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765

FOREX NEWS: US DOLLAR SHOWS RECOVERY SIGNS. SUPPORT IN DANGER

EUR/USD

Forex News: Yesterday the fundamental scene lacked any major releases and Mondays are typically slow days, so all this translated into slow trading, with price confined in a 50 pip range for most of the say.

Technical Outlook

Although yesterday the pair didn’t cover a lot of distance, it is now clear that the 50 period Exponential Moving Average is providing a strong resistance, rejecting price lower. If 1.1170 support can be broken decisively, we expect to see a move into 1.1120 but we cannot exclude the possibility of a bounce at 1.1170 and a move above the 50 EMA. If this is the case, then 1.1240 will become the first target. As long as the pair is trading below the 50 EMA the bias is slightly bearish but neither side is in clear control.

Fundamental Outlook

FOMC Member Fischer will speak today at 12:00 pm GMT and later at 7:00 pm GMT, FOMC Member Kaplan will speak at a different venue. These speeches are the only notable events for today but we don’t expect them to trigger huge movement unless surprising matters are discussed.

GBP/USD

Trading remained choppy yesterday, as the pair continued to print candles with long wicks, showing indecision. However, later in the day the bears managed to take control and to take the pair below 1.2770.

Technical Outlook

The bearish momentum started yesterday is likely to continue during today’s session and we may see a move closer to 1.2690 but that target will not be reached during the course of one day probably, considering the lack strong movement seen during the last period. The Pound is under bearish pressure but it remains high-risk due to Brexit negotiations and an uncertain political scene.

Fundamental Outlook

Today at 7:30 am GMT, BOE Governor Mark Carney will speak at the Mansion House dinner, in London. The Pound is likely to show increased volatility at the time and as always, caution should be used when heads of central banks speak publicly.

766

FOREX NEWS: US DOLLAR RULES THE ACTION, POUND WEAKENED BY CARNEY’S COMMENTS

EUR/USD

Forex News: The pair had a choppy session yesterday but overall the bears won the battle and broke 1.1170 after the bounce at the 50 period Exponential Moving Average.

Technical Outlook

The next destination seems to be the support located at 1.1120, followed by 1.1075. The market has a bearish bias and the US Dollar is strengthening but a clear trend is not in place, so we will probably see moves to the north when price encounters support and the Relative Strength Index becomes oversold. As long as these potential rallies don’t extend past the 50 period EMA, our bias remains bearish.

Fundamental Outlook

The economic scene remains slow today, with the U.S. Existing Home Sales being the only notable release. The indicator shows the annualized number of houses sold during the reported month (excluding new houses) and has a medium impact on the US Dollar. The time of the release is 2:00 pm GMT and the expected number is 5.54 million.

GBP/USD

The Pound was weakened by dovish comments made by BOE Governor Carney during his speech at the Mansion House, so the pair showed a strongly bearish session yesterday, breaking the first support and even breaching 1.2635.

Technical Outlook

The minor support at 1.2690 was easily broken yesterday and the pair continued through the more important 1.2635. Now the next destination is 1.2570 and once price gets there, we anticipate a move higher due to the oversold condition of the Relative Strength Index and the fact that the pair traveled a long distance south in a relatively short period of time, without retracement.

Fundamental Outlook

Today’s highlight for the Pound will be the release of the British Public Sector Net Borrowing, an indicator that shows the difference between spending and income for the public sector. A negative number shows excess and a positive number shows deficit; today’s forecast is a deficit of 7.3 billion, while the previous was 9.6 billion and usually a lower number strengthens the Pound but the impact is often mild. The time of release is 8:30 am GMT.

767

FOREX NEWS: POUND RATE HIKE SPECULATION BACK IN THE SPOTLIGHT

EUR/USD

Forex News: Price action remained slow yesterday, mostly due to the lack of major economic releases, but the pair reached 1.1120 target almost to the pip and then retraced higher.

Technical Outlook

The pair is still trading below the 50 period Exponential Moving Average and below 1.1170, so the bias remains negative, anticipating a break of 1.1120, followed by a move into 1.1075. It must be noted that 1.1120 acted as solid support yesterday, pushing price higher as soon as it was touched, so this level will probably play an important role in today’s price action. The way price behaves near it will determine the next direction: a break will show bearish pressure, while another bounce at this level will establish it as strong support and will probably take the pair into the 50 EMA.

Fundamental Outlook

Similar to the rest of the week, today is a slow day in terms of economic indicators. The only notable release is the U.S. Unemployment Claims, scheduled at 12:30 pm GMT and expected to post a reading of 241K. Higher numbers usually weaken the US Dollar but the impact is low-to-medium because the indicator is released weekly.

GBP/USD

The Pound strengthened yesterday, after Queen Elizabeth said that the government’s priority is securing the best Brexit deal. Also, BOE Chief Economist Haldane renewed hopes of a rate hike sooner rather than later and this was another catalyst behind yesterday’s spike.

Technical Outlook

The pair spiked higher mostly due to the fundamental reasons outlined above but it bounced lower after reaching the psychological level at 1.2700. As seen from yesterday’s price action, the Pound can become very volatile, depending on any news, speculation or rumours regarding Brexit or rate hikes, so we recommend caution and we consider this pair high-risk. As long as the pair remains below the 50 EMA our bias is bearish but a break above 1.2690 – 1.2700 will probably trigger a move above the moving average.

Fundamental Outlook

The United Kingdom didn’t schedule major economic indicators for today, so the technical aspect will prevail, assuming there are no other surprises.

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768

FOREX NEWS: RESISTANCE HOLDS. PREPARING FOR ANOTHER BIG DROP?

EUR/USD

Forex News: The pair climbed into 1.1170 resistance but there it paused and started to move lower. Rejection is present at support as well as resistance, so the control doesn’t clearly belong to either side.

Technical Outlook

Price reacts almost perfectly to support and resistance as seen from the latest price action (it bounced at 1.1120 and stopped at 1.1170) but the pair is still trading below the 50 period Exponential Moving Average, so our outlook remains bearish, anticipating a break of 1.1120 and a move into 1.1075. If the buyers can break the confluence zone created by the 50 EMA and by 1.1170 resistance, this will show bullish pressure and will make 1.1240 the target for the days to come.

Fundamental Outlook

At 8:00 am GMT the Euro will be affected by the release of the Eurozone Manufacturing PMI, which is a survey of about 3,000 purchasing managers from the manufacturing sector, regarding economic health and overall business conditions in the said sector. The forecast is 56.9 and usually, higher numbers strengthen the Euro. At the same time the Services PMI is released, with an expected reading of 56.2.

On the US Dollar side we have the New Home Sales, scheduled for release at 2:00 pm GMT and expected to show a reading of 599K. The indicator shows the annualized number of houses sold during the reported month but the impact is usually low.

GBP/USD

The pair slowed down after the spike seen a day before but it must be noted that the bulls couldn’t continue the momentum and price slowly descended throughout yesterday’s session.

Technical Outlook

The resistance at 1.2690 – 1.2700 is holding and the bullish momentum seems to have faded because for an entire day the pair didn’t even try to retest the previous high. If price remains below 1.2690, today we expect to see a drop below 1.2635. The overall picture is bearish but the pair lacks determination and price action is choppy.

Fundamental Outlook

The Pound will not be affected by major economic releases today, so the pair’s movement will be decided mainly by the technical side.

769

FOREX NEWS: THE EURO SHOWS MILD STRENGTH AHEAD OF ECB’S FORUM ON CENTRAL BANKING

EUR/USD

Forex News: European PMI values were mixed Friday but the pair had a bullish day nonetheless, mostly on the back of US Dollar weakness. The pair is now trading above previous resistance and the short term bias is bullish.

Technical Outlook

The 50 period Exponential Moving Average and the resistance at 1.1170 were broken decisively Friday and this makes us anticipate a climb into 1.1240, followed by a small bounce lower. The Relative Strength Index will probably become overbought by the time price reaches the mentioned resistance and a clear trend is not in place, so an overbought oscillator is likely to trigger a move lower. If the pair doesn’t reach the mentioned target and instead starts to move lower, we expect a touch of 1.1120 today or possibly tomorrow.

Fundamental Outlook

Today’s first release is the German IFO Business Climate, a survey with a very large sample of about 7,000 businesses that tries to gauge the respondents’ opinions regarding economic conditions, as well as a 6-month outlook. The time of the release is 8:00 am and the expected reading is 114.7; higher numbers show optimism and usually strengthen the currency.

Later in the day, at 12:30 pm GMT the U.S. Durable Goods Orders are released, showing changes in the total value of orders placed for goods with a life expectancy of at least 3 years. A higher change than the forecast 0.4% suggests increased economic activity and usually strengthens the US Dollar.

The European Central Bank Forum on Central Banking starts today in Portugal and ECB President Mario Draghi will deliver an opening statement at 5:30 pm GMT. The Euro may react strongly to his speech, so caution is recommended.

GBP/USD

Friday the pair had a bullish bias and climbed above the 50 period Exponential Moving Average but started to show indecision after breaking this resistance. Overall price action remains choppy and without clear direction.

Technical Outlook

The move above 1.2690 and above the 50 period Exponential Moving Average opens the door for a touch of 1.2770, but as seen from Friday’s price action, the last few candles are showing long wicks and this is a sign of indecision. As long as the pair is trading above the 50 EMA our bias is slightly bullish but given the current situation, a drop could happen anytime.

Fundamental Outlook

There are no notable indicators on the Pound’s economic calendar for today so the pair’s direction will be mostly decided by the U.S. Durable Goods and the technical aspect.

770

FOREX NEWS: THREE KEY SPEECHES, THREE HUGE REASONS FOR VOLATILITY

EUR/USD

Forex News: The German IFO Business Climate survey posted a better than expected value, while the U.S. Durable Goods Orders disappointed, so the Euro won yesterday’s battle with the US Dollar and the pair finished higher.

Technical Outlook

Yesterday the pair descended, touching 1.1170 to the pip and then bouncing higher. This established the level as support and makes the short term bias bullish, with 1.1240 as first target. If and when the pair touches the mentioned resistance, we expect to see a pullback, mainly because the Relative Strength Index will become overbought and the pair is not in a strong trend.

Fundamental Outlook

Early at 8:00 am GMT, ECB President Mario Draghi will speak in Portugal at the European Central Bank Forum on Central Banking. We don’t know how this speech will affect the currency but caution is recommended every time heads of central banks speak publicly.

On the US Dollar side we have the U.S. Consumer Confidence survey, scheduled for release at 2:00 pm GMT. The forecast for this survey is 116.2 (previous 117.9) and a higher value shows increased consumer confidence and possibly higher consumer spending levels in the near future; this in turn strengthens the US Dollar but the impact is not huge.

The final event of the day is a speech of Fed Chair Yellen, focused on global economy and delivered at the British Academy ‘President’s Lecture’, in London. The scheduled time is 5:00 pm GMT.

GBP/USD

The pair showed choppy price action yesterday, first dropping below the 50 period Exponential Moving Average and then immediately jumping higher, close to the high of the day.

Technical Outlook

Even if the bears didn’t manage to break the 50 period EMA, the current move up lacks strength and seems exhausted. That’s the main reason why today we expect to see another attempt to break the Moving Average, and possibly a move into 1.2690. If price remains above the 50 EMA, the most likely target is 1.2770 but we don’t expect a break unless Carney’s press conference triggers Pound strength.

Fundamental Outlook

At 9:30 am GMT the Bank of England will release the Financial Stability Report and half an hour later BOE Governor Mark Carney will hold a press conference, discussing the Report. These two events call for caution because they could easily trigger volatility and possibly erratic price action.

771

FOREX NEWS: IMF CUTS U.S. GROWTH FORECAST, US DOLLAR TAKES THE BLOW

EUR/USD

Forex News: ECB President Mario Draghi mentioned during yesterday’s speech the he sees Eurozone growth and that all signs point towards a broadening recovery. On the other hand, the IMF has cut U.S. growth expectations and all this triggered Euro strength and US Dollar weakness, resulting in a huge move up.

Technical Outlook

The pair reached the 1.1300 mark but retraced lower and is trading below 1.1280 at the time of writing. We will most likely see another push higher, into 1.1300 and possibly 1.1340 but it must be noted that the Relative Strength Index has moved into overbought territory and also that usually, fast moves tend to be followed by a pullback. However, we don’t expect this pullback to extend below support as the current outlook is bullish.

Fundamental Outlook

Today at 1:30 pm GMT, ECB President Mario Draghi will participate in a panel discussion at the European Central Bank Forum on Central Banking, alongside other heads of central banks. Yesterday his speech generated a lot of volatility, so caution is recommended today as well.

GBP/USD

US Dollar weakness was seen against the Pound as well, and the pair climbed for most of yesterday’s session, testing 1.2770 resistance.

Technical Outlook

The 50 period Exponential Moving Average provided good support yesterday and the pair moved into the resistance at 1.2770 but this level is not yet clearly broken. When and if price will surpass this resistance, we expect to see a move into 1.2800 – 1.2820 but once it gets there, the chances of a retracement will increase. If the pair moves below 1.2770, we expect to see a move into the 50 EMA but our bias is mostly bullish.

Fundamental Outlook

At 1:30 pm GMT, Bank of England Governor Mark Carney will participate in the same panel discussion as ECB President Mario Draghi. Caution is recommended as the Pound may see some strong movement at the time of the discussions.

772

FOREX NEWS: EURO AND POUND BREAK KEY RESISTANCE LEVELS FUELLED BY DRAGHI AND CARNEY HAWKISH COMMENTS

EUR/USD

Forex News: The pair dipped yesterday, as it was expected after a big climb but the Euro bulls quickly stepped in and erased the drop. ECB President Draghi made hawkish comments at the ECB Forum and this aided the climb.

Technical Outlook

The pair reached multi-month highs, trading now above 1.1340 and heading towards 1.1400. The picture is very much bullish and we expect price to continue upwards until 1.1400 is reached but there we expect to see a pause or probably a move lower. The Relative Strength Index is deep in overbought territory and the pair is facing a strong resistance zone between 1.1400 and 1.1450.

Fundamental Outlook

At 12:00 pm GMT the Euro will be affected by the release of the German Preliminary Consumer Price Index. This is the main gauge of inflation for the German economy and usually has a high impact on the Euro; the forecast is a change of 0.0% from the previous -0.2% and higher numbers generate Euro strength under normal circumstances.

On the US Dollar side we have the Final version of the U.S. Gross Domestic Product, scheduled at 12:30 pm GMT and expected to show a 1.2% change, same as previous. This is the main gauge of overall economic performance but the Final version is the last one released and tends to have a diminished impact.

GBP/USD

The Pound had a tremendous day yesterday after BOE Governor Mark Carney said in a panel discussion that some stimulus removal may be necessary. The pair posted a huge climb and broke several resistance levels.

Technical Outlook

After a small bounce lower at 1.2850 resistance, price climbed, fuelled by hawkish comments made by the Bank of England Governor. The current strength is likely to extend into 1.2975 – 1.3000 but a retracement should follow pretty soon considering that huge moves like the one seen yesterday are usually followed by a pullback. The bias is definitely bullish but be wary of retracements.

Fundamental Outlook

The British Net Lending to Individuals comes out at 8:30 am GMT, showing changes in the total value of consumer credit. A higher value than the forecast 4.0 Billion is usually beneficial for the Sterling, but the impact is low to medium.

773

FOREX NEWS: DEEP OVERBOUGHT LEVELS CALL FOR PULLBACKS

EUR/USD

Forex News: The Euro and the US Dollar both benefited from better than expected data yesterday and this created a slower session, with price oscillating in a 50 pip range.

Technical Outlook

Yesterday’s price action created a minor resistance at 1.1435 but also established 1.1400 as support. A break of either one of these levels will probably trigger additional movement in that direction but the pair is in a strong uptrend, so a break of support will not extend very low. To the upside the next resistance and target is located around 1.1450. Our overall bias remains bullish but the RSI is extremely overbought and this calls for a retracement.

Fundamental Outlook

Today at 9:00 am GMT we take a look at Eurozone inflation with the release of the European CPI Flash Estimate. The report uses data from 13 member states that report CPIs earlier and tends to have a significant impact on the Euro. The forecast is a change of 1.2% (previous 1.4%) and under normal circumstances, higher numbers strengthen the currency.

At 1:45 pm GMT the Chicago PMI comes out, showing the opinions of about 200 purchasing managers from the Chicago area regarding overall business conditions. The impact is medium but numbers above the forecast 58.1 show optimism and usually strengthen the greenback.

GBP/USD

The Pound continued to strengthen and the US Dollar to weaken so yesterday the pair continued on an upwards path, reaching the key resistance at 1.3000.

Technical Outlook

The current level is very important from a technical perspective (previous resistance) as well as psychological perspective (big, round number) and the Relative Strength Index is deep in overbought territory. All these factors make us anticipate a retracement lower during today’s session but keep in mind that the pair still has bullish momentum so a break of resistance is not out of the question.

Fundamental Outlook

The British Current Account is today’s main highlight for the Pound. The indicator shows the difference in value between imports and exports and strengthens the currency if it posts a higher than expected reading. The time of release is 8:30 am GMT and today’s forecast is -17.2 Billion, while the previous was -12.1 Billion.

774

FOREX NEWS: POUND GETS READY FOR ANOTHER VOLATILITY WAVE: BOE’S CARNEY TO SPEAK IN FRANKFURT

EUR/USD

Forex News: Friday price action slowed down and the pair retraced to test 1.1400, turning it into support. Overall the fundamental scene was calm, with positive data for both currencies but nothing to really shake the market.

Technical Outlook

After coming very close to the key resistance at 1.1450, the pair moved lower and found support at 1.1400. Price is likely to continue higher after the bounce at support but if the minor resistance around 1.1435 cannot be easily broken, we may experience a drop below 1.1400. Today we expect to see either a slow, ranging session or a bearish bias but overall the pair is clearly bullish.

Fundamental Outlook

The U.S. Manufacturing PMI will be released at 2:00 pm GMT and expected to show a value of 55.0. The survey acts as an indicator of optimism and usually a higher number is beneficial to the US Dollar but the impact is not always notable.

GBP/USD

After a dip below support, the Pound rallied again and closed last week above the key psychological resistance at 1.3000, helped by US Dollar weakness seen across the board.

Technical Outlook

Friday the pair reversed an earlier drop and is now trading above the important level at 1.3000, a fact that opens the door for a move into the long term resistance at 1.3050. The Relative Strength Index and Stochastic are still overbought and this means that upside movement should be limited and possibly followed by a drop. It is very likely to see a ranging session because Mondays are often slow days but if BOE Governor Carney shows a hawkish stance, we may get another push higher.

Fundamental Outlook

The Pound’s movement will be influenced by the British Manufacturing PMI, scheduled at 8:30 am GMT. Similar to the U.S. indicator with the same name, this survey can strengthen the currency if it posts a higher reading than today’s forecast of 56.4.

At 12:00 pm GMT, Bank of England Governor Mark Carney will speak in Frankfurt at the Financial Stability Board. The impact of this speech depends on the matters discussed and Carney’s attitude but as always when heads of central banks speak, caution is recommended.

775

FOREX NEWS: RETRACEMENTS UNDERWAY, US DOLLAR AFFECTED BY INDEPENDENCE DAY

EUR/USD

Forex News: The bulls couldn’t push price higher and instead the pair dropped through 1.1400, starting a much needed retracement. U.S. Manufacturing data was better than expected and strengthened the US Dollar, helping the drop.

Technical Outlook

The pair had reached deep overbought levels and traded there for quite a while so the current move down can be considered a necessary retracement. It is very likely to see an encounter with 1.1340 – 1.1350 or even with the 50 period Exponential Moving Average but the overall picture remains bullish. Price action will be most likely affected by Independence Day, so we recommend caution.

Fundamental Outlook

Today the United States celebrates Independence Day, so banks will be closed and volatility will be affected most likely, especially during the NY session. On the Euro side, things are calm as well, without any major indicator releases.

GBP/USD

The Pound took a blow from weaker than expected numbers for the Manufacturing sector (forecast 56.4, actual 54.3) and this allowed the pair to dip back below the key psychological level at 1.3000.

Technical Outlook

The pair returned below 1.3000 after trading in overbought territory and is now headed towards 1.2900, with both oscillators showing good downwards momentum. The short term bias is bearish but overall the strength belongs to the bulls so we don’t expect to see a move below the 50 period Exponential Moving Average. Keep in mind that price can shoot up even before reaching 1.2900 or the 50 EMA and that today’s bias will be affected by Independence Day.

Fundamental Outlook

At 8:30 am GMT the British Construction PMI comes out, showing the opinions of purchasing managers regarding business conditions in this sector. A higher number usually strengthens the Pound but the impact is higher if the actual reading is further away from analysts’ forecast, which for today is 55.2.

776

FOREX NEWS: BOUNCE OR BREAK SCENARIOS IN PLAY, FOMC MINUTES EYED FOR NEXT MOVE

EUR/USD

Forex News: Yesterday’s trading session was very slow, partly because the United States celebrated Independence Day and this generated thin liquidity.

Technical Outlook

Although it was a slow session, the pair reached the support at 1.1340 and came very close to the 50 period Exponential Moving Average. This means that today we are faced with a “bounce-or-break” scenario and its outcome will determine the next short term direction: a bounce will suggest a resumption of the bullish trend, while a break of this support zone will open the door for a move into 1.1280.

Fundamental Outlook

The FOMC Meeting Minutes will be released today at 6:00 pm GMT and will be the main event for the US Dollar. The document shows the details of the latest rate meeting and the reasons that generated the rate vote; usually the impact is very high if the Minutes contain hints about future monetary policy direction.

GBP/USD

Similar to the other pair, the Cable showed slow and choppy movement yesterday. The British Construction PMI came very close to analysts’ forecast, so the release didn’t create a lot of volatility.

Technical Outlook

The short term bias remains bearish for the time being and we expect to see an encounter with 1.2900 support. By the time price gets there, the 50 period Exponential Moving Average will probably climb and will form a confluence zone together with 1.2900. Confluence zones are tough to break but if price does move past them, this shows good momentum in the direction of the break, so maybe we will see an extended move into 1.2850. The overall bias is still bullish so we cannot rule out a quick move into 1.3000 area.

Fundamental Outlook

The British Services PMI is the last in this week’s series and will be released at 8:30 am GMT, with an expected value of 53.6, similar to the previous 53.8. This is a survey of purchasing managers from the Services sector that acts as a leading indicator of economic health and optimism. Usually a higher number is beneficial for the Pound but if the actual reading matches the forecast, the impact is limited.

777

FOREX NEWS: DOLLAR REACTS POSITIVELY TO THE FOMC MINUTES. MORE DOWNSIDE TO FOLLOW?

EUR/USD

Forex News: The US Dollar strengthened ahead of the FOMC Minutes release and the pair broke through support. The Minutes added greenback strength and the pair returned below 1.1340 after a brief climb.

Technical Outlook

At the time of writing the pair is showing signs of indecision (candles with long wicks) and is trading very close to the 50 period Exponential Moving Average, so a clear bias is not in place. However, it seems the US Dollar is reacting positively to the FOMC Minutes and the pair is coming down after an extended period of being overbought, so we can expect a touch of 1.1280 as long as the bears can keep price below the 50 EMA.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look at the American jobs situation with the release of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the farming sector and Government. The forecast is 184K, lower than the previous 253K and usually, numbers above expectations strengthen the US Dollar but the impact is lower than the Non-Farm Payrolls released Friday.

GBP/USD

The British Services PMI released yesterday came very close to analysts’ forecast, so the impact was low and the pair had a slow trading session until the release of the FOMC Minutes. Some US Dollar strength was seen but the pair is still above support.

Technical Outlook

Several four hour candles have touched the support at 1.2900 and were rejected there, creating long wicks in their lower side. This is a sign of bullish pressure, so if we don’t see a break of support soon, we expect the pair to climb towards 1.2975 – 1.3000. If the level at 1.2900 and the 50 period Exponential Moving Average are broken soon, we will probably see a touch of 1.2850. Our bias is mostly neutral until this bounce-or-break scenario unfolds.

Fundamental Outlook

The United Kingdom didn’t schedule major releases for today so the pair’s direction will be mostly decided by the technical aspect and the U.S. jobs data.

778

FOREX NEWS: ALL THE INGREDIENTS FOR A WILD DAY: U.S. NFP RELEASE AND TRUMP – PUTIN FIRST MEETING

EUR/USD

Forex News: The bears ran out of steam before breaking the 50 period Exponential Moving Average and the pair made a run for 1.1400 resistance, generating a session controlled by the buyers. The ADP Non-Farm Employment Change showed lower numbers than analysts had anticipated and this weakened the US Dollar, contributing to the pair’s climb.

Technical Outlook

After showing long candle wicks (sign of rejection) at the 50 period Exponential Moving Average, the pair climbed into the first resistance located at 1.1400. A big part in the climb was played by the lower than expected reading showed by the ADP Non-Farm Employment Change but technical reasons contributed as well. Today’s direction will be mainly decided by the Non-Farm Payrolls report and until its release, we expect to see choppy price action, near 1.1400.

Fundamental Outlook

Today at 12:30 pm GMT the most important U.S. report of the week will be released: the Non-Farm Payrolls. The indicator is released monthly and shows changes in the total number of employed people, excluding the farming sector. This is widely considered the most important data for the U.S. jobs market, with a strong impact on the US Dollar; usually a higher than anticipated reading strengthens the currency. The forecast for today is 175K, higher than the previous 138K.

Today Presidents Trump and Putin will have their first official meeting at the G20 Summit and this definitely calls for caution because we don’t know how the market will react.

GBP/USD

Yesterday the US Dollar weakened when the U.S. employment numbers were released but the Pound’s gains were quickly erased and the pair dropped back to the levels where the climb originated, generating a choppy session overall.

Technical Outlook

The pair is bouncing between the resistance at 1.2975 – 1.3000 and the support at 1.2900 but a break of either one will be decided by the fundamental side. The U.S. jobs data will have a direct and probably high impact on the pair’s movement and also the Trump – Putin meeting may be a reason for strong movement. Until these events occur, movement will likely be choppy and unclear.

Fundamental Outlook

Bank of England Governor Mark Carney will speak at the G20 Meetings today but the exact time is not known so we recommend caution throughout the day.

779

FOREX NEWS: SOLID U.S. EMPLOYMENT READINGS BOOST THE US DOLLAR. SUPPORT THREATENED

EUR/USD

Forex News: The Non-Farm Payrolls showed a better than expected value Friday but the Average Hourly Earnings decreased, so the US Dollar had a mixed reaction, first weakening and then erasing all the losses. The pair finished last week close to support but without a clear bias.

Technical Outlook

After a spike that took price close to 1.1450, the pair moved below 1.1400 and then reversed again, finishing last week very close to this support/resistance level. This type of movement shows that the pair is in an indecision phase and that control doesn’t clearly belong to either side. For today we favour a move below 1.1400, but not a break of the 50 period Exponential Moving Average; we may also get a slow, ranging session sue to the lack of major releases.

Fundamental Outlook

The only notable release of the day is the Sentix Investor Confidence, scheduled at 8:30 am GMT. This is a survey of about 2,800 analysts and investors that tries to rate their opinions regarding a 6-month outlook for the Eurozone. The forecast is 28.1 and a higher number shows optimism, strengthening the Euro but the impact is often low.

GBP/USD

Friday a weak Pound couldn’t do much against the US Dollar that was boosted by the solid NFP reading, so the pair bounced at 1.2975 and broke below horizontal support and below the 50 period Exponential Moving Average.

Technical Outlook

Friday’s price action shows that the Pound is weak against the US Dollar and makes us anticipate a move into 1.2850. When or if the oscillators become oversold, we expect to see a climb that will find resistance around 1.2900 but overall we consider that today will be a slow and ranging session, mostly because no major indicators will be released.

Fundamental Outlook

The economic calendar for the Pound is blank today, so the pair’s direction will be decided by the technical aspect.

780

FOREX NEWS: US DOLLAR GAINS MOMENTUM, AMID A LACKLUSTRE FUNDAMENTAL SCENE

EUR/USD

Forex News: Yesterday the bears took control of the pair and managed to take price below the support at 1.1400. However, price didn’t travel a long distance and the picture is still mixed.

Technical Outlook

The pair is under bearish pressure and we consider the short term bias bearish, anticipating a move at least into the 50 period Exponential Moving Average. If this barrier is broken, then the next target will become 1.1340 but given the slow fundamental environment, it’s likely that this horizontal support will not be reached today. To the upside, resistance sits at 1.1450 but a move into this area is less likely for today.

Fundamental Outlook

The only notable event of the day is the release of the U.S. JOLTS Job Openings, scheduled at 2:00 pm GMT and expected to show a reading of 5.89 million. The report shows how many new jobs are available during the reported month, excluding the farming sector; a higher number is beneficial for the US Dollar but the impact is usually low.

GBP/USD

The US Dollar won the fight against the Pound yesterday and the pair dropped after a timid climb. The fundamental scene was lacklustre but Friday’s better than expected NFP probably extended its effects to yesterday’s trading session.

Technical Outlook

After the dip below 1.2900 support, the pair climbed to re-test this level and bounced lower, thus confirming it as resistance. Price is also trading below the 50 period Exponential Moving Average, so the short term bias is bearish, anticipating a touch of 1.2850 in the very near future. The Relative Strength Index is approaching oversold and the Pound still has underlying strength, so we may very well see a bounce higher once the mentioned target is reached.

Fundamental Outlook

The Pound has a light economic calendar today, without any notable releases, so the deciding factor for direction will probably be the technical aspect.

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FOREX NEWS: HEADS UP: FED CHAIR YELLEN TESTIFIES, US DOLLAR SET FOR STRONG MOVES

EUR/USD

Forex News: Price action remained slow during yesterday’s trading session, with just a small move above 1.1400. The lacklustre economic calendar contributed to the low volatility.

Technical Outlook

Even if volatility remained low for most of yesterday’s trading session, it is now becoming clearer that the US Dollar lacks the strength to break the 50 period Exponential Moving Average or even 1.1400 decisively, at least for the time being. If the pair remains above 1.1400, we may see a touch of 1.1450 but the direction of the US Dollar may be heavily influenced by Janet Yellen’s testimony.

Fundamental Outlook

Today’s highlight is Fed Chair Yellen’s testimony before the House Financial Services Committee, scheduled at 2:00 pm GMT. The topic is the Semiannual Monetary Policy Report and the text of the testimony will be released 90 minutes prior but during the session, she will answer questions asked by the Committee members, and this is when volatility on US Dollar pairs will increase, so caution is recommended.

GBP/USD

The pair dipped lower after an initial climb above resistance, and headed into the support at 1.2850. Volatility was high yesterday and we are now seeing increased momentum to the downside.

Technical Outlook

What looked like a clear break of the 50 period EMA and the resistance at 1.2900 turned to be a fake move, followed by a fast drop into the key support at 1.2850. If this level will be broken today, we will probably see a move into 1.2800 and possibly 1.2770 but a lot will depend on the British wages data and Yellen’s testimony. To the upside, the first barrier is represented by the confluence zone created by the 50 EMA and 1.2900 resistance.

Fundamental Outlook

At 8:30 am GMT the Average Earnings Index comes out, showing changes in the price paid for labor by the Government and businesses. A higher hourly wage indicates that people may start to spend more in the near future, and this usually strengthens the Pound. Today’s forecast is a change of 1.8%, lower than the previous 2.1%.

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FOREX NEWS: DOLLAR BOOSTED BY HAWKISH YELLEN TESTIMONY. SUPPORT THREATENED

EUR/USD

Forex News: Most of yesterday’s trading session was bearish but the Dollar really took off during Fed Chair Yellen’s hawkish speech. The pair reached horizontal support and the 50 period Exponential Moving Average.

Technical Outlook

The sellers are facing an important barrier at 1.1400 and the 50 period EMA. As long as this zone is not clearly broken, we can still consider the current move a retracement in an uptrend but if the barrier will be broken, we expect to see a drop into 1.1340. Given the US Dollar strength seen yesterday and the overextended condition of price on a Daily chart, we favour a drop through the current support.

Fundamental Outlook

First release of the day is the U.S. Producer Price Index, an indicator that shows changes in the price charged by producers for the goods they sell. A higher producer price leads to a higher consumer price, thus a higher inflation and this usually strengthens the US Dollar. Today’s forecast is a change of 0.0%, same as previous and the time of release is 12:30 pm GMT.

At 2:00 pm GMT, Fed Chair Yellen will testify again on the Semiannual Monetary Policy Report, this time before the Senate Banking Committee. This testimony should be treated with caution because it can spark strong movement on USD pairs.

GBP/USD

Yesterday the Pound was strengthened by better than expected employment data and the pair climbed above resistance, breaching the 50 period Exponential Moving Average. Janet Yellen’s testimony erased some of the US Dollar losses but the effect wasn’t substantial.

Technical Outlook

The level at 1.2815 has become support as seen from yesterday’s price action, but the buyers couldn’t break the confluence zone created by 1.2900 and the 50 period Exponential Moving Average. The last 4 hour candle is showing a long wick in its upper part, suggesting rejection, and this increases the chances of a bounce lower, into 1.2850. On the other hand, the RSI is bouncing from its oversold level and this increases the chance of a continued move higher. Overall the picture is mixed and the way price behaves around the current resistance will decide the next move.

Fundamental Outlook

The economic calendar is light for the Pound, so the pair’s direction will be decided by the technical aspect and by the U.S. events mentioned above.

784

FOREX NEWS: U.S. INFLATION DATA AND RETAIL SALES – TWO POTENTIAL MARKET MOVERS

EUR/USD

Forex News: The testimony of Fed Chair Yellen was shifter 30 minutes earlier yesterday but overall the event did not have a huge impact on the US Dollar. The pair dropped through the 50 period EMA but recovered soon after.

Technical Outlook

After the first drop into 1.1400, price climbed into 1.1450 and then bounced lower from there, threatening support again. This “yo-yo” behaviour is likely to end today and we will probably see a break outside the range seen over the last few days. It seems like bearish pressure is increasing but there’s a huge wick in the lower side of the last closed candle and this suggests strong rejection, so probably the day’s direction will be decided by the fundamental side.

Fundamental Outlook

The focus will remain today on the US Dollar for the release of two key indicators: the Consumer Price Index (CPI), which is a main gauge of inflation and the Retail Sales, which represent the major part of overall consumer spending.

The CPI is expected to show a change of 0.1% (previous -0.1%) and the Retail Sales a change of 0.1% compared to the previous -0.3%. Both indicators come out at 12:30 pm GMT and higher than anticipated numbers for either of them are usually beneficial for the US Dollar.

GBP/USD

Yesterday belonged mostly to the bulls and price remained above the 50 period Exponential Moving Average. Janet Yellen’s testimony brought the pair slightly lower but nothing substantial.

Technical Outlook

As long as the pair is trading above the 50 EMA and the Relative Strength Index is not overbought, we expect the current move to extend into 1.2975 – 1.3000 area. If price gets there, by that time the RSI will probably become overbought and this will likely generate a bounce lower because price is not in a strong trend. If 1.2900 is broken to the downside, we will probably see a move closer to 1.2850.

Fundamental Outlook

Today direction will be mainly influenced by the United States economic indicators as the United Kingdom didn’t schedule any important releases for the last day of the week.

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FOREX NEWS: US DOLLAR ON THE ROPES AGAIN, WEAK ACROSS THE BOARD. WHAT’S NEXT?

EUR/USD

Forex News: The Dollar took a blow Friday from a weaker than expected Consumer Price Index (actual 0.0%, forecast 0.1%) and disappointing numbers for the Retail Sales (actual -0.2%, forecast 0.1%). These numbers were the main reason behind Friday’s climb and break of resistance.

Technical Outlook

After the failed break of the 50 period Exponential Moving Average, the pair headed straight for the resistance at 1.1450 and surpassed it, on the back of weak U.S. economic data. For today we expect an encounter with last week’s high located at 1.1490, but a strong move above 1.1500 is less likely, mostly because the Relative Strength Index is approaching overbought and usually Mondays are slow days. As long as 1.1490 – 1.1500 remains resistance, we expect ranging movement.

Fundamental Outlook

We have a slow day for both currencies from a fundamental standpoint, with the only notable release being the Eurozone Final CPI, scheduled at 9:00 am GMT and expected to show a value of 1.3%, same as previous. The Final version is the least important, but higher numbers can bring Euro strength, taking the pair higher.

GBP/USD

The Pound bulls capitalized on the US Dollar weakness Friday and the pair climbed more than 150 pips, breaking several resistance levels. The outlook is now bullish but the pair has become overbought.

Technical Outlook

Price stopped at 1.3100 resistance but it’s not clear whether this happened because the markets closed for the weekend or because the move is exhausted. Either way, the Relative Strength Index has moved well past the overbought mark and although the bias is bullish, we expect to see some sort of bounce lower from the current resistance. The extent of the movement should be limited because strong moves are usually followed by a short period of ranging price action.

Fundamental Outlook

Similar to the United States, the United Kingdom didn’t schedule major economic releases for today so the technical side will prevail.