FOREX NEWS: RESISTANCE HOLDS, US DOLLAR PUSHES BOTH PAIRS LOWER
EUR/USD
Forex News: German PMI surveys released Friday showed better readings than analysts had expected and on the other hand the US Dollar remained mostly unaffected by the Durable Goods Orders. All this generated another bullish session, with the pair testing resistance.
Technical Outlook
The resistance at 1.0800 was again breached but the bulls couldn’t push price higher, which is a sign of weakness and an early indication that we will probably see a touch of the 50 period Exponential Moving Average today. As an alternate scenario, a continuation of the bullish move will probably extend into 1.0830, possibly 1.0850 but we don’t expect the upper resistance to be broken.
Fundamental Outlook
At 8:00 am GMT the German IFO Business Climate survey comes out, showing the opinions of about 7,000 German businesses regarding current economic conditions as well as a 6-month outlook. The expected figure is 111.2 and usually the Euro is positively impacted by numbers that exceed the forecast.
GBP/USD
For the most part of Friday’s trading session the pair moved sideways after establishing resistance at 1.2530. The overall bias remains bullish but the current move looks like the beginning of a deeper retracement.
Technical Outlook
If the bears manage to break 1.2480 and re-test it from below, thus establishing the level as resistance, then the next target will become the 50 period Exponential Moving Average, which will probably climb above 1.2420 by the time price descends to touch it. It must be noted however that the pair is in a clear uptrend from a medium term perspective and this means that once the 50 EMA is touched, we may see rejection and a potential move up.
Fundamental Outlook
The Pound will not be affected by any important economic releases today, so the technical aspect will be the main market mover.
FOREX NEWS: US DOLLAR ON THE ROPES AGAIN, PULLBACKS STILL A NECESSITY
EUR/USD
Forex News: The US Dollar was battered into a corner during yesterday’s trading session, following healthcare discussions in the U.S. over the weekend. The Euro benefited from a higher reading for the German IFO survey and all this took the pair significantly higher.
Technical Outlook
The week opened with a gap and the pair shot through 1.0830 and 1.0850 resistances, so the expected retracement lower didn’t occur. The move was mostly generated by fundamental (political) reasons and now a pullback is even more likely, considering that the Relative Strength Index and the Stochastic are in deep overbought territory and the pair travelled a long distance without retracement. It must also be noted that weekly gaps are usually closed – meaning that price will return to the place where the gap originated – but the timeframe for this potential move is not known.
Fundamental Outlook
At 2:00 pm GMT the Conference Board Inc. will release the U.S. Consumer Confidence, a survey of about 5,000 households, focused on their opinion regarding economic conditions. If consumers show confidence in their financial situation, they are likely to spend more, thus boosting consumer spending which represents an important part of overall economic activity. The expected value for today is 113.9 and higher values usually strengthen the US Dollar.
GBP/USD
US Dollar weakness was seen against most of its counterparts and the Pound was no exception, thus the pair climbed strongly yesterday, for almost the entire trading session.
Technical Outlook
After establishing 1.2480 as support the pair rallied and broke through 1.2550, marking an important victory for the bulls. However, even before this last climb, price was in need of a retracement and now the chance for a move lower has increased, considering how much it moved to the upside but also the overbought condition of the Relative Strength Index. These factors make us believe that today we will see a pullback that will have 1.2550 as target. To the upside the first level of importance is located at 1.2675 but we don’t believe it will be touched before a move down occurs.
Fundamental Outlook
The United Kingdom didn’t schedule major economic releases for today, so the U.S. Confidence survey and the technical aspect will be the main market movers.
FOREX NEWS: RETRACEMENTS UNDERWAY, SUPPORT TARGETED
EUR/USD
Forex News: The U.S. Consumer Confidence survey released yesterday showed a reading of 125.6, above analysts’ expectation of just 113.9 but surprisingly the release didn’t create strong movement and the pair drifted sideways almost the entire day.
Technical Outlook
The pair created minor resistance at 1.0905 and is now testing 1.0850 from above, trying to establish it as support. If the level will become support, pushing price higher, we expect to see another encounter with 1.0905 zone but it must be noted that the weekly gap is still open and the pair is still in need of a deeper retracement. The uptrend is still strong but our bias is bearish for today, anticipating a move below 1.0850.
Fundamental Outlook
The U.S. Pending Home Sales are today’s only notable release, scheduled at 2:00 pm GMT and expected to show a change of 2.3%. The indicator shows changes in the total number of houses under contract to be sold and usually has a low-to-medium impact on the US Dollar, with higher numbers strengthening it.
GBP/USD
Yesterday’s trading session belonged to the bears and the pair dropped below 1.2550, partly helped by a better than expected U.S. Consumer Confidence survey that strengthened the US Dollar and took price below the previous resistance.
Technical Outlook
Yesterday the pair printed a lower high and broke below 1.2550, which was prior resistance. This type of behaviour shows that a deeper retracement is underway and makes 1.2480 the first target, followed by the 50 period Exponential Moving Average. If the pair reaches these targets, we expect it to climb again, considering that a clear uptrend is still in place.
Fundamental Outlook
At 8:30 am GMT the Bank of England will release the Net Lending to Individuals, a report that shows changes in the total credit issued to consumers. A higher value shows that consumer spending is likely to increase in the future and usually this strengthens the Pound but the indicator is known to have just a medium impact. The forecast for today is 4.9 Billion, compared to the previous 4.8 Billion.
FOREX NEWS: PAIRS UNDER HEAVY SELLING PRESSURE AHEAD OF GERMAN INFLATION DATA AND UNITED STATES GDP
EUR/USD
Forex News: The U.S. Pending Home Sales released yesterday showed a solid reading, increasing by 5.5% (forecast 2.3%) but the US Dollar started to strengthen even before the release, breaking several support levels as well as the 50 EMA.
Technical Outlook
For quite a while we expected a move lower, due to the overbought position of the two oscillators but also because weekly gaps tend to be closed (price returns to where the gap originated). Now the gap is closed and the retracement complete but considering that the 50 period Exponential Moving Average was broken decisively, we may see this pullback turn into a full scale reversal. If the pair cannot climb above the 50 EMA and if the line turns into resistance, we may see a drop into 1.0700 zone, otherwise uptrend resumption is underway.
Fundamental Outlook
At 12:00 pm GMT the Euro will be affected by the release of the German Preliminary Consumer Price Index, which is the main gauge of inflation in Germany and accounts for a big part of overall European inflation. The expected change is 0.4% and readings above forecast usually generate Euro strength.
On the US Dollar side we have the U.S. Final Gross Domestic Product, an indicator that shows changes in the value of goods and services produced by an economy and acts as the main gauge of economic health. The expected change is 2.0% and higher numbers are beneficial to the greenback.
GBP/USD
The sellers stepped back in, taking the pair below the 50 period Exponential Moving Average and both oscillators moved out of the overbought territory where they previously spent a long time. The pair is now showing signs of recovery but signals are mixed.
Technical Outlook
After breaking the 50 EMA, price touched the support at 1.2385 and bounced higher, into the resistance at 1.2480. These levels will be important for short to medium term movement because rejection is visible at both of them, so we may get a trading session with price trapped between them. If 1.2385 will be broken to the downside, we can consider the move a reversal of the uptrend and we can expect to see lower prices in the medium term.
Fundamental Outlook
The Pound will not be affected by major economic releases today, thus the technical aspect and the U.S. GDP will be the main drivers behind price action.
FOREX NEWS: US DOLLAR SHOWS MIXED SIGNALS FOR THE LAST TRADING DAY OF THE WEEK
EUR/USD
Forex News: The US Dollar had another strong day against the Euro, fuelled by a better than expected GDP, while the single currency took a blow from thin German inflation data, so the pair moved closer to support.
Technical Outlook
Price remained below the 50 period Exponential Moving Average and below 1.0775, showing that we may be dealing with a reversal, not a simple retracement. For today we expect an encounter with 1.0710 support but it must be noted that now both the Relative Strength Index and Stochastic have become oversold, signalling that a bounce at support may happen. Also, the pair has been in an uptrend from the beginning of the month and this increases the chance or another move up.
Fundamental Outlook
Today at 9:00 am GMT we take a look at European inflation with the release of the Consumer Price Index. Because the German CPI, which accounts for a big part of overall EU inflation, was released yesterday, the impact of today’s announcement may be somewhat muted but either way, numbers above the forecast 1.8% usually generate Euro strength.
GBP/USD
The Pound rallied yesterday, taking the pair above the 50 period Exponential Moving Average and above 1.2480 resistance, thus marking the end of the bearish retracement.
Technical Outlook
The bounce at 1.2385 followed by the bullish break of the 50 EMA shows that the Pound is not ready to give up control just yet and makes 1.2550 the first target for today. It is very possible to see a re-test of 1.2480 from above and if the pair bounces higher from there, it means that the level is now support, a thing that will increase the possibility of a break through 1.2550.
Fundamental Outlook
At 8:30 am GMT the Pound will be affected by two important releases: the Final version of the Gross Domestic Product (expected value 0.7%) and the Current Account (expected value -16.3 Billion). The first indicator is the main gauge of economic performance and the second measures the difference between imported and exported goods and services. Higher numbers for one or both indicators usually strengthen the Pound, taking the pair higher.
We hope you had a profitable trading week and we wish you a relaxing weekend.
FOREX NEWS: MANUFACTURING DATA HOLDS TODAY’S HEADLINES
EUR/USD
Forex News: Eurozone’s main gauge of inflation released Friday showed a disappointing change of 1.5% (expected 1.8%) and this allowed the US Dollar to drag the pair below support, for yet another bearish session.
Technical Outlook
The support at 1.0680 is now broken but both the Stochastic and Relative Strength Index are clearly oversold and the pair travelled a long distance without pullback. This indicates that a move up will soon follow, possibly after 1.0630 is touched but as long as the pair remains below the 50 period Exponential Moving Average, our bias is bearish and we expect another drop after the mentioned retracement.
Fundamental Outlook
At 2:00 pm GMT the United States will release the Manufacturing PMI, a survey of purchasing managers from the manufacturing sector, focused on the economic health of said sector. Usually, a higher reading than forecast shows optimism and strengthens the US Dollar but the impact is low-to-medium; today’s forecast is 57.2 while the previous value was 57.7.
GBP/USD
The Pound was boosted Friday by a better than expected Current Account value and this was partly the reason why the pair moved higher throughout the session.
Technical Outlook
After failing to break the 50 period Exponential Moving Average, the pair shot up and reached the resistance located at 1.2550, leaving us with a classic ‘bounce-or-break’ scenario. A break of this level would increase the chance of a move into 1.2615 (probably this target will not be reached in one day), while a bounce lower would mean that the pair is headed for the 50 EMA again. The PMI surveys released today for the Pound and US Dollar will play an important role for the outcome of the mentioned scenario.
Fundamental Outlook
The only notable release for the Pound is the British Manufacturing PMI, which as mentioned above, is a survey of purchasing managers, focused on economic and business conditions in the manufacturing sector. The release is scheduled at 8:30 am GMT and the forecast is 55.1, a small increase from the previous 54.6.
FOREX NEWS: PAIRS TRAPPED BETWEEN SUPPORT AND RESISTANCE. BREAKOUTS IN THE MAKING
EUR/USD
Forex News: The pair had a lacklustre and ranging day, without any special developments to either side. The U.S. Manufacturing PMI matched analysts’ forecast and this contributed to the stalemate seen yesterday.
Technical Outlook
Yesterday’s price action confirmed 1.0680 as short term resistance but the Relative Strength Index and Stochastic are starting to climb out of oversold territory and this increases the chance of a move up, towards the 50 period Exponential Moving Average. If the pair breaks 1.0680 but stops at 1.0710, we expect a drop into 1.0630, otherwise we will probably see a stronger move north.
Fundamental Outlook
There are no important releases on the Euro and US Dollar economic calendar so the deciding factor for price direction will be the technical aspect.
GBP/USD
The British Manufacturing data released yesterday showed a disappointing reading of just 54.2 (expected 55.1) and this was one of the reasons why the Pound weakened, allowing the bears to take the pair into support.
Technical Outlook
The bulls encountered heavy resistance at 1.2550, which is a level that continues to be of importance for short and medium term movement. However, the pair is having trouble breaking through the confluence zone created by 1.2480 and the 50 period Exponential Moving Average, so we may be facing the start of a ranging period, with price trapped between 1.2550 and 1.2480. A strong break of either one of these levels will probably decide the next direction but until that happens, our view is neutral.
Fundamental Outlook
The British Construction PMI is released today at 8:30 am GMT and may be a catalyst for a break of one of the levels mentioned earlier. This survey is derived from the opinions of purchasing managers from the construction sector and shows their optimism regarding business conditions in said sector; the expected figure is 52.5, same as previous and usually a higher number strengthens the Pound.
FOREX NEWS: BIG DAY FOR THE US DOLLAR: EMPLOYMENT DATA AND FOMC MEETING MINUTES
EUR/USD
Forex News: The Euro-Dollar had another slow day, mostly because neither currency was affected by major news releases. Price drifted lower, approaching support but movement was choppy and without clear energy.
Technical Outlook
The bearish momentum has slowed down considerably and it appears like the support at 1.0630 will not be broken before a retracement to the upside occurs. The first resistance is located at 1.0680, followed by 1.0710 and the 50 period Exponential Moving Average but a break of these levels will depend on the fundamental side which will steal the spotlight today and will heavily influence price direction.
Fundamental Outlook
At 12:15 pm GMT we take a first look at United States jobs data with the release of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the Government and the farming sector. The indicator is less important than the Non-Farm Payrolls that will be released later in the week, but a higher number of employed people will strengthen the US Dollar under normal circumstances; today’s forecast is 191K, a drop from the previous 298K.
Later in the day, at 6:00 pm GMT the FOMC will release the Minutes of their latest Meeting, containing details about the reasons that determined the latest rate decision. Usually this release creates strong movement if it contains hints about future rate increases or other important monetary policy decisions.
GBP/USD
The Pound continued to weaken yesterday, partly due to thin Construction data. The first level of support was clearly broken but the bears ran out of steam at the next level and now bullish pressure starts to mount.
Technical Outlook
After breaking 1.2480 and the 50 period Exponential Moving Average, the pair quickly moved into 1.2420 where it bounced higher. Today we will likely see another encounter with 1.2480 but if the bulls fail to break this level, price will probably drop into 1.2385 and possibly 1.2350. The US Dollar will be affected by two important releases and the technical aspect will be secondary.
Fundamental Outlook
The Services Purchasing Managers’ Index is the last survey of the week for the Pound, released at 8:30 am GMT and expected to show a value of 53.5. The survey acts as a leading indicator of economic health and can strengthen the Pound but the impact is often limited if the actual number comes close to analysts’ forecast.
FOREX NEWS: BULLISH PRESSURE MOUNTS AS SUPPORT HOLDS AND US DOLLAR WEAKENS
EUR/USD
Forex News: The pair remained below resistance ahead of the FOMC Meeting Minutes but the document didn’t show any clear signs of the Fed wanting to hike more often than already planned and this was mostly perceived as dovish by market participants so the pair showed again rejection at support.
Technical Outlook
It is clear now that 1.0630 support is holding and rejecting the pair higher, so we expect to see a move above 1.0680 and into the 50 period Exponential Moving Average before the mentioned support can be broken. If the confluence zone created by the 50 EMA and 1.0710 doesn’t hold, it would show that the pair is set to climb even further, possibly towards 1.0800 zone of resistance.
Fundamental Outlook
The day lacks major releases, but the most notable one is the ECB Monetary Policy Meeting Accounts, which is a document that reveals details of the latest ECB Meeting and the reasons behind their latest rate decision. The release usually has a medium impact, which can become stronger if hints about a rate change are revealed; the scheduled time is 11:30 am GMT.
GBP/USD
The Pound strengthened due to better than expected Services PMI and The FOMC Meeting Minutes didn’t help the Dollar recover the losses, so the pair had a bullish day, bouncing at support and breaking the 50 period Exponential Moving Average.
Technical Outlook
Considering that the sellers tried several times to break 1.2420 support zone but the pair bounced higher, we expect to see a move into 1.2550 in the near future. For now price is in a consolidation phase and neither side in in clear control from a longer term perspective but for the short term it looks like the bulls are winning the battle. As long as price remains above the 50 period Exponential Moving Average, our bias is bullish, expecting an extended move north.
Fundamental Outlook
The main price driver today will be the technical aspect, mainly because the currencies in the pair will not be affected by important releases.
FOREX NEWS: NON-FARM PAYROLLS – THE CATALYST FOR STRONG BREAKOUTS
EUR/USD
Forex News: The pair just completed another lacklustre day, without any major releases and with price trapped between support and resistance, bouncing almost perfectly between them.
Technical Outlook
Once the pair entered the channel between 1.0680 resistance and 10630 support, it marked the beginning of a ranging period that will be over only after a strong break of either one of the barriers. The 50 period Exponential Moving Average is still above price and angled downwards, so the overall bias is still bearish but considering the sideways movement seen over the last couple of days, our short term bias is neutral. It must be noted that after periods of inactivity and ranging movement, the pair tends to move strongly in one direction.
Fundamental Outlook
The U.S. Non-Farm Payrolls are today’s highlight and also an indicator that will probably take the pair out of the range seen this week. The report is released at 12:30 pm GMT and shows changes in the total number of employed people, apart from the farming industry; it is widely considered the most important U.S. jobs data and usually strengthens the US Dollar if it shows a reading above expectations. Today’s forecast is a change of 174K, lower than the previous 235K.
GBP/USD
Yesterday for the entire trading session the pair remained close to the 50 period Exponential Moving Average, which is now almost flat, indicating a lack of determination from either side.
Technical Outlook
On the chart above we can see the pair is trapped inside a triangle pattern, which will probably decide the next direction and until price moves out of it, we can expect so see more of the same choppy movement. The resistance zone located at 1.2480 – 1.2500 is also a strong barrier, while support is located at 1.2420 and for a true breakout we need to see these levels broken decisively. Important data comes out today so the pair is likely to show a strong breakout.
Fundamental Outlook
At 8:30 am GMT the British Manufacturing Production is released, showing changes in the total value of goods produced by the manufacturing sector. A higher change than the forecast 0.3% indicates increased economic activity and usually strengthens the Pound. Of course, the pair will be directly affected by the U.S. employment data.
FOREX NEWS: WEAK NFP MOSTLY IGNORED, US DOLLAR ON THE ATTACK
EUR/USD
Forex News: The U.S. Non-Farm Payrolls released Friday showed a disappointing number of only 98K new jobs and this initially weakened the US Dollar but very soon after, the pair reversed and started to move south. The Dollar was affected by a U.S. missile attack on Syria and this may be one of the reasons for the weird behaviour seen Friday.
Technical Outlook
After the initial spike up, the pair broke 1.0630 support, and exited the horizontal channel it was trapped in for the most part of last week. However, the USD had a surprising reaction to a worse than expected NFP and this makes the next move uncertain because we may see a delayed effect and thus a move up for the pair. The Relative Strength Index and the Stochastic have entered oversold territory and this increases the chance of a move up, possibly into 1.0630.
Fundamental Outlook
At 8:10 pm GMT Fed Chair Yellen will speak at the University of Michigan but the impact is hard to anticipate, mostly because of the late hour, when volatility is usually low. Nonetheless, the event should be treated with caution.
GBP/USD
The pair exited the triangle pattern even before the release of the Non-Farm Payrolls and continued lower after the report came out, so Friday’s entire trading session was bearish, a fact that could indicate that the pair will continue on a downward path.
Technical Outlook
Last week ended with the pair just below 1.2385 support after a break of the triangle pattern seen on the chart above. Today we expect to see a small pullback after reaching 1.2350 support, considering the oversold condition indicated by the Relative Strength Index and Stochastic, but after this correction we believe that 1.2350 will be broken and the pair will continue lower. On the other hand, we may see a slow, ranging session considering the lack of major economic releases.
Fundamental Outlook
The United Kingdom didn’t schedule major economic releases for today, so direction will be mostly affected by the technical side.
FOREX NEWS: BULLISH PRESSURE MOUNTS AHEAD OF BRITISH INFLATION DATA
EUR/USD
Forex News: Yesterday’s trading session was mostly controlled by the bulls after the pair formed a bottom at 1.0570. No major economic indicators were released and this partly contributed to the relatively low volatility.
Technical Outlook
We are currently seeing the beginning of a retracement started at 1.0570 and signalled earlier by the oversold condition of the Relative Strength Index and Stochastic. This bullish correction may extend into the resistance at 1.0630 but it must be noted that the pair is in a medium term downtrend so we cannot exclude the possibility of a drop into 1.0525 even before price retraces higher. A confirmed break of 1.0570 will make 1.0525 the first target but our view for today is bullish, expecting the said correction.
Fundamental Outlook
Today’s most notable release is the German ZEW Economic Sentiment, which is a survey widely respected because it is based on the opinions of about 275 German professional investors and analysts, who are well informed about economic conditions due to the nature of their jobs. The time of the release is 9:00 am GMT, the forecast is 13.2 (previous 12.8) and usually a higher number shows optimism and triggers Euro strength.
GBP/USD
After dipping below 1.2385 for a short while, the pair started climbing and is now testing the previous support which may turn into resistance. Bullish pressure is starting to mount but for now this is just a retracement from a short term perspective.
Technical Outlook
The oscillators are moving higher after reaching oversold and the pair is testing 1.2420 resistance, approaching the 50 period Exponential Moving Average. If the current level is broken, we expect to see an encounter with the 50 EMA, where a bounce lower is very likely to occur. As long as price remains below the down trend line seen on the chart above, our view is bearish.
Fundamental Outlook
At 8:30 am GMT the Pound will be affected by the release of the British Consumer Price Index, which is the main gauge of inflation and can have a strong impact on the currency. Higher than anticipated numbers usually strengthen the Pound but the reaction is mild if the actual number matches analysts’ forecast. Today’s forecast is a change of 2.2%, compared to the previous 2.3%.
FOREX NEWS: MORE THAN A RETRACEMENT? US DOLLAR WAVERS AGAINST COUNTERPARTS
EUR/USD
Forex News: The German ZEW Economic Sentiment survey posted a reading of 19.5, much better than the anticipated 13.2, so yesterday’s session mostly belonged to the bulls but resistance wasn’t yet threatened.
Technical Outlook
Currently the pair is in a retracement that will probably extend into the resistance located at 1.0630 and into the 50 period Exponential Moving Average. The way price will react when (and if) it reaches that zone, will offer clues about the next move: if it will show difficulties breaking the zone, then the retracement up will probably end and we will see another test of 1.0570. On the other hand, an easy break will make 1.0680 the next destination. Our view is slightly bearish after a touch of the 50 EMA.
Fundamental Outlook
The Euro and US Dollar will not be affected today by major economic releases, so the technical aspect will be the deciding factor for direction.
GBP/USD
British inflation improved as shown by yesterday’s CPI release (actual change 2.3%, expected 2.2%) and this was one of the reasons for the climb above the 50 period Exponential Moving Average and for the break of the bearish trend line.
Technical Outlook
The break above the 50 EMA and above the bearish trend line shows that the current move is more than a simple retracement, so it’s very likely to see an extended climb, possibly into 1.2550. It must be noted that at the time of writing the resistance zone around 1.2480 is still holding so we may see a small bounce lower before the level is broken. Also, if the pair reaches 1.2550 it will probably retrace on the way there, meaning that is will not shoot up in a straight line.
Fundamental Outlook
At 8:30 am GMT the Pound will be affected by the release of the British Claimant Count, an indicator that shows changes in the total number of persons who asked for unemployment related social help. A higher number signals decreased economic activity and usually weakens the Pound but the impact is often mild. Today’s forecast is a change of -10.2K, while the previous was -11.3K.
FOREX NEWS: VOLATILITY DIMS, PAIRS SHOW MIXED TRADING SIGNALS AHEAD OF U.S. PRODUCER PRICE DATA AND CONSUMER SENTIMENT SURVEY
EUR/USD
Forex News: After bouncing perfectly at 1.0630 resistance, the pair remained in a relatively tight range and moved almost sideways for the remainder of yesterday’s trading session. The pair is still below the 50 EMA and the bias remains slightly bearish.
Technical Outlook
As long as the pair is trading below 1.0630 resistance and below the 50 period Exponential Moving Average, we anticipate a drop through 1.0570 support and an encounter with 1.0525. Once and if the two resistance elements are broken, we expect to see a move into 1.0680. However, it must be noted that at the moment control doesn’t clearly belong to either side and the pair seems to be drifting without a strong bias.
Fundamental Outlook
The US Dollar will be influenced today by two indicators with a potentially high impact: the Producer Price Index and the University of Michigan Consumer Sentiment. The first indicator shows changes in the price charged by producers for their goods and has inflationary implications because a higher producer price will eventually generate a higher consumer price. The release is scheduled at 12:30 pm GMT and the expected change is 0.0% (previous 0.3%).
The Consumer Sentiment survey comes out at 2:00 pm GMT and offers insights into the opinions of 500 consumers regarding current and future economic conditions. The expected value is 97.1 and numbers above it show optimism, usually creating USD strength.
GBP/USD
The British Claimant Count released yesterday showed that a higher number of individuals asked for unemployment related benefits but another report released at the same time showed that average earnings have increased. This was perceived as bullish for the Pound and outweighed the unemployment data.
Technical Outlook
The pair broke 1.2480 and remained above it, so now we anticipate a move into 1.2550 in the near future. It is very possible to see a correction lower once the Relative Strength Index enters overbought territory, but this move will be probably rejected by 1.2480, which has already turned into support. If this support will be broken, we expect a move back to the recently broken trend line.
Fundamental Outlook
The United Kingdom didn’t schedule major economic releases for today, so the pair will be affected by the U.S. announcements and by the technical aspect.
Forex News: The US Dollar strengthened as U.S. President Trump mentioned in an interview that the currency is too strong for his liking. This took the pair into the resistance at 1.0680, where it bounced lower and moved back under the 50 period Exponential Moving Average.
Technical Outlook
The pair’s next move is uncertain, considering that today most European banks will be closed in observance of Good Friday and this will affect volatility. Strictly from a technical point of view, we must recognize that the US Dollar erased most of the losses and moved below the 50 period EMA and below 1.0630 support, so now the next destination may very well be 1.0570. A quick move above 1.0630 and above the 50 EMA will turn the tide in favour of the bulls once again.
Fundamental Outlook
At 12:30 pm GMT two important releases will affect the US Dollar: the U.S. Consumer Price Index (CPI) and the Retail Sales. The former indicator shows changes in the price paid by consumers for the goods and services they purchase and acts as a key gauge of inflation, while the latter shows changes in the total value of sales made at retail levels. The CPI is expected to show a value of 0.0% and the Retail Sales a change of 0.1%; higher numbers for these indicators usually strengthen the greenback.
GBP/USD
The pair had a similar behaviour to the EUR/USD, strengthening in the first part of the session, then dropping back down through the recently broken level. Most of the climb was generated by U.S. President Trump’s comments about the strength of the US Dollar.
Technical Outlook
The bullish move ran out of steam after a short-lived break of 1.2550 resistance zone and it’s very likely to see a move back into 1.2480 support. By the time price gets there, the 50 period Exponential Moving Average will probably climb and will form a confluence zone together with the level we just mentioned; this zone will be tough to break and will probably reject price higher but Good Friday and the approaching of the Easter Holidays will probably generate irregular price action.
Fundamental Outlook
British banks will be closed today in observance of Good Friday and volatility will be affected by this, so we recommend caution. The pair will also be affected by the U.S. releases mentioned earlier.
FOREX NEWS: EASTER MONDAY THROWS MARKETS INTO UNPREDICTABILITY
EUR/USD
Forex News: The pair moved mostly sideways Friday and was affected by thin volatility generated by the approaching of the Easter Holiday. U.S. economic data was disappointing but this didn’t have a strong effect on the pair’s movement.
Technical Outlook
The last trading session doesn’t hold enough clues for an accurate prediction and on top of that, today most European banks will be closed, celebrating Easter. This means that price action will be substantially affected and technical analysis is inconclusive. From a longer term perspective, as long as the pair remains below the 50 period Exponential Moving Average, our view is slightly bearish.
Fundamental Outlook
Banks across Europe will be closed today, celebrating Easter Monday. This will almost certainly affect the pair’s behaviour, generating irregular volatility and possibly erratic price action.
GBP/USD
Friday the pair showed bullish action but the resistance at 1.2550 wasn’t threatened and volatility remained relatively low, mostly due to Good Friday.
Technical Outlook
Price action will be unpredictable today and affected by the Easter Holiday. Volatility can quickly change from very low to very high and the pair is likely to move erratically. Once behaviour returns to normal, we expect a touch of 1.2550 if price remains above the 50 period EMA.
Fundamental Outlook
UK banks will also be closed in observance of the Easter Holiday and no major economic indicators will be released. Price movement will be affected so we recommend caution.
FOREX NEWS: US DOLLAR BOUNCES BACK AFTER MONDAY’S BEAT DOWN
EUR/USD
Forex News: Price action was bullish yesterday, with the pair moving above the 50 period Exponential Moving Average and above previous resistance. Some of this movement may be attributed to the Easter holidays and thin liquidity.
Technical Outlook
If the pair holds above 1.0630, we will probably see a test of 1.0680, and a consequent move into 1.0710. However, we don’t expect to see a break of the zone created by the two mentioned levels today, mostly because there are no major releases scheduled and the markets may still be affected by irregular volatility. For now the pair remains in a range and an overbought condition of one or both oscillators will probably trigger a move down.
Fundamental Outlook
At 12:30 pm GMT the U.S. Building Permits are released, showing how many permits were issued for the construction of residential buildings during the previous month. The number is expressed in an annualized format and can strengthen the US Dollar if it comes out above the forecast, which for today is 1.25M; however, more often than not the impact of this indicator is medium, not high.
GBP/USD
The Pound won the battle against the US Dollar yesterday and the pair moved strongly above the resistance located at 1.2550. This sets the stage for a continued climb, into the next resistance zone.
Technical Outlook
The strong move above 1.2550 is likely to extend into the high at 1.2615 but it should be noted that the Relative Strength Index has reached its 70 level, thus indicating an overbought condition of the pair. This increases the chance of a move lower to re-test the recently broken level (1.2550) before 1.2615 can be reached.
Fundamental Outlook
The pair will be affected only by the U.S. indicator mentioned above, because the United Kingdom didn’t schedule any important releases.
FOREX NEWS: POUND SLICES THROUGH RESISTANCE LIKE A HOT KNIFE THROUGH BUTTER
EUR/USD
Forex News: The pair had a bullish trading session yesterday, with the Euro affected by French election polls. Resistance was broken and a retracement is due before further advances can be made.
Technical Outlook
The resistance at 1.0680 was broken during yesterday’s rally and now we expect to see a touch of 1.0710, followed by a bounce lower. The pair has travelled a relatively long distance to the upside, compared to the slow movement seen over the recent period, and the Relative Strength Index is touching its 70 level, giving an early signal of a move lower due to overbought condition. After said retracement, we expect to see a move into 1.0800 resistance in the near future, if the pair remains above the 50 EMA.
Fundamental Outlook
The only notable release of the day is the Final version of the European Consumer Price Index, scheduled at 9:00 am GMT and expected to show a change of 1.5%, same as previous. The CPI acts as the main gauge of inflation, with higher numbers strengthening the Euro but the Final version is usually the least important.
GBP/USD
British Prime Minister Theresa May made an unscheduled appearance yesterday, and called for an early General Election in June. This triggered a massive move of about 250 pips to the upside and took the pair through several resistances.
Technical Outlook
Yesterday’s huge rally brought the pair into 1.2770 key resistance, which is also the top of the channel that confined the pair for a long time (better seen on a Daily chart). The strength of this level, combined with the deep overbought condition shown by the Relative Strength Index, make us anticipate a bounce lower, but the Pound is on its way to break 1.2770 after this possible pullback. Any other surprise speeches from British politicians will likely trigger more volatility, so we recommend caution.
Fundamental Outlook
The United Kingdom didn’t schedule major news announcements but keep an eye out for possible election or Brexit talks.
FOREX NEWS: RETRACEMENTS UNDERWAY, BULLS STILL IN CHARGE
EUR/USD
Forex News: The European Final CPI came out with the expected value and did not have a major impact on the Euro. The pair climbed above 1.0710 and is now re-testing the level from above.
Technical Outlook
If 1.0710 level will turn into support, thus rejecting the pair higher, the chances of a move into 1.0775, followed by 1.0800 will increase. The Relative Strength Index is coming down after visiting the overbought zone, so the current bearish retracement may extend into 1.0680 where a bullish bounce will have a higher probability of happening. Our bias is bullish, expecting a break of yesterday’s high.
Fundamental Outlook
At 12:30 pm GMT the Philly Fed Manufacturing Index comes out, showing the opinions of about 250 manufacturers from the Philadelphia district regarding the general level of business conditions. It acts as a leading indicator of economic health, with a medium impact. Usually, numbers above the forecast 25.6, strengthen the US Dollar.
GBP/USD
Fuelled by the snap election call, the Pound’s gains extended way past 1.2770 resistance and into 1.2855 where it finally paused. Yesterday’s trading session slowed down but the climb will likely continue.
Technical Outlook
Price didn’t stop at 1.2770 and pierced through 1.2855, creating a high at 1.2905 before retracing below the previous level. It seems that 1.2855 is still resistance because we can clearly see several candles that touch the level but remain below it. So, we are dealing with strong resistance and an extremely overbought Relative Strength Index, facts that make us anticipate a move lower before bullish momentum will resume.
Fundamental Outlook
Bank of England Governor Carney will speak at 3:30 pm GMT at the Institute of International Finance Policy Summit and an hour later he will participate in a panel discussion at an event organized by the Bank of France. Pound volatility may surge during these events, so we recommend caution.
FOREX NEWS: BRITISH RETAIL SALES: AN EXCLAMATION MARK ON A HUGE WEEK
EUR/USD
Forex News: After establishing 1.0710 as support, the pair continued higher yesterday, touching the resistance at 1.0775. U.S. Manufacturing data was worse than anticipated and this contributed to the climb.
Technical Outlook
As anticipated, the bulls remained in control and the pair re-tested the previously broken resistance (1.0710), bouncing higher and thus turning the level into support. The resistance at 1.0775 now stands in front of rising price and as seen from yesterday’s price action, the pair reacts to this level so we may get another retracement to the downside. As long as the pair keeps making higher lows and higher highs, our view is bullish but the Relative Strength Index is showing bearish divergence and this increases the chance of a move down.
Fundamental Outlook
At 7:30 am GMT, Germany will release their Services and Manufacturing PMIs, which are both leading indicators of economic health and optimism, derived from the opinions of purchasing managers from the respective sectors. The Services PMI is expected to show a value of 55.5 while the Manufacturing PMI has an anticipated value of 58.1; higher numbers usually strengthen the Euro but the indicators often have just a medium impact.
GBP/USD
Price bounced almost perfectly at 1.2770, establishing the level as support but the previous high was not broken yesterday; however, the bulls remain in clear control.
Technical Outlook
Currently the pair is capped by 1.2855 resistance and 1.2770 support and as long as these levels hold, we expect to see ranging movement. The bias remains clearly bullish and we anticipate a move above the previous high (1.2905) soon after the break of 1.2855. It is worth noting that both the Stochastic and Relative Strength Index are coming down from overbought area, so a break of 1.2770 is not out of the question but the extent of the move should be limited.
Fundamental Outlook
The British Retail Sales are released today at 8:30 am GMT, showing changes in the total value of sales mate via retail outlets. Usually the indicator has a hefty impact on the Pound, with higher numbers strengthening it. The expected value is -0.3%, compared to the previous 1.4%.
