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623

FOREX NEWS: US DOLLAR SUFFERS TEMPORARY WEAKNESS

EUR/USD

The Non-Farm Payrolls numbers came out very close to estimates Friday but the previous value was revised from 161K to 147K. It’s not uncommon for this to happen but when the number is revised lower, usually the US Dollar has to suffer.


Technical Outlook

Price action remained choppy but had a bullish bias due to US Dollar weakness generated by the NFP revision. It looks like 1.0650 is now clearly broken and the pair is trading above the 50 period Exponential Moving Average, so the short term picture is bullish but not in a definitive manner. If today price remains above the 50 EMA, we expect a touch of 1.0710.

Fundamental Outlook

The Eurogroup Meetings take place today and may generate some volatility but this will be limited unless surprising discussions take place. The Meetings are closed to the press but a formal statement is released at the end of the day; sometimes participants talk to the press during the day.

At 3:00 pm GMT the U.S. Non-Manufacturing PMI comes out, with a forecast reading of 55.3. This is a survey of purchasing managers from outside the manufacturing sector and usually has a mild impact on the US Dollar, with higher numbers strengthening it.

GBP/USD

Friday the Pound had another great day, gaining against the US Dollar and breaking another resistance level. The bias is bullish but the oscillators are overbought.


Technical Outlook

Friday’s climb took both oscillators in overbought territory and this makes us anticipate a minor pullback before 1.2770 is hit. The previous resistance at 1.2675 may turn into support and reject price higher; if this is the case, the chances of a push into 1.2770 will increase. A more important level is located at 1.2855 but we don’t expect it to be reached today.

Fundamental Outlook

The British Services PMI is released today at 9:30 am GMT and is the only notable Pound affecting indicator. The expected value is 54.2 and higher numbers can strengthen the currency because the survey acts a measure of optimism focused of course on the Services sector.

624

FOREX NEWS: GREENBACK CONTINUES TO LOSE. OVERSOLD OSCILLATORS WARN OF RETRACEMENTS

EUR/USD

Forex news: The week opened lower but the gap was soon closed and the pair broke resistance. The move was mostly generated by the Italian Constitution Amendment Vote.


Technical Outlook

The break of 1.0710 opens the door for an extended move into the resistance at 1.0800, which is both a psychological level and a technical level better seen on the Daily chart. However, we are not dealing with an uptrend yet so the possibility of a drop must not be overlooked. When the Relative Strength Index and Stochastic become overbought, we anticipate bearish pullbacks that will probably confirm 1.0710 as support. If this level doesn’t become support, we anticipate a drop below 1.0650.

Fundamental Outlook

The ECOFIN Meetings take place today, attended by Finance Ministers from the EU member states. The event often goes unnoticed but caution should be used because surprises can always happen.

On the US Dollar side we have the Factory Orders, released at 3:00 pm GMT but this is an indicator with a medium-to-low impact on the greenback so we don’t expect sharp moves. A higher change than the anticipated 2.5% shows an increase in production and usually strengthens the US Dollar.

GBP/USD

The pair had similar behaviour to the EUR/USD, opening with a gap lower and then climbing above the point where the gap originated. Most of yesterday’s trading session was choppy but with a bullish bias.


Technical Outlook

For a second time in a short while both oscillators are moving in overbought territory and this calls for a retracement to the downside. It is very likely to see a touch of 1.2770 resistance and then a drop lower but we don’t exclude the possibility of such a move occurring before that level is reached. After this potential retracement, we expect the bullish momentum to resume and 1.2770 to be broken.

Fundamental Outlook

The British economic calendar is light today, without any major announcements so the pair’s direction will be mostly influenced by the technical side.

625

FOREX NEWS: RESISTANCE HOLDS STRONG AS BEARISH PRESSURE MOUNTS

EUR/USD

The first part of yesterday’s trading session belonged to the bulls, who took price into 1.0800 zone; however, the pair lost steam and bounced lower once the barrier was hit.


Technical Outlook

The pair bounced lower immediately after hitting 1.0800 resistance and now we can expect the bearish move to extend into 1.0710 which may turn into support. If this level is breached, we expect a touch of the 50 period Exponential Moving Average but as long as price remains above this dynamic support, the picture is bullish and the probability of another encounter with 1.0800 is high.

Fundamental Outlook

Today’s price direction will be mostly decided by the technical aspect because the United States and Europe don’t release any major economic indicators so we have a lacklustre fundamental scene for both currencies.

GBP/USD

The pair continued its climb yesterday and reached the resistance at 1.2770 but now bearish pressure has increased and a retracement is in the making.


Technical Outlook

The control currently belongs to the bulls but the resistance located at 1.2770, combined with the overbought condition of the Stochastic and Relative Strength Index will most likely generate a move lower that is likely to touch 1.2675. If this level will turn into support and price will bounce off of it, then we can expect a break of 1.2770 and a consequent move into 1.2855, which is a level best seen on a Daily chart. These moves will probably happen over the course of several days.

Fundamental Outlook

The British Manufacturing Production numbers are released at 9:30 am GMT and this will be the main market mover for the Pound. The indicator tracks changes in the total value of goods produced by manufacturers and usually, higher numbers strengthen the currency because they indicate increased economic activity; the forecast is 0.2%, while the previous was 0.6%.

626

FOREX NEWS: EURO STEALS THE SPOTLIGHT. ALL EYES ON ECB PRESS CONFERENCE

EUR/USD

Yesterday the pair slowed down but it is clear now that 1.0710 has become support and until that changes, the bias is bullish. The fundamental scene was quiet and this contributed to a slow session.


Technical Outlook

The 50 period Exponential Moving Average is angled upwards and the level at 1.0710 is confirmed as support so the short term bias is bullish and we anticipate a touch of 1.0800. If the mentioned support is broken, we can expect the 50 EMA to push price higher but a break of this barrier would suggest a reversal to the downside. Price direction will be heavily influenced by the ECB Rate announcement and Mario Draghi’s press conference so we recommend caution as the technical side will be secondary.

Fundamental Outlook

At 12:45 pm GMT the European Central Bank will announce their decision regarding the interest rate and although no change is expected from the current 0.00%, the event usually generates volatility. However, the pair may be unwilling to choose a direction until the ECB Press Conference takes place, 45 minutes later, at 1:30 pm GMT. During this conference, ECB President Mario Draghi will answer journalists’ questions and will talk about the reasons that determined the rate decision. It’s possible for him to offer hints about future monetary policy and if this is the case, the Euro will respond accordingly.

GBP/USD

British Manufacturing Production disappointed, as shown by yesterday’s numbers (forecast 0.2%, actual -0.9%) and this affected the Pound negatively, allowing the pair to drop into the 50 period Exponential Moving Average.


Technical Outlook

After the perfect bounce at 1.2770, price moved below 1.2675 and is now testing the 50 period EMA on the four-hour chart. It’s not yet clear whether the bears can break it or not but if they do, we expect to see more downside movement, with 1.2480 – 1.2500 zone as first target. Even if price reaches this zone, we don’t expect it to travel in a straight line (we’ll probably see bullish bounces until it reaches support). On the other hand, a quick move above the 50 EMA will make 1.2770 the target once again.

Fundamental Outlook

The United Kingdom didn’t prepare any special economic releases for today, thus price direction will be decided mainly by the technical aspect.

627

FOREX NEWS: EURO ON THE RETREAT ON THE BACK OF DOVISH DRAGHI COMMENTS

EUR/USD

As expected the ECB maintained the rate unchanged but during the ECB press conference that followed, the Euro started to weaken on the back of Mario Draghi’s comments that were perceived as dovish by the market.


Technical Outlook

The Euro took a hit yesterday and after a short lived move to the upside, the pair started to drop and broke through several support levels. The 50 period Exponential Moving Average is also clearly broken and the medium term bias is once again bearish as long as price remains below this technical indicator. We expect another encounter with 1.0570 and possibly 1.0525 but keep in mind that sometimes after a strong move to one side (like the one seen yesterday), a retracement soon follows.

Fundamental Outlook

Only one important economic release made it to today’s headlines: the University of Michigan Consumer Sentiment. This is a survey that tries to gauge the confidence of consumers in current economic conditions and usually a higher number indicates that in the future consumer spending will increase. This often strengthens the US Dollar so we may see further downside action for the pair if the actual number will be above the forecast 94.3; the time of release is 3:00 pm GMT.

GBP/USD

Yesterday the US Dollar made a nice comeback against the Pound after a bounce round 1.2675 which is now confirmed resistance. Bearish pressure mounts but the Moving Average is not yet broken decisively.


Technical Outlook

After a climb early during yesterday’s session, the pair dropped to test the 50 period Exponential Moving Average and although at the time of writing price is below it, we cannot yet consider it a true break. If the pair remains below this technical indicator, we expect to finish the week on a bearish note, with price approaching 1.2480 – 1.2500 but we don’t expect this target to be hit today. A quick return above the 50 EMA will make 1.2675 the first target.

Fundamental Outlook

Price action today will be mainly driven by the U.S. Consumer survey and by the technical aspect because the United Kingdom didn’t schedule major news releases.

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

628

FOREX NEWS: KEY SUPPORT LEVELS THREATENED AGAIN, OSCILLATORS APPROACH OVERSOLD

EUR/USD

Forex News: Friday the pair continued the bearish momentum started a day earlier and the US Dollar continued to strengthen against the Euro. Part of the Dollar’s good performance was due to a better than expected Consumer Sentiment survey (forecast 94.3, actual 98.0).


Technical Outlook

Although lately the bears have been in control, the key support at 1.0525 is not broken, the Stochastic is oversold and the Relative Strength Index is very close to its 30 level (which indicates oversold). These factors increase the chance of a bounce higher but as long as the pair is trading below the 50 period Exponential Moving Average, our bias is bearish. If 1.0525 is broken the pair will test 1.0460, which is the lowest price reached since early 2015.

Fundamental Outlook

We don’t have any major releases on today’s economic calendar, thus the main focus will be on the technical aspect. After last week’s strong movement, it’s likely to see a slow, ranging trading session.

GBP/USD

The Pound-Dollar pair had a choppy session Friday and an early climb was soon reversed by the 50 period Exponential Moving Average. The day ended close to where it started and no major advances were made.


Technical Outlook

Bullish price action found resistance at the 50 period Moving Average but the bearish bounce didn’t continue through Thursday’s low and now the pair is trading without a clear direction. The most part of last week was controlled by the bears and if they can maintain control we will likely see a move closer to 1.2480 – 1.2500 but we don’t expect this target to be reached today. A clean break of the 50 EMA would make 1.2675 the first target.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected by major economic indicators today, thus the technical side will be the main market mover.

629

FOREX NEWS: US DOLLAR SHOWS TEMPORARY WEAKNESS, AHEAD OF BRITISH INFLATION DATA

EUR/USD

Forex News: The pair found once again strong support at 1.0525 and bounced higher, generating a bullish trading session yesterday. There were no major news releases so price direction was mostly driven by the technical aspect.


Technical Outlook

Lately the level at 1.0570 doesn’t seem to have a lot of importance for price and as we can see it was breached twice without any struggle. However, 1.0525 remains a key support, while to the upside the first barrier is represented by the 50 period Exponential Moving Average. Today we expect to see an encounter with this dynamic resistance and with the level at 1.0650; if that resistance zone cannot be broken, we expect to see another move to test 1.0525, otherwise the pair is headed for 1.0710 again but we favour the short side as long as price is trading below the 50 EMA.

Fundamental Outlook

The German ZEW Economic Sentiment Survey is today’s main release, scheduled at 10:00 am GMT and expected to increase to 14.2 from the previous 13.8. This is a survey of about 275 German professional investors and analysts and acts as a leading indicator of economic health focused on the respondents’ 6-month outlook. Higher numbers show optimism and usually strengthen the Euro but the impact is not always very strong.


GBP/USD

The US Dollar had a slow start of the week against the Pound and the pair moved back above the 50 period Exponential Moving Average on the four-hour chart. The picture is once again blurry and the pair may be entering another ranging period if a breakout is not registered soon.


Technical Outlook

The pair is testing 1.2675 again, with both oscillators showing good upside momentum and this increases the chance of a bullish break of said level. If this is the case, we expect to see a continued move to the upside during the days to come, but if price bounces lower here, the 50 period Exponential Moving Average will become the first target for today. If the moving average is broken, the next destination may be the recent low at 1.2550, which will act as support.

Fundamental Outlook

The British Consumer Price Index is today’s highlight for the Pound. The indicator is the main gauge of inflation and usually has a high impact on the currency, with higher numbers strengthening it. The time of the release is 9:30 am GMT and the expected change is 1.1% (previous 0.9%).

630

FOREX NEWS: TO HIKE OR NOT TO HIKE? BUCKLE UP FOR MASSIVE MOVES

EUR/USD

Forex News: The pair had a choppy session yesterday, without a clear direction and without much movement. The German ZEW survey disappointed and this initially weakened the Euro to a limited extent but the losses were soon erased.


Technical Outlook

Price is still struggling to break the 50 period Exponential Moving Average and the resistance at 1.0650 and control doesn’t clearly belong to either side. This type of behaviour is likely to continue today until the Fed announce their rate decision and the technical aspect will be secondary. The levels to watch are 1.0650 (current resistance), 1.0700 and 1.0525; be prepared for irregular movement and increased volatility.

Fundamental Outlook

Today is a crucial day for the US Dollar as the Fed will announce their decision on the interest rate. The forecast is an increase to <0.75% from the current <0.50% and if it comes true, we can expect to see massive US Dollar strength and increased volatility. The FOMC Statement is released at 7:00 pm GMT and will contain the outcome of the rate decision as well as insights into the reasons that determined it.

Half an hour later, at 7:30 pm GMT, Fed Chair Janet Yellen will hold a press conference during which she will answer journalists’ questions and will offer more details about monetary policy. The entire cluster of events will probably create irregular movement so we recommend caution until things calm down.

GBP/USD

British inflation improved as shown by yesterday’s CPI release (actual 1.2%, expected 1.1%) and this strengthened the Pound, taking the pair above resistance.


Technical Outlook

The resistance at 1.2675 is now broken so we can expect to see a move closer to 1.2770 but in case price drops through the recently broken level, we will likely see an encounter with the 50 period Exponential Moving Average. The Stochastic is overbought and this increases the chances of a move lower but it is not a clear indication that price will drop today. Keep in mind that the Fed Meeting will have a strong impact on the US Dollar and thus on the pair.

Fundamental Outlook

At 9:30 am GMT the British Claimant Count is released, showing changes in the number of people who asked for unemployment related help. The indicator acts as a measure health for the UK jobs market that can strengthen the Pound if it posts a lower number than the forecast 6.2K. Later in the afternoon the pair will be heavily influenced by the Fed Meeting.

631

FOREX NEWS: FED HIKES AND DOLLAR STRENGTHENS. BUT FOR HOW LONG?

EUR/USD

Forex News: Ahead of the Fed release the pair moved almost completely sideways, as most traders were waiting for the announcement. The Fed decided towards a raise to <0.75% and also mentioned that 3 more hikes should be expected during 2017; the US Dollar responded by strengthening and the pair slipped lower, touching support.


Technical Outlook

The resistance at 1.0650 and the 50 period Exponential Moving Average continued to reject rising price and now the pair is testing the support at 1.0570. If this level can be broken, we expect to see a drop into 1.0525 and even lower, towards 1.0460. The US Dollar is surrounded by a positive sentiment and will likely continue to strengthen during the days to come but at the moment, the pair’s direction is still not clear so we cannot exclude a sudden move up.

Fundamental Outlook

Today at 1:30 pm GMT we take a look at U.S. inflation with the release of the Consumer Price Index. Under normal circumstances, a higher change than the forecast 0.2% strengthens the US Dollar but given yesterday’s events, we may get a mixed reaction from this release.

GBP/USD

The British Claimant Count Change showed that less people applied for unemployment related benefits last month and this strengthened the Pound early during yesterday’s session. However, the Fed rate hike nullified all the gains and took the pair below the 50 period EMA.


Technical Outlook

The latest impulse is bearish and the US Dollar is gaining against most of its counterparts, so we anticipate a touch of 1.2550 in the short term and possibly a move below 1.2480 during the days to come. However, if the pair will reverse and move above the 50 period Exponential Moving Average, this scenario will be invalidated and 1.2675 will become the first bullish target.

Fundamental Outlook

The first release of the day for the Pound is scheduled at 9:30 am GMT in the form of the British Retail Sales. This type of sales represents a major part of the entire consumer spending and a higher number shows increased economic activity; the forecast is a change of 0.2% and usually numbers above it strengthen the currency.

At 12:00 pm GMT the Bank of England will announce the interest rate (no change expected from the current 0.25%) and will release a Monetary Policy Summary that contains details about the reasons that influenced the rate decision. More importantly, the Summary may contain hints about future rate changes and if that’s the case, we expect the Pound to react strongly.

632

FOREX NEWS: US DOLLAR IN TOTAL CONTROL. SMALL PULLBACKS ANTICIPATED

EUR/USD

Forex News: U.S inflation numbers that came out yesterday matched analysts’ expectations (0.2% change) so the release didn’t have a strong impact but the pair continued to descend yesterday, mostly due to the Fed hike.



Technical Outlook

The pair broke 1.0460, which was the lowest point reached since 2015 so now we could say we are in uncharted waters because the current level was last seen in 2003. The bears are in clear control and we expect further downside movement in the medium term but the oscillators have reached oversold and price travelled a long distance without a retracement. The level at 1.0460 may act as resistance for such a pullback but overall we expect price to move lower.

Fundamental Outlook

At 10:00 am GMT the Eurozone Final CPI is released, showing changes in the price paid by consumers for the goods and services they purchase. The indicator acts as a measure of inflation but the Final version is the least important; nonetheless, higher numbers than the forecast 0.6% can strengthen the Euro but to a limited extent considering the current situation.

On the US Dollar side we have the U.S. Building Permits, released at 1:30 pm GMT and expected to show 1.24M, slightly lower than the previous 1.26M. The indicator is a measure of activity in the housing sector and higher numbers can strengthen the currency but the impact is usually mild.

GBP/USD

The Bank of England kept the rate unchanged and the British Retail Sales matched the forecast so the Pound wasn’t much affected. The US Dollar continued to strengthen and the day ended significantly lower.


Technical Outlook

The huge drop seen over the last couple of days is likely to continue until 1.2385 support is touched but we may see a retracement higher soon, due to the overextended condition of price. The oscillators have entered oversold and warn of such a possible pullback but after this move is completed, we expect the pair to continue lower.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today but the pair will be directly affected by the U.S. Building Permits.

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

633

FOREX NEWS: BUYERS FIGHT BACK, US DOLLAR STILL HYPED BY FED BOOST

EUR/USD

Forex News: The pair retraced higher Friday but movement was slower compared to the previous days. The bears are in control but an extended move up is not out of the question.


Technical Outlook

After hitting the low at 1.0366 price moved higher to test the recently broken support at 1.0460 but for now it looks like the level is holding and may turn into resistance. If this is the case, we expect to see another drop closer to 1.0366 but a move above 1.0460 will open the door for a touch of 1.0525. However, as long as the pair is trading below 1.0525 and the 50 period Exponential Moving Average, our bias is bearish.

Fundamental Outlook

Today’s highlight is the release of the German IFO Business Climate, a survey of about 7,000 businesses that tries to gauge the optimism of respondents regarding a 6 month outlook on economic conditions. The time of the release is 9:00 am GMT and the expected value is 110.7, slightly higher than the previous 110.4.

GBP/USD

Friday was a better day for the Pound, which strengthened against the greenback after an almost perfect bounce at support. The economic calendar was light so the bounce can be mostly attributed to the technical side.


Technical Outlook

It looks like the pair has found good support at 1.2385 as seen from Friday’s price action, so we can expect this level to be of importance for future direction. Currently the pair is testing 1.2480 zone but rejection is present as shown by the long wick of the penultimate four-hour candle; also, the US Dollar is still strengthening so it’s very likely to see a resumption of the bearish movement from this level. As an alternate scenario, a clear break of 1.2480 will probably take price closer to the 50 EMA and the level at 1.2550.

Fundamental Outlook

The economic calendar is empty today for the Pound, so the technical aspect will be the deciding factor for the pair’s direction.

634

FOREX NEWS: DOWNTREND STAGGERS, RANGE-BOUND TRADING AHEAD

EUR/USD

Forex News: The bulls didn’t manage to take the pair above resistance yesterday, although the German IFO Business Climate posted a higher reading than analysts had anticipated. The release created just a brief moment of upside movement and soon after, price took a downwards direction.


Technical Outlook

So far the resistance at 1.0460 is holding and seems to reject price lower so we anticipate another encounter with the low at 1.0366. However, it’s possible to see the start of a ranging period, with price moving above and below 1.0460 without a clear direction. The week lacks major economic releases and Christmas is approaching so we may enter a period of irregular volatility but as long as the pair is trading below the 50 period Exponential Moving Average, we favour the short side.

Fundamental Outlook

The German Producer Price Index is scheduled for release today at 7:00 am GMT and expected to show a change of 0.1% from the previous 0.7%. The indicator usually has a low impact but higher numbers are beneficial for the currency and this is the only notable indicator of the day.

GBP/USD

The bears controlled most of yesterday’s trading session after a bounce at resistance. The move was mostly technical because the economic calendar lacked any major releases.


Technical Outlook

The resistance zone around 1.2500 capped upside movement yesterday and now it appears like 1.2385 is broken. This support is important for short term price action, so of the bears can keep the pair below it, we expect to see a move into 1.2325 (1.2300), possibly during today’s session. A quick move above the current level will make the next direction uncertain and will probably trigger ranging movement.

Fundamental Outlook

The Pound has another lacklustre day from a fundamental standpoint as no major releases are scheduled. This will likely contribute to slow, ranging movement.

635

FOREX NEWS: OVEREXTENDED MOVES CALL FOR BULLISH PULLBACKS

EUR/USD

Forex News: The German Producer Price Index released yesterday showed a slightly better than anticipated value but this didn’t do much for an already weak Euro. The pair continued its descent and pierced the low at 1.0366.


Technical Outlook

The main direction is south but the pair is likely to retrace higher before 1.0366 support can be broken decisively. Yesterday price breached the mentioned support but this is by no means a true break yet and it must be noted that the Relative Strength Index as well as the Stochastic are approaching oversold, thus increasing the chances of a pullback north. Price action may be irregular today and the rest of the week, due to the approaching of Christmas and the lack of major economic releases.

Fundamental Outlook

The only notable indicator of the day is released at 3:00 pm GMT: the U.S. Existing Home Sales. The indicator shows the annualized number of previously owned houses (not new construction) that were sold during the previous month and a higher reading usually shows increased economic activity and a healthy house market. The forecast is 5.52M while the previous value was 5.60M.

GBP/USD

The US Dollar continued its assault on the Pound yesterday and the pair dropped to touch the next support. The economic calendar was light so the fundamental side didn’t have a major impact.


Technical Outlook

The support around 1.2325 – 1.2300 is strong and although the main direction is down, we may see a bullish pullback from this area. The situation is similar to the EUR/USD, with both oscillators approaching oversold and price near support, so it’s possible for the pair to continue to move south but the extent should be limited before a retracement occurs.

Fundamental Outlook

The United Kingdom didn’t schedule any notable news releases so the technical side will be the main market mover.

636

FOREX NEWS: SUPPORT HOLDS, DOWNTREND STILL INTACT AHEAD OF U.S. GDP

EUR/USD

Forex News: The U.S. Existing Home Sales posted yesterday a higher number than analysts’ expectations but the release didn’t have the strength to drive the pair lower and instead a bullish retracement occurred.


Technical Outlook

The retracement was expected and so far it’s not a reason of concern for the downtrend but it’s very likely to see an encounter with 1.0460 which may turn into resistance. If the level is breached, the pair will touch the 50 period Exponential Moving Average and we expect it to reverse lower unless the US Dollar will be weakened by the economic data released throughout the day. To the downside 1.0366 zone remains strong support, while to the upside we don’t expect the pair to surpass 1.0525.

Fundamental Outlook

Today is probably the busiest day of the week, with two important releases, both scheduled at 1:30 pm GMT: the CORE Durable Goods Orders and the U.S. Gross Domestic Product (Final version). The first is a leading indicator of production that shows changes in orders placed for goods with a life expectancy of at least 3 years, excluding transportation items (expected change 0.2%, previous 0.8%). The GDP is the main gauge of economic performance but the Final version is the least important, so we don’t expect huge volatility at the release; nonetheless, higher values for these indicators usually bring US Dollar strength.

GBP/USD

Yesterday after another encounter with support, the pair jumped higher to test the resistance at 1.2385, showing choppy price action and no clear direction.


Technical Outlook

During the recent period the pair has touched 1.2325 support twice and both times it moved higher, reaching resistance. Until a clear break happens, the pair is likely to stay in range mode, bouncing between support and resistance. The downtrend is still present and the US Dollar is still strong but this doesn’t exclude a move above 1.2385 before bearish action can resume.

Fundamental Outlook

The economic calendar for the Pound is light so the U.S. releases will be the main price mover, as well as the technical aspect.

637

FOREX NEWS: CHRISTMAS APPROACHES, CHOPPY PRICE ACTION EXPECTED


EUR/USD

Forex News: Both U.S. Indicators released yesterday posted better than expected readings but despite this, the pair continued slowly higher, reaching resistance.


Technical Outlook

The pair is testing the resistance level at 1.0460, in very close vicinity of the 50 period Exponential Moving Average. These two types of resistance (horizontal and dynamic, respectively) represent a confluence zone that will be tough to break by the buyers but on the other hand, a break would show bullish strength, indicating that price is likely to extend higher. The next target and possible barrier is located at 1.0525, while to the downside, 1.0366 remains a key level.

Fundamental Outlook

The U.S. New Home Sales numbers are released today at 3:00 pm GMT and this will be the only notable indicator of the day. The forecast is 575K and values above this number show increased activity on the house market; usually this strengthens the US Dollar but to a limited extent. The approaching of Christmas will probably trigger irregular volatility and choppy price action, thus caution is recommended.

GBP/USD

The pair slid lower yesterday and touched the support at 1.2325 once again in a short while. It’s safe to say that until support or resistance is broken, the pair will be in range mode.


Technical Outlook

The bears are struggling to break the support zone around 1.2325 but the move lacks steam and the Relative Strength Index has been moving very close to its oversold level for a long time. This increases the chances of a bullish bounce from the current level but the pair is trapped between 1.2385 resistance and 1.2325 support so we consider it in range mode until it moves outside the mentioned levels.

Fundamental Outlook

The Pound will be affected by the release of the Current Account and the British GDP, both scheduled at 9:30 am GMT. The Current Account shows the difference in value between imports and exports (expected to show -28.3B), while the GDP is the main gauge of an economy’s performance (forecast 0.5%) and higher values for these indicators usually strengthen the Pound.

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

638

FOREX NEWS: LOW VOLUME, IRREGULAR PRICE ACTION AS THE WINTER HOLIDAYS TAKE OVER

EUR/USD

Forex News: Friday the pair moved slightly higher but didn’t break the 50 period Exponential Moving Average and price action was choppy, which is normal before Christmas when trading volume starts to dim.


Technical Outlook

The 50 period EMA is still preventing the pair from going higher and 1.0460 resistance is still intact. This means that we are dealing with a ‘bounce or break’ scenario where a bounce would take price closer to 1.0366 and a break would make 1.0525 the first target but many countries celebrate the Winter Holidays, so liquidity, volume and price action in general will be affected. Our bias is neutral and we recommend caution.

Fundamental Outlook

German banks are closed today in observance of Boxing Day and Italian banks are closed due to St. Stephen’s Day. Also US banks are closed, celebrating Christmas Day so we expect a day without much movement and probably irregular price action.

GBP/USD

Although the Pound benefited from positive economic data released Friday, the pair descended during the first part of the day but bounced at support and erased most of the earlier losses.


Technical Outlook

The Relative Strength Index and Stochastic are exiting oversold territory and this favours an extended move up that may have 1.2325 as destination. The level at 1.2250 is still considered support although it was breached Friday, so we may see another attempt to break it during the days to come. For today our view is neutral considering that volume and volatility will be affected by the Winter Holidays.

Fundamental Outlook

UK banks are closed today in observance of Boxing Day and no economic indicators are released. We recommend caution because price behaviour will be uncertain.

639

FOREX NEWS: ACTION RESUMES, VOLUME STILL AFFECTED BY WINTER HOLIDAYS

EUR/USD

Forex News: As expected, the pair reached a stalemate yesterday and no major developments took place, due to the Winter Holidays.


Technical Outlook

Price is flat and yesterday’s trading session doesn’t hold any information about future direction. We expect the pair to continue with its irregular movement and volume will still be affected. Our bias is neutral and we recommend caution.

Fundamental Outlook

At 3:00 pm GMT the U.S. Consumer Confidence survey is released, showing the opinions of 5,000 households about current and future economic conditions. The expected figure is 108.9 and usually, higher numbers strengthen the US Dollar, but given the current low volume, we don’t know what the exact impact will be.

GBP/USD

There wasn’t much action yesterday and the pair remained between support and resistance, with little to no volume.


Technical Outlook

Given the current situation, our bias is neutral until volume returns to normal or at least until action picks up. The pair is in a downtrend that seems overextended so we expect some sort of retracement sooner rather than later. The levels to watch remain 1.2250 as support and 1.2325 as resistance.

Fundamental Outlook

UK banks will be closed, celebrating Christmas Day and no economic indicators will be released. We recommend caution because price action will still be affected.

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FOREX NEWS: MARKETS IN INDECISION MODE AS END OF YEAR APPROACHES

EUR/USD

Forex News: Throughout yesterday’s trading session the pair remained in a very tight range, with almost flat price action. The U.S. Consumer Confidence survey showed a better than anticipated value but this didn’t have a strong impact on the US Dollar.


Technical Outlook

The pair is still clearly affected by the Winter Holidays and is moving sideways, lacking any clear direction. Volume is still low and volatility can become irregular, meaning that price may jump to one direction or the other without warning. Caution is still recommended until a clear direction emerges; the levels to watch are 1.0460 as resistance and 1.0366 as support.

Fundamental Outlook

The U.S. Pending Home Sales are released today at 3:00 pm GMT and expected to show a change of 0.6% compared to the previous 0.1%. This is considered a medium impact indicator that shows changes in the number of homes under contract to be sold and usually a higher value strengthens the US Dollar but given the current low volume, its release may go mostly unnoticed.

GBP/USD

The bears took the pair lower yesterday and tested support once again but without a clear break. The picture is still blurry and the pair is in range mode.


Technical Outlook

The pair shows bearish pressure as price is trying to push below 1.2250 support but as mentioned before, the Relative Strength Index has been moving very close to oversold for a long while. This suggests that a bullish pullback is about to occur, but given the current low volume, we cannot anticipate when this will happen. Caution is still recommended.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today so the only highlight will be the U.S. indicator that comes out in the afternoon.

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FOREX NEWS: DOWNTREND RESUMPTION OR END-OF-YEAR FAKE-OUT?

EUR/USD

Forex News: The pair picked up speed yesterday and dropped after a brief climb above resistance. The U.S. Pending Home Sales did not have a strong impact and price started to move lower before the release.


Technical Outlook

If the current bearish momentum continues, we are likely to see another attempt to break 1.0366 but keep in mind that lately the pair has been in ranging mode, so it’s very possible to see a quick reversal that will test the 50 period Exponential Moving Average again. The chances of a move up are increased by the Relative Strength Index approaching its 30 level and suggesting that the pair is becoming oversold again.

Fundamental Outlook

The only notable release of the day is the U.S. Unemployment Claims, scheduled at 1:30 pm GMT. The indicator tracks the number of people who asked for unemployment related benefits during the previous week but because it’s released weekly, its impact is not huge; however, a higher number than the forecast 277K can weaken the US Dollar because it may indicate a drop in consumer spending in the near future.

GBP/USD

Yesterday’s session belonged to the bears and the US Dollar strengthened against the Pound allowing the pair to drop below the support at 1.2250 which rejected price almost perfectly so far.


Technical Outlook

The support at 1.2250 acted as a key level over the last period and now it may turn into resistance for future price action. The Relative Strength Index is hugging its oversold level for a long while and this means that a retracement is about to occur; the first target for this potential move up is the mentioned level (1.2250), followed by the 50 EMA. Keep in mind that the pair is still in a downtrend but also that volume and volatility are not completely back to normal.

Fundamental Outlook

Same as the rest of the week, UK’s economic calendar is light so we expect price direction to be influenced mainly by the U.S. release mentioned above and by the technical aspect.

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FOREX NEWS: LAST TRADING DAY OF 2016. IRREGULAR PRICE ACTION EXPECTED

EUR/USD

Forex News: Yesterday’s price action confirmed that the pair is in range mode and we saw a bounce near support. Most of the day was controlled by the bulls but resistance wasn’t clearly broken.


Technical Outlook

Price came very close to the support located at 1.0366 and bounced higher, into 1.0460 resistance without breaking it. This is typical behaviour for a ranging market and the fact that today is the last trading day of 2016 will contribute to irregular price behaviour. Our bias is neutral and we anticipate alternating periods of volatility, thus caution is recommended.

Fundamental Outlook

The economic calendar doesn’t hold any major indicators and price action will be mainly affected by end-of-year volatility.

GBP/USD

The pair retraced higher during the first part of yesterday’s trading session but a drop that erased most of the gains soon followed. The short term is clearly affected by the approaching of New Year’s Eve and the pair doesn’t have a clear direction.



Technical Outlook

Recent price action established 1.2200 as short term support and it seems like the zone around 1.2250 is now resistance. From a longer term perspective the pair is still in a downtrend that is in need of a stronger retracement and from a short term point of view, price is ranging. Volatility and direction today will be irregular and we recommend caution.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements today. We hope you had a profitable trading year and we wish you a better 2017.