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745

FOREX NEWS: EURO BOOSTED BY ‘TOO WEAK’ COMMENTS, POUND STILL ON THE FENCE

EUR/USD

Forex News: The Euro got another boost yesterday, this time from Germany’s Merkel, who mentioned that she considers the currency “too weak”. The comment sent the pair higher, rebounding around 1.1170 and moving past 1.1240 resistance.



Technical Outlook

Although the current move up is overextended, the Euro found new strength in Chancellor Merkel’s comments and now the resistance at 1.1240 is in danger. The overall picture remains bullish and the next target is located at 1.1340 if 1.1240 can be decisively broken. However, it is highly likely to see a bearish retracement before the pair can reach that zone. Bearish divergence is still present (price is making higher highs and the Relative Strength Index is making lower highs), thus increasing the chances of a pullback.

Fundamental Outlook

The day’s highlight is the release of the German IFO Business Climate, scheduled at 8:00 am GMT. This is a survey with a very large sample size of about 7,000 German businesses, focused on the respondents’ view on current business conditions as well as a 6-month outlook. The forecasted value is 113.1 and usually the Euro is strengthened by a higher than expected number but the impact of this indicator is not very high.

GBP/USD

The pair dipped below support, in close vicinity of the 50 period Exponential Moving Average but soon after, it climbed back to where the market opened. Overall yesterday’s session lacked substantial developments or a clear bias.


Technical Outlook

The pair showed rejection near the 50 period EMA but also failed to move past 1.3050 again. These are indications that control doesn’t clearly belong to either side for the moment, although from a longer term perspective the pair is still in an uptrend. Today’s price direction will be mostly determined by Governor Carney’s testimony and the technical side will be secondary. The levels to watch remain 1.3050 followed by 1.3090 to the upside and the 50 period EMA to the downside.

Fundamental Outlook

At 9:00 am GMT the Inflation Report Hearings take place. During these hearings, BOE Governor Mark Carney and several MPC members will testify before the Parliament’s Treasury Committee on inflation and economic outlook. The Pound can be strongly affected by the testimony but the impact cannot be accurately predicted, thus caution is recommended.

746

FOREX NEWS: US DOLLAR SHOWS MINOR SIGNS OF RECOVERY. FOMC MEETING MINUTES EYED

EUR/USD

Forex News: The German IFO Business Climate survey released yesterday posted a better than expected value but this didn’t help the Euro to push higher, mostly because the pair was already overbought for a long period.



Technical Outlook

The uptrend failed to break 1.1240 for the time being, although the pair climbed briefly above this resistance. In the short term it’s very likely to see a move into 1.1170, followed possibly by an encounter with the 50 period Exponential Moving Average. Overall the pair is in a clear uptrend but it is also under bearish pressure.

Fundamental Outlook

At 12:45 pm GMT, ECB President Mario Draghi will speak at the First Conference on Financial Stability, organized in Madrid by the Bank of Spain. The speech may have an impact on the Euro and volatility may be affected, so caution is recommended.

On the US Dollar side we have the FOMC Meeting Minutes, scheduled for release at 6:00 pm GMT. The document contains details of the reasons behind the latest interest rate decision but more importantly, it can contain hints about future monetary policy. If this is the case, the US Dollar will be strongly affected so, as always, we recommend caution.

GBP/USD

The Pound slipped lower yesterday but movement was choppy and lacked a strong bias. The 50 period Exponential Moving Average was touched but offered good support and pushed the pair higher.


Technical Outlook

The failure to break the 50 period EMA to the downside shows that the pair is not yet ready for a strong move south but on the other hand, the bulls also lack clear determination. It looks like the pair is still trapped in a range, but with a slightly bullish bias as long as it remains above the 50 period EMA. To the upside 1.3050 is still the first target and a strong resistance.

Fundamental Outlook

The Pound will not be affected by any major economic indicators today but the pair’s direction will be influenced by the contents of the FOMC Meeting Minutes.

747

FOREX NEWS: US DOLLAR ON SHAKY GROUND: ADVANCES AGAINST POUND, LOSES GROUND AGAINST EURO

EUR/USD

Forex News: The pair had a flat day before the release of the FOMC Minutes but volatility increased at the time of the announcement and the Dollar weakened. The support at 1.1170 is still intact and shows clear rejection at the time of writing.


Technical Outlook

As long as the pair remains above 1.1170 support and above the 50 period Exponential Moving Average, our bias is bullish, anticipating a move into 1.1240 resistance and possibly above it. Almost all of yesterday’s price action took place very close to the mentioned support, so this level is clearly important for short term movement and a break would indicate that the bears are winning the battle and would make the 50 EMA the first target.

Fundamental Outlook

Today the two currencies will not be affected by major economic indicator releases but the OPEC Meetings take place in Vienna and this may influence the markets to a certain extent. Also, keep in mind that German and French banks will be closed in observance of Ascension Day.

GBP/USD

Overall the pair had a bearish session yesterday and the US Dollar losses seen at the time of the FOMC Minutes release were quickly erased. Price is now trading below the 50 period Exponential Moving Average, which is a bearish sign.


Technical Outlook

As long as the pair is trading below 1.2990 and below the 50 EMA, our bias is bearish for the short term, anticipating a move into 1.2900. It must be noted that the Stochastic has moved into oversold territory, so a potential move into the mentioned support might be followed by a bounce higher. Overall the pair remains in an uptrend but control doesn’t clearly belong to either side.

Fundamental Outlook

At 8:30 am GMT the Pound will be affected by the release of the Second Estimate Gross Domestic Product, expected to show a change of 0.3%, same as previous. This version of the GDP is less important than the Preliminary but more important than the Final so we can expect to see some movement, especially if the actual change will differ from analysts’ forecast; better than expected numbers usually strengthen the Pound.

748

FOREX NEWS: CAN THE US DOLLAR BOUNCE BACK? U.S. GROSS DOMESTIC PRODUCT EYED

EUR/USD

Forex News: Yesterday the pair spent the entire session bouncing between support and resistance, without breaking either of them. The economic scene was calm, without major releases from either side.



Technical Outlook

By failing to break 1.1240, the pair printed a lower high yesterday and this suggests that we may see a move into the 50 period Exponential Moving Average in the near future. Price remains in an uptrend for the time being but the bulls are starting to lose their clear control and a move below the 50 EMA would further weaken the uptrend. To the upside the first important barrier remains 1.1240, followed by 1.1340.

Fundamental Outlook

At 12:30 pm GMT the Preliminary version of the U.S. Gross Domestic Product is released, showing changes in the total value of goods and services generated by the economy. This is the main gauge of economic performance and usually, higher numbers strengthen the US Dollar. Today’s forecast is a change of 0.9% compared to the previous 0.7%.

Also today the G7 Meetings start and will be attended by representatives of the 7 industrialized nations. The matters discussed may have an impact on the pair’s movement, so caution is recommended.

GBP/USD

British GDP numbers released yesterday disappointed and this reversed an earlier climb above 1.2990 resistance. Overall the session had choppy price action, with a bearish bias.


Technical Outlook

If the bears can push price lower, keeping the pair below the 50 period Exponential Moving Average, we are likely to see a move into the support at 1.2900. A push above the 50 EMA will probably take the pair above 1.2990 – 1.3000 and closer to 1.3050. From a longer term perspective the pair is in an uptrend but the break of the 50 EMA signals a possible short term bear market.

Fundamental Outlook

The Pound will not be affected by any important economic indicators today but UK and US representatives will attend the G7 Meetings and this can influence the pair overall.

749

FOREX NEWS: ECB PRESIDENT DRAGHI TESTIFIES, U.S. AND U.K. BANKS CLOSED DUE TO HOLIDAYS

EUR/USD

Forex News: The U.S. Preliminary GDP released Friday posted a better value than analysts had anticipated (actual 1.2%, forecast 0.9%) and this was part of the reason why the US Dollar had a strong session.


Technical Outlook

After the failure to break 1.1240 the pair moved into the confluence zone created by the 50 period Exponential Moving Average and the support at 1.1170. This zone will be today’s main focus, as a break would probably trigger a move into 1.1120 but a bounce will make 1.1240 the target once more. The pair is still in an uptrend, with no significant low printed, so the possibility of another climb shouldn’t be overlooked although bearish pressure is mounting.

Fundamental Outlook

Today at 1:00 pm GMT, ECB President Mario Draghi will testify in front of the Economic and Monetary Affairs Committee about the economy and monetary policy. This speech can have a high impact on the Euro, so caution is recommended. U.S. banks will be closed in observance of Memorial Day and no major indicators will be released.

GBP/USD

The Pound weakened against most of its counterparts Friday, on concerns that Prime Minister May’s Conservative Party may not be able to win the June 8 election. The pair moved through several support levels and lost about 150 pips in a day.



Technical Outlook

The bears are in control of short term price action but the strong drop seen Friday is likely to retrace higher, possibly into the resistance at 1.2850. Both the Relative Strength Index and Stochastic are oversold, increasing the chances of a bounce higher from 1.2770 but bearish pressure is high and this could generate another move south after the said retracement. The lacklustre fundamental scene may contribute to a ranging session, without major developments.

Fundamental Outlook

UK banks will be closed due to Spring Bank Holiday and no important indicators will be released. This may contribute to a low-volatility day, with possible choppy price action.

750

FOREX NEWS: GERMAN INFLATION, U.S. CONSUMER CONFIDENCE – CATALYSTS FOR SURGING VOLATILITY

EUR/USD

Forex News: Price action was very slow yesterday, with a slightly bullish bias after a failed attempt to break the 50 period Exponential Moving Average. Draghi’s testimony did not have a notable impact on the pair and volatility remained low throughout the session.


Technical Outlook

For now the pair has found good support at the confluence zone created by the 50 period Exponential Moving Average and the horizontal level at 1.1170. If the bears cannot break this zone soon, we will probably see a resurgence of the uptrend and possibly another test of 1.1240 key resistance. On the other hand, a break of 1.1170 and the 50 EMA will open the door for a touch of 1.1120 but currently price action lacks momentum and our bias is mostly neutral.

Fundamental Outlook

Today at 12:00 pm GMT we take a look at German inflation with the release of their Consumer Price Index. The indicator shows changes in the price paid by consumers for the goods and services they purchase and usually strengthens the Euro if it posts numbers above forecast, which for today is -0.1% from the previous 0.0%.

On the US Dollar side we have the Consumer Confidence, which is a survey with a large sample size of about 5,000 households, focused on the respondents’ opinions regarding the overall state of the economy. Today’s forecast is 120.1, the time of the release is 2:00 pm GMT and normally, a higher number strengthens the US Dollar but the impact is often medium.

GBP/USD

U.K. and U.S. banks were closed yesterday due to holidays but nonetheless, the big move seen Friday was retraced higher and the pair reached the previous support, now turned resistance.


Technical Outlook

The pair has bounced almost perfectly at 1.2770, which remains a strong support and price is likely to react to it in the future. The latest strong move is bearish and yesterday’s climb can be considered a normal retracement, so if 1.2850 resistance holds, we expect to see a continuation of the move started Friday and potentially a break of 1.2770 or at least another test; otherwise, the pair will probably climb into the 50 period EMA.

Fundamental Outlook

There are no major economic indicators scheduled for release today, so the pair’s direction will be decided by the technical aspect and by the U.S. Consumer Confidence survey.

751

FOREX NEWS: BULLS ERASE LOSSES, EUROZONE INFLATION EYED FOR NEXT MOVE

EUR/USD

Forex News: The euro moved higher yesterday on speculation that the European Central Bank may remove easing at their June meeting. Now the pair is trading again above the 50 EMA and above support.


Technical Outlook

Although the pair briefly dipped below the 50 period Exponential Moving Average, the bulls quickly pushed price higher after a bounce at 1.1120 support. This makes 1.1240 the first target and a break would mean uptrend resumption and probably a move into 1.1340 resistance. If the pair moves below the 50 period EMA again, we will probably see a break of 1.1120 and a move into 1.1075.

Fundamental Outlook

The Eurozone Consumer Price Index will be released today at 9:00 am GMT, offering insights into the state of European inflation. Today’s version is the Flash Estimate and tends to have a bigger impact than the Final, which is released about two weeks later, so we can expect to see increased volatility, with bullish bias if the actual number exceeds the forecast of 1.5% (previous 1.9%).

GBP/USD

The Pound rebounded and erased some of the losses suffered last week, making the short term bias bullish and bringing the pair above 1.2850, a level that acted as both support and resistance in the past.


Technical Outlook

The resistance at 1.2850 initially pushed price lower but the sellers quickly ran out of steam and the pair continued higher, through the mentioned resistance, now turned support. The immediate target seems to be the 50 period Exponential Moving Average but if the line is not broken, we expect to see another push below 1.2850. The 50 EMA is in close vicinity of 1.2900 resistance and together the 2 elements create a confluence zone which will be tough to break.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for today, so the pair’s direction will be mainly decided by the technical side.

752

**

FOREX NEWS: US DOLLAR WEAK ACROSS THE BOARD AHEAD OF ADP NON-FARM EMPLOYMENT CHANGE

**

EUR/USD

Forex News: European inflation data came slightly below expectations yesterday but despite this fact, the pair climbed above the 50 period Exponential Moving Average and tested 1.1240 resistance, giving us a bullish session.

Technical Outlook

The pair climbed above the 50 period EMA and above 1.1170, which has now turned into support once more. If the key resistance at 1.1240 can be surpassed with ease, we expect to see a move into the next resistance, located 100 pips higher, at 1.1340. Another failed attempt to break 1.1240 would show increased pressure and would make our bias bearish, aiming for 1.1170, followed by 1.1120.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look at the U.S. employment situation with the release of the ADP Non-Farm Employment Change. The report shows changes in the total number of employed people, excluding Government and the farming sector. The indicator is less important than the Non-Farm Payrolls, released Friday but nonetheless, higher numbers are indicative of a thriving economy and usually strengthen the US Dollar. Today’s forecast is 181K, a small increase from the previous 177K.

GBP/USD

After a perfect bounce at 1.2770 the pair rallied and the bulls managed to break 1.2850. The US Dollar has weakened against most of its counterparts and this will likely generate additional upside movement.

Technical Outlook

The pair is facing an important hurdle represented by the 50 period Exponential Moving Average, followed by the horizontal resistance at 1.2900. If these two elements can be broken, we expect to see a climb into 1.2990 but this target will probably be reached after a retracement. If the pair bounces lower at the 50 EMA or at 1.2900, it will probably move into 1.2770 area once again.

Fundamental Outlook

The Pound will be affected today by the release of the British Manufacturing PMI, a survey derived from the opinions of purchasing managers about the state of the manufacturing sector. Numbers above the forecast usually strengthen the currency but the impact is limited if the actual number comes close to expectations. The indicator is released at 8:30 am GMT and the anticipated number is 56.5.http://i.imgur.com/hOTPSVV.jpg

753

FOREX NEWS: UNCERTAINTY AHEAD OF U.S. NON-FARM PAYROLLS. PREPARE FOR A VOLATILITY BOOST

EUR/USD

Forex News: The ADP Non-Farm Employment Change posted a much better number than expected (actual 253K, forecast 181K) and this strengthened the US Dollar, bringing the pair lower after another encounter with 1.1240 zone of resistance.

Technical Outlook

Most of the US Dollar gains triggered by the positive employment data were erased soon after but overall the session was bearish. The failed break of 1.1240 – 1.1250 zone is a sign that the uptrend may be coming to an end and makes the 50 period Exponential Moving Average the first target, followed by 1.1170. A break of 1.1240 would invalidate this scenario but price action today will be influenced by the U.S. employment data and the technical side will be secondary at release.

Fundamental Outlook

Today at 12:30 pm GMT the most important U.S. jobs indicator will be released: the Non-Farm Payrolls (aka Non-Farm Employment Change). The report shows changes in the total number of employed people during the previous month, excluding the farming sector and usually has a very strong impact on the US Dollar, with higher numbers strengthening it. Today’s forecast is a change of 186K, a drop from the previous 211K.

GBP/USD

Yesterday the pair descended into 1.2850 support on the back of US Dollar strength but the bears failed to break the level and instead price bounced higher, testing resistance again.

Technical Outlook

During the last couple of days the pair bounced between support and resistance, offering mixed signals. As long as the pair remains above the 50 period Exponential Moving Average and breaks 1.2900, our bias is bullish but the technical aspect will be secondary to the fundamental as both currencies in the pair will be influenced by economic releases.

Fundamental Outlook

The Construction PMI is today’s highlight for the Pound, scheduled at 8:30 am GMT and expected to show a value of 52.7. This is a survey derived from the opinions of purchasing managers, which tries to gauge their opinions regarding business conditions and the overall health of the Construction sector. Usually a value above expectations strengthens the Pound but the effect is limited if the actual number matches the forecast. The pair will also be affected by the release of the U.S. jobs data.

754

FOREX NEWS: POUND AND US DOLLAR AFFECTED BY SERVICES DATA, EUROPEAN BANKS CLOSED DUE TO WHIT MONDAY

EUR/USD

Forex News: Friday was all about the story of the US Dollar and the Non-farm Payrolls that posted a change of 138K, much lower than the anticipated 181K. The previous value was also revised lower, from 211K to 174K and all this weakened the greenback severely, taking the pair above resistance.

Technical Outlook

Before the NFP release the pair had a slow session but once the numbers came out, the US Dollar weakened and as a result the resistance at 1.1240 was broken. We may see a re-test of the level, which may turn into support but for now the first target is located at 1.1340. It is likely that the trip there will take more than one day but a quick return below 1.1240 followed by a break of the 50 period EMA would invalidate such a scenario.

Fundamental Outlook

At 2:00 pm GMT the US Dollar will be affected by the release of the ISM Non-Manufacturing PMI, which is a survey that acts as a leading indicator of economic health and optimism. The forecast is 57.3 and usually, higher numbers strengthen the currency.

Today German and French banks will be closed due to Whit Monday and this may affect volatility, possibly creating choppy price movement.

GBP/USD

For the entire last week price was trapped inside a horizontal channel and Friday was no exception. The US Dollar weakness generated by the NFP release took the pair back into the upper part of the channel but a breakout didn’t materialize.

Technical Outlook

The bounce at 1.2850 was generated by the disappointing NFP numbers and the move is likely to extend past the resistance at 1.2900. The short term bias is bullish but last week ended with price very close to the 50 period EMA which is flat, thus confirming that the pair is in a ranging state. Our bias is neutral but a break of 1.2900 could generate an extended move in that direction.

Fundamental Outlook

At 8:30 am GMT the British Services PMI is released, showing the opinions of purchasing managers from the services sector about business conditions and overall economic health of the said sector. The forecast is 55.1 and higher numbers are beneficial for the Pound.

755

FOREX NEWS: BRITISH ELECTION SCENE HEATS UP – CONSERVATIVES BACK IN THE LEAD

EUR/USD

Forex News: Price action was slow yesterday and the fact that some European banks were closed due to Whit Monday contributed to the lack of movement. The U.S. Non-Manufacturing PMI came very close to analysts’ expectations, so the impact was low.

Technical Outlook

The pair retraced into 1.1240 which was the previous resistance, now turned support and here the next move will be probably decided. A bounce would confirm 1.1240 as strong support and would make 1.1340 the next target, while a break would take the pair into the 50 period Exponential Moving Average and if this dynamic support is broken, we will probably see a stronger move down, with 1.1170 as target. The pair is still in an uptrend but bearish pressure has increased.

Fundamental Outlook

The day ahead lacks major economic releases, with the only notable one being the U.S. JOLTS Job Openings, an indicator that tracks the number of available jobs during the previous month, excluding the farming industry. Today’s forecast is 5.65 Million and usually a higher number strengthens the US Dollar but the impact is often limited; the time of the release is 2:00 pm GMT.

GBP/USD

The Pound dropped after the Services PMI disappointed (forecast 55.1, actual 53.8) but then found new buyers after a poll showed that May’s Conservative Party is back in the lead. This took the pair above the resistance at 1.2900 and created a bullish session.

Technical Outlook

The break of the horizontal channel that confined the pair for almost a week will probably trigger a stronger move upwards, making 1.2990 – 1.3000 the next likely destination. However, it must be noted that price action is still choppy and heavily influenced by Election polls or even by speculation about their outcome and this means the pair can move strongly to either side, without warning. All this makes our bias mostly neutral for the days to come and we recommend caution.

Fundamental Outlook

The Pound will not be affected today by major economic indicators, so the technical aspect will prevail, assuming there are no surprises coming from the Election scene.

756

FOREX NEWS: PRICE IN TIGHT RANGES AS WE DRAW CLOSER TO ECB DECISION AND BRITISH ELECTIONS

EUR/USD

Forex News: Yesterday the pair traded above 1.1240 support but movement remained very slow and price was confined in a tight range. The U.S. JOLTS Job Openings posted a better than expected value but this didn’t spur volatility.

Technical Outlook

The pair is now moving inside a tight range, defined by 1.1240 support and 1.1280 – 1.1285 resistance but volatility is likely to remain relatively low until Thursday’s ECB rate announcement and press conference. A break of either support or resistance will probably trigger an extended move in that direction but as long as the pair is trading above the 50 period Exponential Moving Average, our bias is bullish, aiming for 1.1340 resistance, a level that will probably not be reached today.

Fundamental Outlook

We don’t have anything major on today’s economic calendar so the pair’s direction will be mostly decided by the technical side.

GBP/USD

After reaching a session high at 1.2950, the pair tumbled below the 50 period Exponential Moving Average but erased some of the losses soon after. Overall the session was choppy, with quick reversals on the lower time frames.

Technical Outlook

The four hour candle that pierced the 50 period EMA is showing a long wick in its lower part, thus suggesting rejection and possibly a move higher. If price breaches 1.2900 again, it will probably move into yesterday’s high at 1.2950 and if it remains below the 50 EMA, we will probably see an encounter with 1.2850. The pair remains high-risk and should be treated with caution.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases for today but keep an eye out for any news regarding the British Parliamentary Elections.

757

FOREX NEWS: GET READY FOR ACTION. BRITISH PARLIAMENTARY ELECTIONS ARE FINALLY HERE

EUR/USD

Forex News: The pair had an interesting session yesterday, dropping sharply below the 50 period Exponential Moving Average and immediately climbing above it. The initial move down can be attributed to rumours that the ECB will cut their inflation expectations.

Technical Outlook

Price continues to lack a clear direction and the pair is still stuck in a choppy range-mode, with sharp reversals. However, the quick move above the 50 period Exponential Moving Average shows some bullish pressure and makes us anticipate a break of 1.1280 resistance, en route to 1.1340 – 1.1350. Another dip below the 50 EMA would probably take price into 1.1170 but keep in mind that today the technical aspect will be secondary, mostly due to the ECB Meeting.

Fundamental Outlook

At 11:45 am GMT the European Central Bank will announce the interest rate decision and although no change is anticipated (currently 0.00%), the Euro is likely to show increased volatility. Later at 12:30 pm GMT, ECB President Mario Draghi will hold his usual press conference, during which he will discuss the rate decision and will answer questions coming from journalists. Usually the Q&A section of the press conference creates the strongest movement and caution is recommended until it concludes.

GBP/USD

There was increased buying pressure yesterday and the pair pushed higher after a bounce at the 50 period Exponential Moving Average. It looks like the Pound is breaking out of the choppiness seen lately but today the British Parliamentary Elections take place and this will heavily affect its behavior.

Technical Outlook

Price is trading above the 50 period EMA after a strong bounce and the short term outlook is bullish, aiming for 1.2990 but as mentioned before, today’s price action will be heavily affected by polls and rumors regarding the Parliamentary Elections, so a technical prediction cannot be made accurately. We recommend caution throughout the day.

Fundamental Outlook

Today is all about the British Parliamentary Elections! Although the official results will be know late at night, the Pound will be affected by exit polls and even speculation throughout the day. Caution is highly recommended.

758

FOREX NEWS: PRICE DIRECTION STILL UNCERTAIN AFTER BRITISH PARLIAMENTARY ELECTIONS

EUR/USD

Forex News: The ECB maintained the rate at 0.00% but reduced their inflation expectations for 2017 and the following years, so the Euro was overall under pressure, moving slightly below the 1.1200 handle.

Technical Outlook

Price action remained very choppy throughout yesterday’s trading session and a quick dip below the 50 period Exponential Moving Average was soon reversed. Despite this choppiness, our bias is slightly bearish as long as the pair is trading below 1.1280 resistance; the first potential target for this bearish scenario is 1.1170 followed by 1.1120, while to the upside, a break of the mentioned resistance would open the door for a move into 1.1340.

Fundamental Outlook

The trading week ends without major economic releases, so price action today will be mostly decided by the technical aspect.

GBP/USD

At the time of writing the official result of the British Parliamentary Elections is not known and overall yesterday’s session was choppy, with back and forth movement.

Technical Outlook

The pair descended into 1.2900 support where it encountered the 50 EMA as well, and as a result it immediately jumped higher, closer to the day’s high. The Pound remains under heavy influence from the Parliamentary Elections and because the official results are not in at the time of writing, we cannot make a proper assessment of price action. For now we recommend caution, but strictly from a technical standpoint, the pair shows rejection at support, so the bias is bullish.

Fundamental Outlook

The British Manufacturing Production is today’s highlight, scheduled for release at 8:30 am GMT. This indicator shows changes in the total value of goods generated by the Manufacturing sector and usually has a medium-to-high impact on the Pound. A higher change than the anticipated 0.8% (previous -0.6%) shows increased economic activity and usually strengthens the Pound.

759

FOREX NEWS: POUND POSTS MAJOR LOSSES. CHOPPY MOVEMENT OVERALL

EUR/USD

Forex News: Friday the pair continued the bearish move started a day before and reached the support at 1.1170. The lack of economic indicators generated a slow trading session, without substantial developments.

Technical Outlook

Currently the pair is showing rejection at 1.1170 support, with the Stochastic in oversold territory and the Relative Strength Index close to oversold. This suggests that today we are likely to see a climb into the 50 period Exponential Moving Average where the next move will be decided: a break will make 1.1240 the target for the day and a bounce will bring price back down into 1.1170 support. As long as the pair is trading below the 50 EMA our bias is bearish.

Fundamental Outlook

Today the focus will be entirely on the technical aspect because the economic calendar lacks major releases for both currencies.

GBP/USD

The pair dropped sharply on news of a hung British Parliament (Conservatives won but did not secure majority), reaching a low of 1.2635 but after the initial move, price retraced and showed choppy action.

Technical Outlook

The move generated by the result of the Elections will probably extend lower in the near future but currently it seems that market participants are reluctant to commit to either side. If the pair climbs, it will encounter resistance at 1.2770, while to the downside 1.2635 is the first hurdle. We may see a slow and choppy session today, until market participants decide the next move, but overall our bias is bearish. Keep in mind that the pair remains high-risk.

Fundamental Outlook

Similar to the other two currencies, the Pound has a light economic calendar ahead, so the technical side will prevail and will be the main price driver.

760

FOREX NEWS: BRITISH CONSUMER PRICE INDEX EYED FOR NEXT POUND MOVE

EUR/USD

Forex News: The economic scene was calm yesterday, without any important releases and this generated slow, choppy movement in the first part of the day. However, in the second part of the trading session the bears stepped in and now rejection is seen at the 50 period EMA.

Technical Outlook

The 50 period Exponential Moving Average proved to be a strong barrier yesterday and stopped a climb seen early during yesterday’s session. For today we expect to see at least an encounter with 1.1170 support, if not a break, but if price moves above the 50 period EMA, we will probably see another break of 1.1240 resistance.

Fundamental Outlook

At 9:00 am GMT the German ZEW Economic Sentiment is released, showing the opinions of about 275 professional German investors and analysts about a 6-month economic outlook. The survey has lost some of its impact lately, but it still remains a noteworthy indicator that can strengthen the Euro if it posts higher numbers than the forecast 21.6.

On the US Dollar side we have the Producer Price Index, released at 12:30 pm GMT and expected to show a change of 0.0% from the previous 0.5%. The index tracks changes in the price that producers charge for their goods and has inflationary implications because a higher producer price will eventually translate into a higher consumer price.

GBP/USD

After a perfect bounce at resistance, the pair resumed downward movement and dropped for more than 100 pips. This shows that the Pound is still affected by the result of the British Parliamentary Elections and calls for further caution.

Technical Outlook

The perfect bounce at 1.2770 resistance made 1.2635 the first target. Once and if price gets here, we will probably see a bounce higher or a period of stagnation, during which the market will decide the next move. If 1.2635 is broken, the next support is located around 1.2570 – 1.2550 but keep in mind that today the Pound will be affected by inflation data and this is likely to be the deciding factor for the next move.

Fundamental Outlook

The main event for the Pound today is the release of the British Consumer Price Index, which is the most important gauge of inflation. Usually this indicator has a strong impact on the currency, with higher numbers strengthening it; today’s forecast is a change of 2.7%, same as previous.

761

FOREX NEWS: ALL EYES ON THE US DOLLAR. MASSIVE MOVEMENT ANTICIPATED

EUR/USD

Forex News: The pair had a slow session yesterday, with price bouncing in a relatively tight range. The 50 period Exponential Moving Average was touched again but the bulls lacked the necessary strength to break it.

Technical Outlook

Some rejection is seen at the 50 EMA but overall, yesterday’s session lacked any conviction and price did not move with a clear bias. The market is likely to remain in a tight range, with low volatility and choppy movement until the U.S. events unfold and afterwards, direction will be determined by their outcome. If price moves into 1.1240 resistance or 1.1170 support before the key events scheduled for today, we expect to see bounces rather than breakouts.

Fundamental Outlook

We have a big day ahead for the US Dollar: at 12:30 pm GMT the U.S. Consumer Price Index is released and expected to post a change of 0.2%, same as previous. This is a key gauge of inflation and usually has a strong impact on the US Dollar, with higher numbers strengthening it. At the same time, the U.S. Retail Sales numbers come out, showing changes in the total value of sales made at retail level. This is another important indicator that can strengthen the greenback if it posts higher numbers. The forecast for today is a change of 0.1% compared to the previous 0.4%.

At 6:00 pm GMT the Fed will announce the interest rate (current <1.00%, forecast <1.25%) along with a FOMC Statement that offers details about the reasons that determined the rate decision. Half an hour later, at 6:30 pm GMT, Fed Chair Yellen will hold a press conference during which she will answer journalists’ questions. All these events have the potential to create very high volatility, so caution is recommended throughout the day.

GBP/USD

The Pound benefited from a better than expected CPI (forecast 2.7%, actual 2.9%) and rallied before reaching the support at 1.2635. Overall the session was bullish but the pair is still under pressure.

Technical Outlook

The positive vibe received by the Pound yesterday, may extend into the resistance located at 1.2770 but we don’t expect to see further upside because if the level is broken, the pair will encounter the 50 period EMA, which will offer another form of resistance. To the downside, 1.2635 remains a strong support but today both currencies in the pair will be affected by important releases, so the technical aspect is secondary.

Fundamental Outlook

The Average Earnings Index is today’s highlight for the Pound. The indicator is scheduled for release at 8:30 am GMT and shows changes in the price that businesses and Government pay for labor. Usually a higher pay means that people will spend more in the near future and this strengthens the Pound; today’s forecast is a change of 2.4%, same as previous.

762

FOREX NEWS: US DOLLAR ERASES LOSSES. SUPPORT TARGETED

EUR/USD

Forex News: The pair climbed before the Federal Funds Rate release, on the back of disappointing values for the U.S. CPI and Retail Sales. However, the Fed increased the rate to <1.25% as expected and Fed Chair Yellen was mostly hawkish during her Press Conference, so the US Dollar erased most of the previous losses.

Technical Outlook

The resistance at 1.1280 was breached yesterday but the bulls couldn’t break the barrier at 1.1300 and a hawkish Yellen press conference fuelled the greenback, erasing almost all losses. Strictly from a technical point of view, the pair is showing clear rejection at 1.1280 resistance and this makes the short term bias bearish. If the pair remains below 1.1240 and below the 50 period Exponential Moving Average, we expect a break of 1.1170.

Fundamental Outlook

The pair will not be affected by major economic indicator releases today, so the main focus will be on the technical aspect. The impact of yesterday’s events will likely extend to today’s trading session.

GBP/USD

Both the Pound and US Dollar were affected by disappointing data during the first part of yesterday’s trading session and this created a lot of back and forth action. Later in the day, Fed Chair Yellen’s speech was the catalyst for a move lower.

Technical Outlook

After breaking 1.2770 resistance and breaching the 50 period EMA, the pair reversed and is now trading below resistance once again. The pair remains volatile and without a clear direction but we believe that the hawkish stance adopted by Fed’s Yellen will generate additional downwards pressure. As long as the pair is trading below the Moving Average and below 1.2770 resistance, our bias is bearish.

Fundamental Outlook

The British Retail Sales are released at 8:30 am GMT, showing changes in the total value of sales made through retail outlets. Usually this indicator has a high impact, and numbers above forecast, which for today is -0.9%, strengthen the Pound.

At 11:00 am GMT the Bank of England will announce the interest rate (no change expected from the current 0.25%), along with the Monetary Policy Summary, which contains insights into the reasons that determined the rate votes. Volatility is likely to surge, especially if there’s a notable change of stance in the MPC members’ votes.

763

FOREX NEWS: US DOLLAR BACK WITH A VENGEANCE, FINISHING THE WEEK LOWER

EUR/USD

Forex News: Yesterday the US Dollar continued the momentum started a day before by the hawkish Yellen press conference and the pair had a strongly bearish session, breaking support decisively.

Technical Outlook

The bears are definitely winning the short term battle on the back of US Dollar strength but the pair is approaching an important hurdle represented by the support at 1.1120. Last time the pair touched this support, it bounced strongly to the upside, so the same scenario may happen again. If that is the case, we will probably see a move into 1.1170, which may turn into resistance. As long as the pair is trading below 1.1170, our bias is bearish, anticipating a move into 1.1075.

Fundamental Outlook

The Euro will be affected today at 9:00 am GMT by the release of the Final version of the Eurozone Consumer Price Index. This is the least important version of the CPI, but still, numbers above the forecast 1.4% can strengthen the currency.

On the US Dollar side we have the University of Michigan Consumer Sentiment, a survey that gauges the opinions of consumers about overall economic conditions. The time of the release is 2:00 pm GMT and the expected number is 97.2; usually a reading above expectations strengthens the greenback.

GBP/USD

The Bank of England kept the rate unchanged as expected, but surprisingly, 3 out of the 8 MPC members voted for an increase. This generated Pound strength but some of the gains were erased soon after.

Technical Outlook

The pair continues to show choppy price action and although volatility is pretty high, the direction is unclear. Yesterday’s price action shows rejection at the 50 period Exponential Moving Average and the pair is trading below 1.2770 resistance but on the other hand, the Pound is fuelled by the hawkish change in stance of the MPC voting members, so overall the pair is in neutral territory. As long as price remains below the 50 EMA, our bias is slightly bearish.

Fundamental Outlook

The United Kingdom didn’t schedule any important releases for today, so the main focus will be on the technical side but the pair will be influenced by the U.S. Consumer Sentiment survey.

764

FOREX NEWS: PRICE REACHES DYNAMIC RESISTANCE. BOUNCE-OR-BREAK SCENARIOS IN PLAY

EUR/USD

Forex News: Friday the US Dollar was weakened by disappointing values for the University of Michigan Consumer Sentiment survey and the Building Permits, so overall the pair showed bullish price action, reaching the 50 period Exponential Moving Average.

Technical Outlook

After coming close to 1.1120 support, price started to climb and stopped at the 50 EMA; however, this happened because the markets closed for the weekend, so we cannot say for sure if we are dealing with rejection or if the pair will continue upwards. The question will be answered today: a break will make 1.1240 the first target, while a bounce lower will take price into 1.1170 and possibly 1.1120. We slightly favour a move lower because lately the pair has been under bearish pressure.

Fundamental Outlook

The economic calendar lacks major events for both currencies in the pair, so the technical aspect will prevail. It must be noted however that FOMC Member Dudley will speak at 12:00 pm GMT and FOMC Member Evans will speak at 11:00 pm GMT and this could generate increased volatility but the impact depends on the matters discussed and cannot be anticipated.

GBP/USD

Price continued its choppy movement Friday and breached the 50 period Exponential Moving Average only to return below it almost immediately. Overall we didn’t see clear determination from either part, and the pair is mostly ranging.

Technical Outlook

The last candles are showing long wicks, mostly in their upper side, which is a sign of rejection. This makes us anticipate a drop below 1.2770 if the 50 period EMA is not broken. However, the pair lacks clear direction so we cannot rule out a bullish move, which will probably find resistance at 1.2820. Overall, we expect a slow trading session today.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected today by major economic releases, so the main focus will be on the technical side.