Technical News | Daily

[GDMFX]

FOREX NEWS: MARKETS IN LIMBO AS NEW YEAR CELEBRATIONS CONTINUE ACROSS THE GLOBE

EUR/USD

Forex News: Choppiness continued Friday after a strong move up that reached resistance and bounced lower immediately after touching it. Now the pair is trading above the 50 period Exponential Moving Average but no clear trend is in place.

Technical Outlook

Today we will get low volume and little to no movement. Most banks across the globe will be closed in celebration of the New Year and this will also contribute to the irregular price action; spreads may increase and although this is normal during such times, we recommend careful placement of Stop Loss orders and caution overall until things return to normal.

Fundamental Outlook

As expected, today no major indicators are released and on top of that, U.S. banks are closed in celebration of New Year’s Day. This means that volume will be affected and price may behave erratically.

GBP/USD

Friday price moved and remained above the 50 period Exponential Moving Average, completing a bullish retracement that was already anticipated for a while.

Technical Outlook

As long as the pair is trading above the 50 period Exponential Moving Average, we may see an extended move to the upside but from a longer term perspective, price is in a downtrend. It must be noted that the level at 1.2385 offered strong resistance and rejected price lower, so a move below the 50 EMA is not out of the question but liquidity will be thin today and this will probably generate choppy movement.

Fundamental Outlook

Banks in the United Kingdom will also be closed due to New Year’s Day, so price will probably lack a clear direction.

[GDMFX]

FOREX NEWS: VOLATILITY PICKS UP AS BANKS RE-OPEN AFTER NEW YEAR CELEBRATIONS

EUR/USD

Forex News: Yesterday’s trading session belonged to the bears and we saw the pair descend below 1.0525 and below the 50 period Exponential Moving Average. Some banks around the globe were closed due to New Year celebrations, so volume remained relatively low.

Technical Outlook

The move below the 50 period EMA seems fragile and 1.0460 may turn into support. If this is the case, we will probably see a bounce above the moving average and possibly another test of 1.0525 but it must be noted that conditions still haven’t returned to normal so we may get a choppy trading session, with sharp reversals and irregular price movement. As long as the pair is trading below the 50 EMA, our bias is slightly bearish.

Fundamental Outlook

At 1:00 pm GMT we take a first look at German inflation with the release of their Preliminary Consumer Price Index. The forecast is a 0.6% increase from the previous 0.1% and if this prediction comes true or of higher numbers are posted, the Euro is likely to strengthen against its counterparts.

Later in the day, at 3:00 pm GMT the U.S. Manufacturing PMI is released, showing the opinions of purchasing managers from the manufacturing sector regarding business conditions in said sector. Higher numbers than the forecast 53.7 show optimism and usually give a boost to the US Dollar but the impact is often limited if the actual number comes close to the forecast.

GBP/USD

The US Dollar strengthened against the Pound as well yesterday and the pair dropped below the 50 period Exponential Moving Average, completing a bearish but choppy trading session.

Technical Outlook

The current bearish impulse might extend into the support at 1.2250 but we don’t expect this move to complete during the course of one day unless surprising developments take place. The level at 1.2325 may turn into resistance but we don’t exclude the possibility of a move above it because the trading environment is still affected by the start of the New Year and liquidity is low. Caution is still recommended.

Fundamental Outlook

The British Manufacturing PMI is released today at 9:30 am GMT and is expected to show a value of 53.3, almost identical to the previous 53.4. This survey acts as a leading indicator of economic health, with higher numbers strengthening the Pound but usually the impact is mild if the actual number is close to analysts’ prediction.

[GDMFX]

FOREX NEWS: SUPPORT THREATENED, US DOLLAR IN CHARGE AHEAD OF FOMC MEETING MINUTES

EUR/USD

Forex News: The US Dollar won the battle against the Euro yesterday, boosted also by a better than expected Manufacturing PMI survey. Key support is threatened and seems like volume is back after the winter holidays.

Technical Outlook

The pair is currently testing the zone of support around 1.0366 and reached a low that was last seen in the year 2003. If the current support zone is broken decisively, price will be ‘free falling’ because there is no known support below this zone (the levels below are very old and we cannot anticipate how price will behave there). The Relative Strength Index and Stochastic are approaching oversold and this may call for bullish pullbacks.

Fundamental Outlook

Today’s highlight is the release of the FOMC Meeting Minutes, scheduled at 7:00 pm GMT. This document contains details about the latest Fed Meeting and may offer hints about future monetary policy (rate hikes more importantly); if this is the case, we will probably get a strong reaction from the greenback.

GBP/USD

The US Dollar scored a major victory against the Pound yesterday, taking the pair about 100 pips lower and reaching the support at 1.2200. British Manufacturing data was better than anticipated but this didn’t have a strong impact on price movement.

Technical Outlook

The support at 1.2200 is important for short term price action and we expect the pair to react to it by bouncing higher. A break of this level will open the door for a move into 1.2090, which is a key level, better seen on the Daily charts. The oscillators are still showing good downside momentum and this increases the chances of a break of 1.2200, while to the upside, 1.2250 is the first resistance.

Fundamental Outlook

At 9:30 am GMT the British Construction PMI is released and expected to show a value of 52.6 compared to the previous 52.8. This survey acts as a leading indicator of economic health focused on the construction sector but its impact is usually mild, with higher values strengthening the Pound.

[GDMFX]

FOREX NEWS: U.S. JOBS DATA IN THE FOCUS AS BEARISH PRESSURE MOUNTS

EUR/USD

Forex News: The pair bounced higher yesterday and moved above the 50 period Exponential Moving Average ahead of the FOMC Minutes release, which created some Dollar strength but nothing substantial. Overall the session belonged to the bulls but bearish pressure has increased.

Technical Outlook

The climb above the 50 period EMA and above the resistance at 1.0460 seems fragile and the risks of a drop have increased due to bearish pressure. If the buyers can keep the pair above these two elements, we expect price to test the level at 1.0525 but for now the picture is blurry and a clear direction is not in place. Because the pair is mostly ranging, look for direction changes at overbought/oversold levels or at support/resistance.

Fundamental Outlook

Today at 1:15 pm GMT we take a first look at the U.S. employment situation with the release of the ADP Non-Farm Employment Change. The indicator shows changes in the number of employed people, excluding government and the farming sector; usually the impact is lower than the Government data released Friday but nonetheless, higher numbers than the anticipated 171K (previous 216K) can strengthen the US Dollar.

GBP/USD

The level at 1.2200 offered good support and the pair bounced higher immediately after touching it. The US Dollar had a mixed reaction when the FOMC Minutes were released and now the pair is showing rejection around resistance.

Technical Outlook

After moving briefly above 1.2325 and above the 50 period Exponential Moving Average, the pair shows signs of rejection. Resistance is not yet broken, so if we will see today a move below the 50 EMA, it would mean that the bears are ready to take control again and this would make 1.2250 the next destination. To the upside the first target is 1.2385 if the pair moves above 1.2325 again.

Fundamental Outlook

The final British survey in this week’s series of three is released today at 9:30 am GMT: the Services Purchasing Managers’ Index. Just like the other two surveys, this one shows the level of optimism regarding business conditions as perceived by purchasing managers from the respective sector; values above the forecast 54.8 usually strengthen the Pound but the impact is medium most of the times.

[GDMFX]

FOREX NEWS: U.S. NON-FARM PAYROLLS: THE FIRST MAJOR RELEASE OF 2017

EUR/USD

Forex News: The pair had a mixed trading session yesterday, moving above and below the level at 1.0525, without a clear bias. The jobs data released yesterday by the United States came below expectations and this weakened the US Dollar to some extent.

Technical Outlook

The pair is still governed by indecision but the latest impulse is bullish and seems like price will be trading above the 50 period Exponential Moving Average for another day. The first important resistance is located around 1.0650 but it must be noted that the Stochastic has entered overbought and although this is not a short signal by itself, it’s something that may be of importance for future price action. Today’s technical aspect will be secondary to the fundamental and all eyes will be on the U.S. jobs data.

Fundamental Outlook

At 1:30 pm GMT the Non-Farm Payrolls will take centre stage and will influence the greenback heavily. This is considered the most important U.S. jobs data and almost always has a strong impact on the currency. The forecast is 175K (previous 178K) and higher numbers show that more jobs were created and that consumer spending and overall economic activity may increase in the near future; a higher number usually strengthens the US Dollar while a lower number weakens it.

GBP/USD

The US Dollar weakened yesterday and allowed the Pound to take the pair above resistance once again. The pair is also trading above the 50 period Exponential Moving Average and this makes our bias slightly bullish.

Technical Outlook

Yesterday the pair moved again below the 50 EMA and quickly bounced above it; this shows bearish weakness and suggests that we may see a move higher today. The first barrier and target is 1.2385 and if that level is taken out, we expect a move closer to 1.2480 during the days to come. Another quick move below the 50 EMA would make 1.2250 the first target.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements for today so the main focus will be on the U.S. Non-Farm Payrolls and on the technical aspect.

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

[GDMFX]

FOREX NEWS: US DOLLAR BOOSTED BY NFP REVISION, SUPPORT THREATENED

EUR/USD

Forex News: The U.S. Non-Farm Payrolls released Friday showed a lower number than analysts had expected but the previous value was revised higher and this boosted the US Dollar, creating a bearish move for the pair.

Technical Outlook

The current move down is likely to extend into the 50 period Exponential Moving Average, where a classic ‘bounce-or-break’ scenario will play out. If the pair goes through the Moving Average, it will show that the bullish run has come to an end and that we will see further downside during the days to come; on the other hand, a bounce will take the pair back into 1.0600 territory and would open the door for a continuation of the bullish impulse started last week.

Fundamental Outlook

At 9:30 am GMT the Sentix Investor Confidence survey comes out and it’s the day’s only notable indicator. The survey gauges the opinions of about 2,800 investors and analysts regarding a 6-month outlook for the Eurozone but usually has a low impact on the pair; nonetheless, higher numbers than the forecast 12.6 (previous 10.0) show optimism and can strengthen the Euro.

GBP/USD

The US Dollar erased Friday almost all of the losses incurred earlier during the week and took the pair below the 50 period Exponential Moving Average. A big role was played by the revision of the previous value of the U.S. NFP and now the US Dollar is showing increasing strength against its counterparts.

Technical Outlook

For today we expect a touch of the support at 1.2250 and a consequent bounce higher. After this possible bounce and as long as price is trading below the 50 EMA, we anticipate a break of 1.2250 and another test of 1.2200. However, a strong trend is not in place and given the lack of major news announcements today, we may get a ranging session, without clear direction.

Fundamental Outlook

The Pound will not be affected by major economic releases today, thus price direction will be mainly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: POUND WEAKENS SUBSTANTIALLY. IS EURO NEXT?

EUR/USD

Forex News: The pair had a slow trading session yesterday, with a timid climb in the afternoon after a near-touch of the 50 period Exponential Moving Average. Part of this behaviour was due to a lacklustre economic calendar.

Technical Outlook

Price is showing rejection around 1.0525 support and the 50 period EMA but the bullish momentum doesn’t seem strong and in fact price lacks a clear bias. For today keep an eye on 1.0610 as a potential upper target if the bounce gathers some momentum, while to the downside, 1.0460 will become a valid destination if the Moving Average and 1.0525 support are decisively broken.

Fundamental Outlook

At 3:00 pm GMT the only notable indicator of the day is released: the JOLTS Job Openings, a report that shows the number of job openings available in the U.S., excluding the farming industry. The forecast is 5.59 Million and usually numbers above it strengthen the US Dollar because they indicate that consumer spending is likely to increase in the near future. The indicator is considered medium-impact but it can generate some movement nonetheless.

GBP/USD

The US Dollar strengthened substantially against the Pound yesterday and this generated a sharp drop for the pair, which broke through 1.2200 support and renewed the downtrend.

Technical Outlook

Although the pair dropped yesterday and the bears are in control for the time being, the two oscillators have reached oversold levels, warning of a potential bounce up. The last couple of candles also show long tails and this is another reason to anticipate a bullish pullback. To the downside 1.2125 is the first barrier, followed by 1.2090, while to the upside first level of importance is located at 1.2200 and as long as the pair remains below it, our bias is bearish.

Fundamental Outlook

The Pound has a light economic calendar for almost the entire week and today is no exception, thus the pair’s movement will be mostly influenced by the U.S. release and by the technical aspect.

[GDMFX]

FOREX NEWS: US DOLLAR STRENGTH FADES, BRITISH MANUFACTURING PRODUCTION EYED FOR NEXT CABLE DIRECTION

EUR/USD

Forex News: The pair showed mixed movement yesterday and a clear direction was not established. This behaviour can be partly attributed to the lack of economic indicators and an overall stale fundamental

Technical Outlook

Price climbed above 1.0610, created a new short-term high and then soon dropped below resistance. This shows lack of interest and strength from the part of the buyers and makes us anticipate a drop that will probably touch the 50 period Exponential Moving Average and the support at 1.0525. However, the pair is still making higher highs and this means that a continuation of the medium-term uptrend is not out of the question; a quick move above 1.0610 would open the door for 1.0650 and later 1.0710.

Fundamental Outlook

We have another lacklustre day ahead, with no major indicators for either the Euro or the US Dollar, thus the technical side will prevail once again.

GBP/USD

Yesterday the pair remained in indecision mode and a drop below 1.2125 was quickly reversed as the US Dollar lost steam; for now the pair is stuck in a range, without a clear bias.

Technical Outlook

From a short term perspective the Pound-Dollar is ranging and this will remain the ‘status quo’ until we see a clear break 1.2125 support or 1.2200 resistance. Rejection is clearly seen around 1.2125 and the oscillators are oversold, facts that make us anticipate a move up in the form of a bullish retracement; a good place for this retracement to end and downside movement to resume is 1.2200 but a quick move below 1.2125 would delay this retracement until 1.2090 is reached.

Fundamental Outlook

The British Manufacturing Production numbers will be today’s highlight and also a potential market mover. The indicator measures the change in the value of total goods produced by the manufacturing sector, with higher numbers showing increased economic activity and possibly a stronger Pound. The scheduled time is 9:30 am GMT and the expected change is 0.6% (previous -0.9%).

[GDMFX]

FOREX NEWS: US DOLLAR RECOVERS BUT REMAINS ON SHAKY GROUND

EUR/USD

Forex News: The US Dollar strengthened yesterday ahead of the press conference of U.S. President-Elect Donald Trump which will take place later into the session. However, the next move is uncertain and depends a lot on the things that will be said by the President-Elect.

Technical Outlook

The pair broke the 50 period Exponential Moving Average on a four hour chart and touched 1.0460; if this barrier also breaks, we expect another test of 1.0366 but at the time of writing, President-Elect Trump did not speak yet and this will be a major factor that will influence the US Dollar throughout the days to come. A sudden move above 1.0525 and the 50 period EMA will make the picture bullish again, opening the door for a break of 1.0610 and 1.0650.

Fundamental Outlook

Today at 1:30 pm GMT the U.S. Unemployment Claims are released, showing the number of persons who asked for unemployment related help during the previous week. The indicator usually doesn’t have a strong impact on the currency but higher numbers show that more people are unemployed in the United States and this means that consumer spending is likely to decrease. The forecast for today is 266K while the previous number was 235K.

GBP/USD

The pair broke yesterday the key support at 1.2090 after an encounter with 1.2200 and an almost perfect bounce off of it. The downtrend has a new low and the bears are in control of short term movement.

Technical Outlook

The resistance at 1.2200 proved to be a great place for downtrend resumption and now the key support at 1.2090 is broken, making the picture bearish once again, after a brief period of ranging movement. The pair is in ‘uncharted’ territory and the last known low is 1.1062, reached on the 6th of October 2016. This level may or may not turn into support but of course it is too far to be of any importance for short and medium term movement. We expect today’s price direction to be influenced by the aftermath of Trump’s speech and we recommend caution.

Fundamental Outlook

Today is another lacklustre day for Pound’s economic calendar, but the pair’s direction will be heavily affected by the US Dollar and how it responds to President-Elect Trump’s attitude.

[GDMFX]

FOREX NEWS: RESISTANCE LEVELS SHATTERED AHEAD OF CLUSTER OF U.S. ECONOMIC RELEASES

EUR/USD

Forex News: The US Dollar reacted negatively to President-Elect Trump’s speech delivered yesterday and this allowed the Euro to take the pair through several resistance levels, making the bias bullish again.

Technical Outlook

The level at 1.0460 offered great support yesterday and reversed an earlier drop; after the bounce, the pair is trading above 1.0650 resistance and way above the 50 period Exponential Moving Average. This makes our bias bullish for the day, anticipating a touch and possibly a break of 1.0710; however, a retracement lower may be in order before price can move higher. Today is the busiest day of the week in terms of economic releases and this will play a major part in the pair’s behaviour.

Fundamental Outlook

At 1:30 pm GMT the U.S. Retail Sales numbers come out, showing the change in the total value of sales made through retail outlets. This type of sales represents a major part of the entire consumer spending which in turn accounts for about two thirds of the entire economic activity, so today’s release has the potential to strongly affect the US Dollar. Numbers above the forecast 0.5% (previous 0.1%) usually strengthen the currency.

At the same time the U.S. Producer Price Index is released, showing changes in the price that producers charge for their goods; the indicator has inflationary implications because any change in the price charged by the producer will be eventually reflected in the price paid by the consumer. Values above the forecast 0.1% are usually beneficial to the greenback.

The final release of the day is the University of Michigan Consumer Sentiment survey, scheduled at 3:00 pm GMT. It acts as a leading indicator of consumer spending and usually strengthens the US Dollar if it posts numbers above the forecast, which for today is 98.6.

GBP/USD

The bearish momentum was reversed yesterday by a strong bullish candle and the pair continued to move to the upside for almost 300 pips. Most of this US Dollar weakness was generated by Trump’s speech.

Technical Outlook

The pair printed a new low at 1.2037 but now it has moved above the 50 period Exponential Moving Average and broke through several resistance levels. The bullish bias is likely to continue but before that, we expect a retracement that will possibly test the 50 period EMA and the level at 1.2250 that may turn into support. To the upside the first target is 1.2325 and we expect it to be reached today if the pair remains above the Moving Average.

Fundamental Outlook

The United Kingdom didn’t schedule major economic news announcements for today, thus the technical aspect will prevail and the pair will be also influenced by the U.S. releases mentioned above.

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

[GDMFX]

FOREX NEWS: PRICE STRUGGLES FOR DIRECTION. MORE CHOPPINESS TO FOLLOW?

EUR/USD

Forex News: Friday the US Dollar was boosted by better than expected numbers for the U.S. Producer Price Index and Retail Sales, so the pair briefly dipped below 1.0610 but it wasn’t enough for a break and the bulls took price it back up into resistance by the end of the day.

Technical Outlook

Friday’s price action shows that the pair is confined between 1.0610 support and 1.0650 resistance, without a clear bias and we don’t expect today to be much different. However, a break of 1.0650 will open the door for 1.0700 zone, while a break of 1.0610 will probably generate a touch of the 50 period Exponential Moving Average. The Relative Strength Index is almost flat and the Stochastic is slightly turned to the downside but these are not clear indications of future direction and our view is neutral until a clear breakout is seen.

Fundamental Outlook

Today U.S. banks will be closed due to Martin Luther King Day and no economic data will be released. The European Union didn’t schedule important economic news announcements either, thus price action will be mainly driven by the technical aspect.

GBP/USD

Friday’s trading session was very choppy and price bounced all over, without a clear direction. The US Dollar benefited from positive economic data but the gains were quickly erased and choppiness continued.

Technical Outlook

Price tried twice to move above the 50 period Exponential Moving Average and both times it was rejected lower immediately; the same happened when the pair touched 1.2125 support, so now neither side is in control. Our view remains neutral until a clear break occurs but it is likely to get another ranging session due to the lack of economic announcements and the fact that U.S. banks are closed today.

Fundamental Outlook

Similar to the US Dollar and the Euro, the Pound has a lacklustre day, without major economic data on the economic calendar; price action and volatility may be affected by this and we may see a choppy session.

[GDMFX]

FOREX NEWS: BREXIT FEARS TAKE CENTRE STAGE AGAIN AS U.K. PRIME MINISTER MAY SPEAKS IN LONDON

EUR/USD

Forex News: U.S. banks were closed yesterday and the European Union didn’t release any important economic data and this resulted in a rather slow session, without major developments. The pair is now trading in close vicinity to the 50 period EMA.

Technical Outlook

The pair has approached the 50 period Exponential Moving Average and is now showing small signs of rejection higher. The picture remains still mixed and control doesn’t clearly belong to either side, so we are likely dealing with a ‘bounce or break’ scenario: a bounce will put the bulls in short term control and will open the door for a break of 1.0650, while a move below the 50 EMA will make 1.0525 the first destination.

Fundamental Outlook

Today the World Economic (WEF) Annual Meetings start in Davos and will be attended by political and financial personalities from more than 90 countries. The Meetings will continue throughout the week and are likely to generate increased volatility.

The Euro will be directly affected at 10:00 am GMT by the release of the German ZEW Economic Sentiment, a survey of about 275 German professional analysts and investors that tries to gauge their opinion about a 6 month economic outlook for the German economy. The expected number is 18.9 and usually higher values show optimism and strengthen the Euro.

GBP/USD

The week opened with a gap lower, mostly due to increased fears regarding a “hard” Brexit. We now have a new important low, at 1.0986.

Technical Outlook

More often than not, weekly gaps are closed, meaning that price will retrace to where the gap originated. If that will be the case this time, we will see a climb back into 1.2200 area, but on the other hand, if 1.2090 turns into resistance, then the pair will probably test 1.2000 zone again. Keep in mind that even if the gap is closed, the time span of the move cannot be anticipated, meaning that several days (or even weeks) may pass until the target is reached.

Fundamental Outlook

United Kingdom Prime Minister Theresa May will speak today about her Brexit approach but at the time of writing the exact time of the event is not known. However, be extra careful throughout the day because this speech is likely to trigger very strong movement for the Pound. Also, the WEF Meetings will increase the chances of high volatility.

[GDMFX]

FOREX NEWS: BRITISH PRIME MINISTER MAY ADOPTS A HAWKISH STANCE. THE POUND DOWNTREND MAY COME TO AN END

EUR/USD

Forex News: The German ZEW survey posted a lower figure than anticipated but still higher than the previous and this, combined with a hawkish speech delivered by British Prime Minister May, generated a climb into 1.0700 zone.

Technical Outlook

The 50 period Exponential Moving Average offered good support and pushed price through 1.0650 and into 1.0710, which the pair is now struggling to break. If this resistance is surpassed, price will be heading towards the more important 1.0800 but the Relative Strength Index is rapidly approaching overbought, so a bearish pullback may be next. For the time being the pair is in an uptrend and should be treated as such until a significant low is created.

Fundamental Outlook

Today’s highlight is the release of the U.S. Consumer Price Index, scheduled at 1:30 pm GMT and expected to show a 0.3% change. This is the main gauge of inflation in the United States and usually has a hefty impact on the currency, with higher values strengthening it. Keep in mind that the WEF Meetings continue in Davos and this may be another reason for increased volatility.

GBP/USD

Yesterday the Pound got a tremendous boost from Prime Minister May’s hawkish speech regarding the Brexit and the pair shot through several resistance levels, traveling more than 350 pips to the upside.

Technical Outlook

Price started to move to the upside and closed the weekly gap even before Prime Minister’s speech but the biggest part of the move was completed during her speech. It is clear that the pair travelled a long distance in a very short amount of time and this usually calls for a pullback to the opposite side. We expect a retrace, possibly back into 1.2325 but overall our bias is bullish considering the latest developments.

Fundamental Outlook

The main release of the day for the Pound will be the British Claimant Count Change, an indicator that tracks changes in the total number of people who asked for benefits due to their unemployed condition. The time of the release is 9:30 am GMT, with a forecast of 4.6K (previous 2.4K); a larger number of unemployed people suggests that consumer spending may decrease in the near future and this usually weakens the currency.

[GDMFX]

FOREX NEWS: EURO STEALS THE SPOTLIGHT, PREPARING FOR ECB PRESS CONFERENCE. POUND STILL VOLATILE

EUR/USD

Forex News: The U.S. Consumer Price Index released yesterday matched analysts’ expectations and the event did not generate a strong impact; however, the pair retraced lower but speed of movement slowed down considerably.

Technical Outlook

The resistance at 1.0710 rejected price lower but the bearish move failed before 1.0650 could be broken. This level can be considered support now, because price was rejected from its close vicinity and overall the picture remains bullish, so if support holds, we expect a break of 1.0710 but a lot will depend today on the ECB decision regarding interest rates and on ECB President’s press conference. The technical aspect will be overshadowed by the fundamental and caution is recommended.

Fundamental Outlook

As mentioned above, today the ECB will release their interest rate decision; the event is scheduled at 12:45 pm GMT and although no change is expected (currently 0.00%), volatility is likely to increase. Forty-five minutes later, at 1:30 pm GMT, ECB President Mario Draghi will hold his usual press conference, discussing the reasons behind the rate decision and answering journalists’ questions. This second part is known to generate strong and possibly erratic movement, depending on his answers and attitude, but a prediction cannot be made so, as always, use caution or wait until the conference is over.

GBP/USD

The Pound retraced lower yesterday, as it was anticipated after the strong climb seen a day before, but it’s still trading above the 50 period Exponential Moving Average and the bias is still bullish.

Technical Outlook

On an Hourly chart the pair is approaching the 50 period EMA and this, combined with the vicinity of the potential support at 1.2250, will probably generate another push higher. The first upper barrier is 1.2325, followed by 1.2385; the latter was breached twice but price soon returned below it, so we still consider this zone resistance. As an alternate scenario, we may see an extended move lower, into the four-hour 50 EMA but as long as price is trading above it, our bias remains bullish.

Fundamental Outlook

There are no major releases scheduled for the Pound but any Brexit-related talks or new developments may generate strong movement, so at the moment the pair is considered high-risk.

[GDMFX]

FOREX NEWS: BUCKLE UP FOR A US DOLLAR STORM: PRESIDENT-ELECT TRUMP DELIVERS INAUGURATION SPEECH

EUR/USD

Forex News: Yesterday the Euro weakened during Mario Draghi’s Q&A section of the press conference and the pair has now dropped below the 50 period Exponential Moving Average and below horizontal support.

Technical Outlook

If the bears can keep the pair below the Moving Average and below 1.0610 support, the uptrend may be coming to an end and the first target will become the support at 1.0525. For the time being the current support zone is not clearly broken because price did not re-test it from below; such a possible re-test may happen on the lower time frames and it would still be valid but until that happens, we do not consider the break a true one. The oscillators are moving to the downside, with good momentum and this increases the chances of an extended move south.

Fundamental Outlook

Today U.S. President-Elect Trump will deliver his Presidential Inauguration speech in Washington DC. Some sources have 2:00 pm GMT as the scheduled time, while others have not yet posted the exact time but what is almost certain is that his speech will generate a lot of volatility for the US Dollar. Use extra caution during the event.

GBP/USD

The pair showed bullish price action yesterday, bouncing at support but failing to break resistance. Overall we had a normal trading session, without major developments.

Technical Outlook

The perfect bounce at 1.2250 shows that the bulls still have what it takes to continue the strong impulse started earlier this week but 1.2325 resistance is still holding for now. Once this level is broken, we expect another test of 1.2385 zone, otherwise the pair will probably move back down into 1.2250 and into the 50 period Exponential Moving Average. The fundamental aspect will play a major role for today’s direction.

Fundamental Outlook

At 9:30 am GMT the British Retail Sales numbers are released, showing changes in the total value of sales made through retail outlets. The indicator is considered a high-impact one and usually a higher number than the anticipated -0.1%, generates Pound strength. Later in the day, the pair will be directly affected by President-Elect Trump’s inauguration speech.

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

[GDMFX]

FOREX NEWS: US DOLLAR WEAKENS, PAIRS TEST RESISTANCE LEVELS

EUR/USD

Forex News: Surprisingly, President Trump’s inauguration speech delivered Friday did not create the strong volatility we anticipated but it weakened the US Dollar nonetheless and allowed the pair to reach resistance.

Technical Outlook

Price bounced at the 50 period Exponential Moving Average and is now facing a strong barrier to the upside, represented by the level at 1.0710. If this barrier can be surpassed today, the next target will become 1.0800 but we don’t expect it to be reached during the course of one day. On the other hand, if the bulls cannot break resistance, the pair will probably drop back into the 50 period EMA or it will start to move sideways, in a tight range.

Fundamental Outlook

The economic calendar doesn’t hold any important releases and this may generate slow, ranging price action, with the technical aspect being the most important.

GBP/USD

Friday’s movement was controlled by the bulls and the main market mover was President Trump’s speech but the Pound was already strong as seen earlier in the week.

Technical Outlook

The level at 1.2250 acted as strong support and rejected price higher twice during last week but also a strong level is 1.2385. The latest impulse is bullish so we expect a break of the mentioned resistance; if this happens, the next move will probably reach the resistance at 1.2480 but this will probably take more than a day and price will also retrace before reaching that target. A bounce lower from the current price will take the pair into 1.2325 and possibly into the 50 EMA.

Fundamental Outlook

The United Kingdom also has a lacklustre economic calendar for today so we don’t expect major developments or substantial moves.

[GDMFX]

FOREX NEWS: UK’S HIGH COURT DUE TO ANNOUNCE BREXIT-RELATED RULING

EUR/USD

Forex News: The pair continued the bullish impulse started Friday and moved above the resistance at 1.0710. The fundamental environment was lacklustre and didn’t have a major role to play in yesterday’s price action.

Technical Outlook

After moving above 1.0710 resistance, the pair returned lower to re-test the level; if this previous resistance can turn into support, we will probably see a move higher, possibly into 1.0800 in the short to medium term (today or tomorrow). On the other hand, a quick drop below 1.0710 would show that the break was false and that the uptrend may be coming to an end soon. This would also make 1.0650 the first bearish target and would take price in close vicinity to the 50 period Exponential Moving Average.

Fundamental Outlook

At 8:30 am GMT we take a look at the health of the German Manufacturing and Services sectors with the release of the respective Purchasing Managers’ Indexes. Usually the indicators don’t have a huge impact but higher values show optimism among purchasing managers and strengthen the Euro; the Manufacturing PMI is expected to show 55.5 and the Services PMI, 54.6.

GBP/USD

The Pound strengthened for the most part of yesterday’s trading session and the pair climbed to touch resistance. Overall price action was bullish but price stalled at resistance.

Technical Outlook

The pair is now facing an important resistance at 1.2480, with the Stochastic and Relative Strength Index approaching overbought levels. This increases the chance of a retracement lower but the bulls have been strong lately, so a move past the mentioned resistance will take the pair into 1.2550. To the downside the first support and target is represented by 1.2385; if the pair reaches that level, we expect it to bounce higher.

Fundamental Outlook

At 9:30 am GMT the United Kingdom High Court will decide if the Government can trigger Article 50 of the Lisbon Treaty without the approval of the Parliament. The article would initiate the Brexit and this would probably have a very high impact on the Pound. Whatever the High Court decides, the Pound will probably move erratically at the time so we recommend caution.

[GDMFX]

FOREX NEWS: UPTREND CONTINUES, US DOLLAR STILL SHAKY AGAINST COUNTERPARTS

EUR/USD

Forex News: The pair had a choppy session yesterday but the bias remained bullish although the economic data was mixed, showing a higher value for the German Manufacturing PMI and a lower value for the Services sector.

Technical Outlook

Price remained above the resistance turned support at 1.0710 and seems headed towards the next resistance at 1.0800. However, some bearish signs have already appeared: the candles show long wicks and the Stochastic is trading above its 80 level, showing an overbought condition. As long as the pair is trading above the 50 period Exponential Moving Average, our bias remains bullish but a retracement is needed and it’s very possible to happen today.

Fundamental Outlook

Today’s highlight is the release of the German IFO Business Climate, a survey of about 7,000 businesses, which tries to gauge the respondents’ opinions regarding economic conditions and expectations for the next 6 months. A higher number than the forecast suggests optimism and usually strengthens the Euro. The time of release is 9:00 am GMT and the anticipated value is 111.3.

GBP/USD

United Kingdom’s High Court ruled yesterday that the Government must seek the Parliament’s approval before triggering Article 50. This initially created Pound strength, followed by weakness but overall movement was irregular and without a clear bias.

Technical Outlook

After a very close encounter with 1.2550 resistance the pair dropped below 1.2480 and now the candles show long wicks, which is a sign of indecision. If the bears can keep price below 1.2480, we are likely to see a touch of the potential support at 1.2385 and possibly of the 50 period EMA; otherwise, if price moves quickly above 1.2480, the bulls will remain in control and we will see another test of 1.2550.

Fundamental Outlook

The Pound’s economic calendar is light today, without any major releases, thus price direction will be mainly affected by the technical aspect.

[GDMFX]

FOREX NEWS: TODAY’S MARKET MOVERS: U.S NEW HOME SALES, BRITISH GDP

EUR/USD

Forex News: The pair had a mixed trading session yesterday and no significant advances were made by either side. The support at 1.0710 was tested again and once more it rejected price higher.

Technical Outlook

After the re-test of 1.0710 support, the pair moved up into the short term resistance created around 1.0770 but there the bullish impulse faded and some of the earlier gains were erased. This is very likely to be the start of a ranging period, with price confined between 1.0800 and 1.0710 because the uptrend seems to slow down but on the other hand, the bears cannot break immediate support. However, as long as price is trading above the 50 EMA, the bias is bullish.

Fundamental Outlook

The U.S. New Home Sales will be released today at 3:00 pm GMT and expected to show an annualized number of 585K. The indicator acts as a gauge of health for the U.S. house market but the impact is usually medium-to-low; however, under normal circumstances, numbers above expectations strengthen the US Dollar and take the pair lower.

GBP/USD

The Pound continued to strengthen yesterday and now the pair is trading above 1.2250 but the oscillators are starting to show overbought so a retracement might follow.

Technical Outlook

The resistance at 1.2550 was the last barrier before the key level at 1.2725 and now the US Dollar lacks the strength to regain control. The next medium term target is the resistance level we just mentioned but until price gets there, it will probably retrace lower; in the short term we expect a pullback to 1.2550, followed by another rally. The Relative Strength Index is approaching its overbought level, increasing the chance of a pullback.

Fundamental Outlook

The British Preliminary Gross Domestic Product is today’s highlight for the Pound. The GDP is considered the main gauge of economic performance and this version is the most important out of the three (Preliminary, Second Estimate and Final); the time of the release is 9:30 am GMT and the anticipated change is 0.5% compared to the previous 0.6%. A higher value shows increased economic activity and usually strengthens the currency.

[GDMFX]

FOREX NEWS: PULLBACKS IN AN UPTREND. A GOOD OPPORTUNITY TO BUY?

EUR/USD

Forex News: Yesterday’s trading session belonged to the bears and the uptrend is now going through a retracement that brought the pair below the 50 period Exponential Moving Average.

Technical Outlook

After several failed attempts to move above 1.0770, the pair dropped through 1.0710 support and through the 50 period EMA, putting the short term control in favour of the bears. The next target is the support at 1.0650 but it must be noted that a significant low was not yet formed so the pair is still in an uptrend. If today price will return above the 50 EMA, we will probably see uptrend resumption with 1.0770 as first destination.

Fundamental Outlook

The US Dollar will be affected today by two important indicators: the first is the Advance Gross Domestic Product, which is considered the economy’s main performance gauge and the second is the Durable Goods Orders, an indicator that shows changes in the value of purchase orders for goods with a life expectancy of at least 3 years. Both indicators are released at 1:30 pm GMT and values above forecast usually strengthen the currency. The GDP is expected to show a 2.1% change while the Durable Goods Orders have a forecast of 2.7% change.

GBP/USD

Although the pair is in a clear uptrend, yesterday it showed a bearish day, retracing lower to the last level of importance. This was a much needed “breather” and overall the bulls remain in control.

Technical Outlook

The current move down should be considered a retracement in an uptrend and not a reversal, meaning that probably the bulls will step back in and take price higher again. The level at 1.2550 acts as support and is already showing signs of rejecting price higher; the first bullish target is the resistance located at 1.2675, created yesterday. If the current move south continues, we don’t expect it to extend below 1.2480 and the 50 period EMA.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for today, so the pair will be affected by the U.S. events mentioned earlier and by the technical aspect.