exponential Moving Average, reaching 1.1240 support. The oscillators still show good downside momentum and are far from oversold so the current impulse is likely to continue below 1.1200 and towards 1.1150. On the other hand, a move above the 50 EMA will open the door for a bullish push close to 1.1335.

Fundamental Outlook

Fed Chairwoman Janet Yellen will testify again today at 2:00 pm GMT, but this time before the House Financial Services Committee. The topic is the Semiannual Monetary Policy Report and caution is recommended as her testimony is likely to influence the US Dollar although yesterday we didn’t see a huge impact.

GBP/USD

The pair continued its climb and found resistance in the area around 1.4765; price action continues to be influenced by Brexit turmoil and movement is still choppy.


Technical Outlook

The bounce at 1.4765 combined with the overbought condition of the Relative Strength Index and Stochastic may trigger a move below 1.4650 and into 1.4565. As noted throughout the week, the Pound remains heavily influenced by Brexit polls and speculation so the technical aspect is secondary and our bias is neutral. Caution is still recommended.

Fundamental Outlook

The pair’s direction will be affected by the testimony of Fed Chair Yellen as the United Kingdom didn’t schedule major indicator releases for the day.

505

FOREX NEWS: HISTORICAL DAY FOR UNITED KINGDOM AND THE EUROPEAN UNION

EUR/USD

Forex News: The pair erased the losses incurred a day before and reached 1.1335 resistance but soon bounced lower during Fed Chair Yellen’s testimony before the House Financial Services Committee.


Technical Outlook

The long wick seen in the upper part of the candle and the bounce at 1.1335 resistance show that the pair might be headed for 1.1240 in the near future. The first barrier in front of falling price is the 50 period Exponential Moving Average but as mentioned numerous times, today is a key day for the United Kingdom and for the European Union so the technical will be almost completely overshadowed.

Fundamental Outlook

Today’s price action will be heavily influenced by the Brexit referendum and all other releases will be secondary. That being said, it’s still important to mention the U.S. New Home Sales scheduled for release at 2:00 pm GMT and expected to show 561K compared to the previous 619K. The indicator tracks the annualized number of homes sold during the previous month and usually higher figures are beneficial to the US Dollar but the extent is often limited.

GBP/USD

The pair’s jerky movement continued yesterday as price hovered near 1.4650 before shooting up and bouncing back once 1.4765 was touched.


Technical Outlook

Considering the historical event that takes place today, our technical bias is neutral. The referendum will take centre stage and the technical aspect will be secondary.

Fundamental Outlook

Needless to say that the EU membership referendum is the day’s main event and that it will have a huge impact on the markets in general and the Pound in particular. The citizens of the United Kingdom will vote on whether they want UK to remain a part of the European Union or not and the general consensus is that a ‘remain’ result will strengthen the Pound. However, this is not a certainty and extreme caution is advised.

506

FOREX NEWS: THE AFTERMATH

EUR/USD

Forex News: Although at the time of writing an official result to the British referendum was not made public, the Euro and Pound climbed to new highs during the day. Volatility was high and movement irregular, as expected.


Technical Outlook

Today’s price direction will still be influenced by the effects of the referendum, so we still expect high volatility. The levels to watch are 1.1450 as resistance and 1.1335 as support but our bias remains neutral considering the shaky fundamental scene.

Fundamental Outlook

The German IFO Business Climate is released at 8:00 am GMT, showing the opinions of about 7,000 businesses about current and future economic conditions. Under normal circumstances, higher values for this survey strengthen the Euro but today’s impact is harder to anticipate than usual; the forecast is 107.6, almost identical to the previous 107.7.

On the US Dollar side we have the release of the CORE Durable Goods Orders, scheduled at 12:30 pm GMT. This version of the indicator tracks changes in the value of orders for goods with a life expectancy of at least 3 years but excludes from calculation transportation items. The expected change is 0.1% and higher percentages usually strengthen the US Dollar.

GBP/USD

The pair climbed in the first part of yesterday but most of the gains were negated in the afternoon. Price action was unpredictable, with massive swings.


Technical Outlook

After reaching a high at 1.4946 the pair retraced to 1.4765, with the Relative Strength Index showing overbought. However the next move remains uncertain, especially because an official result of the referendum is not yet known at the time of writing. Our position remains neutral and we recommend further caution.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases but the Pound will be affected by the aftermath of the referendum.

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

507

FOREX NEWS: MARKETS STILL WEIGH THE BREXIT IMPACT

EUR/USD

Forex News: Friday the official results of the Brexit referendum became public but exit polls were already showing that the ‘Leave’ side won. The reverberation in the market was huge, with both the Euro and Pound weakening severely.


Technical Outlook

After reaching the low at 1.0911 the pair retraced higher and is now hovering close to 1.1100. Considering the historical event that occurred last week, the short term direction is difficult to anticipate but there’s an overall wave of pessimism and this will probably lead to more downside movement. We may also see a slowdown compared to Friday’s price action.

Fundamental Outlook

We don’t have anything important on today’s economic calendar but price action will still be heavily influenced by Britain’s separation from the European Union and volatility will be irregular.


GBP/USD

The United Kingdom decided it will no longer be a part of the European Union. This will hold the headlines for quite a while and we will surely see massive swings in the near future. Friday the pair dropped more than 1,700 pips on the back of Pound weakness.


Technical Outlook

The pair retraced after reaching a low at 1.3227, which is a normal thing after such a huge move but considering the overall geopolitical environment, we expect the downside movement to resume. Volatility is still sky-high so stop losses and position sizes should be adjusted accordingly but this pair remains high risk and extreme caution should be used.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases today so price action will be driven by the technical aspect and the aftermath of the Brexit.

508

FOREX NEWS: US DOLLAR CONTINUES THE ASSAULT ON A WEAKENED POUND

EUR/USD

Forex News: The week opened lower, with a gap that was already closed during yesterday’s trading session and afterwards the pair continued south, without breaking support.


Technical Outlook

Although we saw some bullish action yesterday, overall strength belongs to the bears and the US Dollar is winning the battle. For today we expect a continuation of the down movement, probably through 1.0960 and towards the low at 1.0911 that will probably be broken in the near future. The oscillators are close to oversold but given the whole Brexit turmoil, their importance has diminished.

Fundamental Outlook

Today at 8:00 am GMT ECB President Mario Draghi will deliver opening remarks at the European Central Bank Forum, in Sintra. If he touches on the UK situation, we will likely see some effect on the market and as always, caution is advised.

The U.S. Final version of the Gross Domestic Product is released today at 12:30 pm GMT, expected to show 1.0% change compared to the previous 0.8%. Higher values are beneficial for the greenback but the Final version is the least important so we don’t expect huge movement. Later in the day, at 2:00 pm GMT an American Consumer Confidence survey is released, acting as a leading indicator of consumer spending. The forecast is 93.2, little changed from the previous 92.6 but higher values usually bring US Dollar strength.

GBP/USD

Yesterday belonged to the bears as well, and the entire day price moved lower after a big weekly gap that we don’t expect to be closed soon.


Technical Outlook

Last week’s low at 1.3227 was broken yesterday and at the time of writing the pair made a new low at 1.3119. We anticipate a move lower, probably into 1.3000 area in the near term but this doesn’t mean that retracements will not occur in the meantime. The Stochastic and Relative Strength Index are both severely oversold but as stated before, this has less importance given the current situation. Volatility is still high and irregular movement still possible.

Fundamental Outlook

The United Kingdom didn’t schedule major indicator releases but an EU Summit starts today, with the UK exit as the main topic, so we expect strong movement.

509

FOREX NEWS: EU SUMMIT: EUROPEAN LEADERS DIGEST THE UK SITUATION


EUR/USD

Forex News: European leaders have met yesterday in Brussels to discuss the Brexit and the potential damage it will do to the European Union; the market recuperated some of the losses but nothing substantial. The Summit will continue today.



Technical Outlook

Uncertainty still rules the market because now there are talks about a second UK referendum and possibly a delayed separation from the EU. Yesterday the pair climbed and breached the resistance at 1.1100 but now we see clear signs of rejection and we expect downside movement to resume; if this is the case, the first notable target is 1.0960 but a move above 1.1100 will most likely take price into 1.1150.

Fundamental Outlook

Today at 12:00 pm GMT the German Preliminary version of the Consumer Price Index is released and expected to show a change of 0.1% compared to the previous 0.3%. Usually this is an important release but today the EU Summit will continue in Brussels and EU leaders will discuss United Kingdom’s separation from the European Union so we expect this to be the highlight of the day and to influence the pair more than the indicator mentioned earlier.

GBP/USD

The pair retraced higher yesterday and volatility remained high but movement slowed down compared to the previous days.


Technical Outlook

The current climb may extend into the next resistance located at 1.3483 but once and if price gets there, we expect it to start moving on a bearish path again. The first target is 1.3227, followed by the historical low at 1.3119. The oscillators are just exiting oversold, favouring a move into 1.3483 but like we’ve mentioned yesterday, the position of the oscillators is not a clear indication of future direction and it doesn’t hinder a drop even before 1.3483 is reached.

Fundamental Outlook

The EU Summit will be today’s main market mover as the United Kingdom didn’t schedule important economic releases.

510

FOREX NEWS: BREXIT FALLOUT BRINGS FED RATE SPECULATION


EUR/USD

Forex News: The US Dollar weakened yesterday and this allowed the pair to move up, breaking 1.1100 resistance. Most of the dollar weakness was generated by speculation that the Fed will not raise rates until 2018 to prevent a deeper impact of the UK exit.


Technical Outlook

The break of 1.1100 opens the door for a move into 1.1150. The 50 period Exponential Moving Average is in close vicinity of the latter level and the two combined will create a confluent zone of resistance that will possibly become a good place for the pair to resume downside movement. Of course the geopolitical aspect still remains the most important and price direction will depend mostly on that rather than technical support and resistance.

Fundamental Outlook

The European Flash Estimate version of the Consumer Price Index is released today at 9:00 am GMT and is expected to show a 0.0% change from the previous -0.1%. The release may be mostly overlooked by market participants, especially if the actual value matches analysts’ prediction but under normal circumstances, higher numbers strengthen the Euro.

GBP/USD

The Pound recuperated some of the losses and moved higher yesterday, mostly on the back of weakness in the US Dollar, generated by speculation about Fed rates.


Technical Outlook

It appears as the weekly gap will be closed soon and the pair may find resistance around 1.3655. If this happens, we expect the bears to regain control of price action and the pair to move below 1.3483; the Stochastic is approaching overbought and this adds to the possibility of movement south. The pair remains high risk.

Fundamental Outlook

The British Final version of the Gross Domestic Product will be released today at 8:30 am GMT. This indicator acts as an overall gauge of economic performance but the Final version is the least important. Nonetheless, higher values than the previous 0.4% can strengthen the Pound but the extent should be limited.

511

FOREX NEWS: RESISTANCE HOLDS, BEARS READY TO TAKE BACK CONTROL

EUR/USD

Forex News: European inflation showed slight improvement yesterday and this initially strengthened the Euro, taking the pair into resistance, where the bullish momentum faded and rejection was seen.


Technical Outlook

The resistance level at 1.1150 combined with the 50 period Exponential Moving Average created a strong confluence zone that rejected price lower yesterday. The Stochastic shows a bearish cross close to its overbought level and this, combined with the rejection seen at 1.1150, sets the stage for a drop towards 1.0960. On the other hand, if a four hour candle closes above 1.1100, we might see another attempt to break 1.1150 and the 50 EMA.

Fundamental Outlook

The day’s only notable economic release is the U.S. Manufacturing PMI, scheduled at 2:00 pm GMT. This is a survey of about 400 purchasing managers regarding business conditions in the manufacturing sector and usually acts as a leading indicator of economic health. Today’s expected value is 51.3, same as previous and higher numbers can bring US Dollar strength.

GBP/USD

Price action slowed down yesterday and the pair started ranging on the lower time frames. After a timid move above 1.3483, price returned below this level.


Technical Outlook

The bullish retracement seems exhausted as shown by the return below 1.3483 and this suggests that the bears may step back in, attempting to move the pair towards 1.3227. The Pound is still weakened by UK’s decision to leave the European Union and this favours moves south, probably towards 1.3000 in the medium term. A clear close above 1.3483 would make 1.3655 the next target.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing Purchasing Managers’ Index is released and the anticipated value is 50.0, almost unchanged from the previous 50.1. Higher numbers are indicative of optimism and may strengthen the Pound to a limited extent.

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

512

FOREX NEWS: PREPARE FOR IRREGULAR VOLATILITY AS THE U.S. CELEBRATE INDEPENDENCE DAY

EUR/USD

Forex News: The U.S. Manufacturing PMI released Friday showed a value of 53.2, better than the forecast 51.3 but despite this, the pair climber for most of the day, breaching resistance.


Technical Outlook

Price moved above the 50 period Exponential Moving Average but a long upper wick appeared on the candle that breached the line. This is a sign of rejection that makes us anticipate a drop through 1.1100 and into the bullish trend line seen on the chart above. If 1.1100 support rejects price, we expect a break of the 50 period EMA and 1.1150 resistance.

Fundamental Outlook

It’s Independence Day so banks across the United States will be closed and volatility will be affected, especially in the New York session. On the Euro side things are slow as well so we may have an overall ranging day.

GBP/USD

The pair moved back into support but momentum faded and it looks like now both bulls and bears are undecided about the next direction. The economic indicators released Friday went mostly unnoticed.


Technical Outlook

The sideways movement seen Friday is likely to continue today so we expect the pair to remain between 1.3227 and 1.3483. On the other hand, a bearish break of 1.3227 support will probably extend into the low at 1.3119. Price direction will also be influenced by the economic data released but the New York session will probably lack major developments due to Independence Day.

Fundamental Outlook

At 8:30 am GMT the British Construction PMI is released, showing the state of the construction sector as perceived by about 170 purchasing managers. The anticipated value is 50.6, slightly lower than the previous 51.2; higher numbers show optimism and usually send the Pound higher.

513

FOREX NEWS: ALL EYES ON POUND AS BOE RELEASES FINANCIAL STABILITY REPORT

EUR/USD

Forex News: As expected price action yesterday was slow and this was mostly due to the fact that U.S banks were closed, celebrating Independence Day and on the Euro side no major indicators were released either.


Technical Outlook

The only notable move seen yesterday was a bounce at the bullish trend line. However, at the time of writing, this bounce hasn’t generated a break of resistance and the 50 period Exponential Moving Average is flat, running through price. If bullish momentum picks up and 1.1150 is surpassed, we expect a move into 1.1240 during the days to come but this will depend a lot on the economic releases.

Fundamental Outlook

The U.S. Factory Orders are released today at 2:00 pm GMT. This is an indicator with a mild impact, that measures changes in the value of orders placed with manufacturers. Higher numbers than the forecast -0.7% usually bring US Dollar strength.


GBP/USD

Similar to the other pair, the Pound-Dollar had a slow day, with sideways movement and no major developments.



Technical Outlook

Price remained above 1.3227, moving sideways for the most part of yesterday and this type of behavior usually suggests that a strong move (breakout) is in the making. However, the direction of this potential breakout is hard to anticipate so keep an eye on 1.3227 because a close below it will likely push price into 1.3119. To the upside, 1.3483 remains the first level of interest and although it’s a long travel, price may be able to complete it if volatility is generated by today’s fundamental developments.

Fundamental Outlook

Today at 9:30 am GMT the Bank of England will make public the Financial Stability Report and half an hour later, BOE Governor Mark Carney will hold a press conference discussing the report. This document contains the Bank’s point of view regarding overall stability and risks in the financial sector and may contain hints about the direction of monetary policy. The report combined with Carney’s press conference can generate strong movement and potentially irregular price action.

514

FOREX NEWS: THE WATERFALL CONTINUES: POUND STRUGGLES TO FIND SUPPORT

EUR/USD

Forex News: The pair continued its slow movement yesterday but remained above the bullish trend line. The U.S. Factory Orders came out close to analysts’ expectations and the event did not generate strong impact.


Technical Outlook

Yesterday’s price action crated minor resistance at 1.1186; if this barrier is surpassed soon, we expect a touch of 1.1240 but currently price is testing the bullish trend line and we may see a breakout. If 1.1150 holds and the trend line is broken, we will likely see a move into 1.1100 and even lower. The pair has been moving north for a few days but candles are small and now long wicks appear in their upper side. This is a sign of rejection, thus we slightly favor the short side.

Fundamental Outlook

The Fed will release today at 6:00 pm GMT the FOMC Meeting Minutes which contain details of their latest meeting and insights into the reasoning that determined the most recent rate decision. More importantly, this document may contain hints about future direction of monetary policy and if this is the case, the US Dollar will move strongly so caution is advised.

GBP/USD

The Pound resumed bearish action yesterday after a period of sideways movement and continued to depreciate to a low of 1.3050. The Financial Stability Report and Carney’s press conference did not help an already weak Pound to rebound.


Technical Outlook

At the time of writing the pair had reached a low at 1.3050, breaking the levels seen immediately after the Brexit vote on June 23. This low will probably be surpassed soon and we expect our target of 1.3000 to be reached today. The pair is likely to pause or bounce higher near this strong psychological support but the bullish side is clearly very weak now and the possibility of extended moves north is slim. First resistance may be provided by the zone around 1.3120.

Fundamental Outlook

The pair will be affected today by the technical side and by the U.S. events as the United Kingdom did not schedule major economic releases.

515

FOREX NEWS: WITNESSING HISTORY: POUND BELOW 1.2800

EUR/USD

Forex News: The pair broke the bullish trend line ahead of the FOMC Meeting Minutes and once those were released, price moved up to test the recently broken 1.1100. Most of the dollar weakness was generated by the fear that Brexit turbulences may hinder future economic growth.


Technical Outlook

The pair is currently testing 1.1100 resistance after showing rejection near 1.1025 but even if resistance is broken, we don’t expect a strong move above the 50 period Exponential Moving Average. The overall bias is bearish considering the geopolitical situation, so we expect a break of 1.1025 minor support and a move towards 1.0960. As an alternate scenario, a break of the 50 period EMA will likely take price above 1.1150.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look into American jobs situation with the release of the ADP Non-Farm Employment Change. This report is not as important as the Government released data that comes out a day after but still, higher numbers show increased economic activity and usually strengthen the US Dollar. The forecast for today’s release is a change of 158K compared to the previous 173K.

GBP/USD

The Pound is still struggling to find support but failed to do so yesterday and the waterfall continued, with a new low being created at 1.2796.



Technical Outlook

We’ve seen another huge drop and a new low created at 1.2796 but signs of rejection have appeared. The massive drop calls for a bullish retracement and both the Stochastic and Relative Strength Index are oversold, favouring a move up. This being said, the overall bias is clearly bearish and all moves north should be limited.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing Production is released, showing changes in the total output generated by the manufacturing sector. The expected change is -1.2% compared to the previous 2.3% and higher numbers usually strengthen the Pound but under present conditions, we don’t expect a strong impact.

516

FOREX NEWS: ENDING A WILD WEEK WITH A BANG: U.S. NON-FARM PAYROLLS

EUR/USD

Forex News: The jobs data released yesterday by Automatic Data Processing Inc. (ADP) showed slight improvement compared to previous readings but the event did not have a major impact and the pair ranged for most of the day.


Technical Outlook

It looks like price found strong resistance at 1.1100 so now we expect it to star moving lower, towards 1.1025. The 50 period Exponential Moving Average is also above price, angled downwards and this increases the chances of extended moves south but a lot will depend on the American jobs data that’s about to be released.

Fundamental Outlook

At 12:30 pm GMT the Non-Farm Payrolls report is released, showing the change in the number of employed people in the U.S… This is widely regarded as the most important indicator for the jobs market in the U.S and higher numbers show increased economic activity and suggest that consumer spending will pick up in the near future. The expected number is 174K, a huge increase from last month’s 38K and anything close or above this value will likely strengthen the US Dollar. Volatility usually increases and caution is always advised.

GBP/USD

The pair retraced higher yesterday, which was expected after another massive drop. The greenback wasn’t affected a lot by the ADP Non-Farm Employment Change and overall price action was slow compared to the previous days.


Technical Outlook

The current climb may extend into the zone around 1.3100 but once and if that happens, we expect the bears to step in and take back control. It’s also possible to see a drop even before 1.3100 is reached but either way, the first bearish target is represented by the 1.2800 zone. A break of the historical low created at 1.2796 will probably trigger an extended move south.

Fundamental Outlook

The pair’s direction will be heavily influenced by the release of the U.S. Non-Farm Payrolls but on the Pound side there are no major announcements.

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

517

FOREX NEWS: MARKET IN A RANGE AS INDECISION DRIVES SHORT-TERM PRICE ACTION

EUR/USD

Forex News: U.S. employment showed great improvement as seen from Friday’s NFP that posted a number of 287K, compared to the forecast 175K. However, most of the new jobs were created in the lowest paying sectors and this triggered a whipsaw that took price higher.


Technical Outlook

Price jumped up and down at the time of the NFP release but still remained below the 50 period Exponential Moving Average. There is a great degree of indecision as shown by the long wicks of the NFP candle, so we expect the pair to remain between the 50 EMA and 1.1025 for most of today’s trading session. As an alternate scenario, a break of either one of these technical levels will likely trigger an extended move in that direction.

Fundamental Outlook

The Eurogroup Meetings are today’s only notable event but these are closed to the press and a formal statement will be released once they have completed. Sometimes, participants talk to press representatives during the day and usually that is a reason for volatility but unless important matters are discussed, we don’t expect strong movement.

GBP/USD

The pair had a slow session Friday compared to the previous days and at the NFP release it behaved erratically, jumping up and down.


Technical Outlook

The pair is capped to the upside by 1.3050 and to the downside by 1.2880; these are minor levels of resistance and support and we expect price to remain between them for the most part of today’s trading session. A bullish break of 1.3050 will open the door for 1.3119 and if 1.2880 is surpassed, we expect 1.2796 to be hit. This being said, we don’t believe that price will surpass the outside levels (1.3119 or 1.2796) during today’s trading session.

Fundamental Outlook

There are no major events on today’s calendar so we expect price action to be influenced mainly by the technical aspect.

518

FOREX NEWS: POUND STILL IN THE FOCUS AS BOE GOVERNOR CARNEY TESTIFIES

EUR/USD

Forex News: The economic calendar was light yesterday and the Eurogroup Meetings didn’t bring any major news developments so overall the trading session was slow and ranging.


Technical Outlook

The pair bounced close to 1.1025 but the bulls didn’t manage to take price above the 50 period Exponential Moving Average. This shows that the market is still ruled by indecision and makes our bias neutral until either 1.1025 support or the 50 period EMA is broken. Once this happens, we expect the market to continue in the direction of the break.

Fundamental Outlook

We have a slow day from a fundamental standpoint as no major indicators are released. Price action will be mostly influenced by the technical aspect.

GBP/USD

Price remained in a relatively tight range yesterday and didn’t move past support or resistance. This was mostly due to a lacklustre fundamental scene.



Technical Outlook

Today we anticipate a break of the channel created between 1.3050 resistance and 1.2880 support but the direction is difficult to predict, given the sideways movement seen lately. Of course the big picture is still very bearish but this doesn’t exclude some bullish movement which can find resistance at the confluence zone created by 1.3120 and the 50 period Exponential Moving Average. On the other hand, a break of 1.2880 will probably trigger a move below 1.2796, thus creating a new low.

Fundamental Outlook

An important event can strongly influence the Pound today: Bank of England Governor Mark Carney will testify today at 9:00 am GMT before the Treasury Select Committee. The main topic will be the Bank of England Financial Stability Report and erratic movement is a distinct possibility during the testimony, so caution is advised.

519

[B]FOREX NEWS: TIMID BULLISH RETRACEMENTS AHEAD OF KEY BOE RATE DECISION

EUR/USD[/B]

Forex News: The pair moved above the 1.1100 barrier yesterday but the climb couldn’t be sustained and price did not continue on an upward path. The economic calendar was light, contributing to the overall lack of determination.


Technical Outlook

The move above the 50 period Exponential Moving Average and the resistance at 1.1100 did not trigger an extended climb and the pair is already showing signs of rejection. This makes us believe that if price moves back below the 50 EMA and closes a candle without long lower wicks, then it will continue until 1.1025 is reached. As an alternate scenario, if the pair remains above the 50 EMA, we expect it to head into 1.1150 and possibly 1.1186.

Fundamental Outlook

We have another slow day ahead, without any major economic releases on the calendar. Price action will be mainly driven by the technical aspect.

GBP/USD

Bank of England Governor Mark Carney mentioned during yesterday’s testimony that “the exchange rate move can help with that adjustment […]” referring to the post-Brexit conditions. This gave the Pound a push and sent the pair above immediate resistance.



Technical Outlook

Price moved above the 50 period Exponential Moving Average and above 1.3119 resistance but overall the picture is still very bearish and the oscillators are approaching overbought. While an extended move to the upside is not impossible, the more price climbs, the probability of a drop increases and we expect the pair to start moving south again soon. The first barrier and potential turning point is represented by 1.3227 but keep in mind that Thursday the Bank of England will announce the interest rate so it’s very possible to see slow price action until then.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound is not affected today by major economic releases, thus direction will be determined by the technical side.

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FOREX NEWS: BOE EXPECTED TO CUT RATE TO COPE WITH BREXIT AFTERMATH

EUR/USD

Forex News: The pair didn’t show clear direction yesterday and it seems like the majority of investors are waiting for the economic events released later in the week before choosing a side.


Technical Outlook

Price is currently trading above the 50 period Exponential moving Average and above 1.1100 but lacks a clear bias and all moves are quickly reversed. This type of behaviour will probably end with a breakout followed by an extended move in that direction but so far the market is in indecision mode and the next direction is difficult to predict. The levels to watch are 1.1025 as support and 1.1150 as resistance but keep an eye on the economic releases because those may have a strong impact.

Fundamental Outlook

At 12:30 pm GMT the American Producer Price Index comes out and is expected to show a 0.3% change from the previous 0.4%. This indicator tracks changes in the price that producers charge for their goods and services and can have inflationary implications because a higher producer price usually leads to a higher price paid by consumers. Figures above expectations for this indicator trigger US Dollar strength but this is just the rule of thumb and the impact of each release may differ.

GBP/USD

The Pound-Dollar moved sideways after an initial bullish impulse and remained above the Moving Average. However, movement was sluggish and a big part in this was played by the fact that market participants are waiting for BOE’s rate decision and are afraid to choose a direction.


Technical Outlook

Price moved above the 50 period Exponential Moving Average and above the level at 1.3227 but it seems like the bullish move is close to being exhausted so we expect a drop below the mentioned technical levels. Considering today’s huge announcement, the technical aspect is secondary, volatility may increase and price may move erratically. Extreme caution is advised!

Fundamental Outlook

The Bank of England (BOE) is expected to cut rates from 0.50% to 0.25%. If this comes true, the Pound is likely to drop further but of course, this is not a certainty and the pair may react differently than expected, depending on how market participants will interpret BOE’s decision. The event is scheduled at 11:00 am GMT and is accompanied by a breakdown of the members’ votes as well as a Monetary Policy Summary, which will contain details of the reasons that determined the rate decision.

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your post is out of date the moment you posted it. The decision (not to cut) has already been announced