FOREX NEWS: BULLS MAKE THEIR PRESENCE KNOWN BY THREATENING RESISTANCE
EUR/USD
Forex News: After an unsuccessful attempt to break support, the pair bounced higher and continued to move in this direction for the entire day. The LTRO value was set at 82.6 Billion Euros but the time of the release was changed, taking traders by surprise.
Technical Outlook
The support zone around 1.2860 was pierced yesterday but price bounced higher soon after; however, the pair is still trading below the 50 period Exponential Moving Average and we saw a new low yesterday so the current bullish move must be considered just a simple retracement in a downtrend. A break above the 50 EMA and above 1.2960 would weaken the downtrend and open the door for a stronger move to the upside.
Fundamental Outlook
The day ahead lacks any notable economic or financial releases and we expect price action to be driven by technical factors.
GBP/USD
At the time of writing, the official results regarding the Scotland’s Independence Vote were not released but polls and surveys showed that Scottish people favored a “No” vote and probably the United Kingdom will remain with its current structure.
Technical Outlook
After the initial break of 1.6250, price re-tested the level from above and bounced higher on optimism that Scotland will remain a part of the United Kingdom. This bullish movement is likely to continue until 1.6460 is reached but if this occurs, we expect some sort of bearish reaction as probably the Relative Strength Index will enter oversold territory and the sellers still have underlying strength.
Fundamental Outlook
After a week filled with important events, the fundamental scene calms down a bit as no major events are scheduled for release.
FOREX NEWS: ECB PRESIDENT TESTIFIES – VOLATILITY ALMOST GUARANTEED
EUR/USD
Forex News: For almost the entire duration of Friday’s trading session the US Dollar gained and the pair moved south, ending the week below support. No major news came out but Euro weakness combined with Dollar strength triggered a 100 pip drop.
Technical Outlook
The bears took back control of the pair and drove price all the way down to 1.2860. The level was broken Friday but we are likely to see moves above it today, with the first resistance being represented by the 50 period Exponential Moving Average. To the downside, support is located at 1.2750 but we don’t expect this level to be touched today.
Fundamental Outlook
At 1:00 pm GMT, ECB President Mario Draghi will testify on monetary policy and this will be the day’s main event. He will speak in Brussels, before the European Parliament’s Economic and Monetary Committee and his attitude will be closely watched by traders around the world; high volatility is expected and caution is recommended.
GBP/USD
Similar to the Euro, the Pound gave back some of the previous gains and dropped for more than 200 pips Friday after climbing against the Dollar on the back of the Scottish referendum vote.
Technical Outlook
The bears’ underlying strength was made clear Friday and the break of 1.6460 resistance couldn’t be sustained by the buyers, a fact which indicates that more downside movement will follow. The first barrier in front of the sellers is located at 1.6250 support and today we are likely to see a touch of this level. However, we don’t expect a break or any other major developments as the day lacks British economic and financial releases.
Fundamental Outlook
The US Existing Home Sales are released at 2:00 pm GMT with an expected value of 5.21M. Higher numbers suggest a thriving economy and can add to the strength of the US Dollar. As already mentioned, the United Kingdom didn’t schedule any news releases today thus price action will be driven by the American events and by technical factors.
OREX NEWS: EUROPEAN MANUFACTURING DATA IN THE SPOTLIGHT
EUR/USD
Forex News: Mario Draghi’s speech didn’t create the expected volatility although he mentioned the fact that additional stimulus may be implemented if the current measures are not enough to fend off the risk of deflation.
Technical Outlook
The comments made by the ECB President weakened the Euro and the pair bounced lower after successfully testing 1.2860 from below. The next major target remains the support at 1.2750 and for the time being resistance is represented by 1.2860. The Relative Strength Index doesn’t show an extreme reading and price is still trading below the 50 period Exponential Moving Average so for now the downtrend is intact.
Fundamental Outlook
The French Flash Manufacturing PMI is released today at 7:00 am GMT and expected to change to 47.1. Half an hour later the German indicator with the same name will come out with an anticipated value of 51.3. Both indicators are gauges of optimism among purchasing managers from the manufacturing sector and better than expected numbers will most likely strengthen the Euro since these surveys are also leading indicators of economic health.
GBP/USD
The Pound showed some bullish behavior yesterday but for the most part it traded in a range, without any major developments taking place.
Technical Outlook
We are still expecting a touch of 1.6250 from above and even a potential break as the bears still have a lot of underlying strength. If the pair will bounce higher once this potential touch occurs, we are likely to see an extended move north, probably into the zone around 1.6460, but such a distance will not be traveled in one day unless a surprising event takes place.
Fundamental Outlook
The main Pound affecting event is the release of the Mortgage Approvals by the British Bankers’ Association, scheduled at 8:30 am GMT. The indicator offers insights into the health of the British house-market because usually a home is purchased with a mortgage, thus higher numbers than the forecast 42.9K will be beneficial for the Pound.
FOREX NEWS: MIXED PRICE ACTION AHEAD OF GERMAN BUSINESS CLIMATE SURVEY AND AMERICAN HOUSING DATA
EUR/USD
Forex News: The first part of yesterday’s trading session was controlled by the bulls and the pair climbed comfortably above resistance but during the second part of the day we saw the sellers take control and push price back into the broken level.
Technical Outlook
Currently the price is hovering near 1.2860 level which was previously resistance. If the pair cannot move back below this level and instead we see rejection here, we are likely to witness an extended move north, into the resistance located at 1.2960. A move below 1.2860 would probably reignite the bears’ willingness to move the pair into 1.2750 key support.
Fundamental Outlook
At 8:00 am GMT the German IFO Business Climate survey will be released with an anticipated change from the previous 106.3 to 105.9. The importance of this survey comes from its large sample size of about 7,000 businesses; the representatives of these businesses are asked to offer their opinion regarding the current economic and business conditions as well as a 6 month outlook. Under normal conditions, higher numbers than forecast strengthen the Euro.
The American New Home Sales will be released at 2:00 pm GMT and expected to increase to 432K from the previous 412K, a fact which would be considered bullish for the US Dollar and may take the pair lower.
GBP/USD
The British Mortgage Approvals disappointed but the Pound moved higher in the beginning of the day; however, it gave back some of the previous gains and price action was rather mixed.
Technical Outlook
Yesterday’s movement doesn’t offer a lot of hints about future direction but the pair is approaching 1.6460 resistance and this level will probably act as a magnet to price. If we are going to see a touch of the mentioned level, a bounce-or-break scenario will unfold: a breakout would open the door for a touch of 1.6550 and a potential trend reversal while a bounce would most likely draw in more sellers and renew the downtrend.
Fundamental Outlook
The United Kingdom didn’t schedule any major news releases today thus price direction will be mainly influenced by the US events and by the technical aspect.
FOREX NEWS: BEARS RENEW THE DOWNTREND AND THREATEN KEY SUPPORT
EUR/USD
Forex News: The pair tumbled during the first part of yesterday without any apparent reason other than the technical aspect and later in the day, the surprisingly better value of the US New Home Sales added more steam to the US Dollar, renewing the downtrend.
Technical Outlook
The pair found resistance at the 50 period Exponential Moving Average and quickly moved below 1.2860. More sellers joined once the US housing data was released and now the pair is most likely headed for the key support at 1.2750. Once this level is reached we are likely to see a retracement in the form of a move north or at least some ranging price action.
Fundamental Outlook
The day’s main event is the release of the American Durable Goods Orders scheduled at 12:30 pm GMT. These types of goods (with a life expectancy or at least 3 years) are usually purchased in times of economic expansion and an increased value suggests that people are confident in the overall economic situation. It also means that producers will have to increase their activity to satisfy demand. The expected change is -17.7%, a huge drop from the previous 22.6%; such a drastic value would most likely weaken the greenback.
GBP/USD
The bears made their presence known yesterday and managed to take the pair lower, a behavior mostly attributed to the better than expected value of the US New Home Sales.
Technical Outlook
Price came very close to the 50 period Exponential Moving Average which is the first barrier for the bears before 1.6250 can be reached. If the pair will move below this short term dynamic support, we are likely to see an extended move lower; otherwise the bulls will take price into the resistance located at 1.6460.
Fundamental Outlook
At 10:00 am GMT the Confederation of British Industry will announce the Realized Sales survey which is based on opinions of wholesalers and retailers regarding the current level of sales volume. The anticipated value is 34, a drop from last month’s 37 and we may see Pound weakness if this forecast comes true; however, the indicator usually has a medium impact.
Later in the day, at 12:40 pm GMT, BOE Governor Mark Carney will speak at a Conference in Wales. Huge moves are not expected but the chances of sudden, strong moves increase whenever a head of a Central Bank speaks so caution is recommended.
FOREX NEWS: AMERICAN GROSS DOMESTIC PRODUCT – THE LAST RELEASE OF A VOLATILE WEEK
EUR/USD
Forex News: The bears scored a major victory and broke key support yesterday on the back of US Dollar strength generated by a positive forecast made by Morgan Stanley, Bank of America and Corp. and Morgan Stanley based on speculation of a near-future rate increase.
Technical Outlook
The break of 1.2750 is indeed an important development which will probably bring in more sellers but for the time being, the pair is likely to show some sideways movement or even small retracements to the upside. For today we expect price to remain rather close to 1.2750, moving above and below it, with the first downside barrier being yesterday’s low at 1.2696.
Fundamental Outlook
The day’s main event is the release of the Final version of the American Gross Domestic Product, scheduled at 12:30 pm GMT. The expected change is 4.6% compared with the previous 4.2% and although this version has the lowest impact out of the three (Advance, Preliminary and Final), strong movement might occur if the value will surprise in any way.
GBP/USD
US Dollar strength took the pair slightly lower but our predicted target at 1.6250 was not touched and throughout the day price action was mixed and mostly ranging.
Technical Outlook
The pair moved below the 50 period Exponential Moving Average and 1.6250 support is very close to current price. This makes us still believe that 1.6250 will be touched today or in the near future; if the bulls can take the pair higher, this level is a place where they could show their willingness. A break of the level mentioned above would suggest that lower prices will follow and the next support will be located at 1.6160.
Fundamental Outlook
Today the United Kingdom didn’t schedule any important news announcements and price action will be influenced by the American GDP and by technical factors.
FOREX NEWS: GERMAN INFLATION DETERMINES TODAY’S BIAS
EUR/USD
Forex News: Friday the bears were in control for the entire day and managed to break minor support by taking the pair to new lows. The Final version of the American GDP came out with the anticipated value which was better than the previous, a fact which contributed to US Dollar strength.
Technical Outlook
Although the downtrend is at full strength, the Relative Strength Index is in oversold territory on hourly, four-hour and daily charts, a thing which makes a bullish pullback very probable. The zone around 1.2695 will probably act as resistance while support is located at 1.2660 and today’s direction will be mainly influenced by German inflation data.
Fundamental Outlook
At 12:00 pm GMT the German Preliminary Consumer Price Index will be released; this is the main inflation gauge for the German economy and has a hefty influence on European inflation. Today’s expected change is -0.1%, lower than last month’s 0.0% and this negative change will probably weaken the Euro.
GBP/USD
After a brief bullish move which found resistance at the 50 period Exponential Moving Average, the pair dropped for the rest of the day and the bears finished last week in control.
Technical Outlook
Our predicted target at 1.6250 was reached and now a bounce-or-break scenario is in effect (for the time being 1.6250 is not considered clearly broken). A break of the level would make 1.6160 the next destination while a bounce higher will probably find resistance at the 50 period Exponential Moving Average. The Relative Strength Index has reached the 30 level on an hourly chart but on a four hour chart it still has room to move down so we cannot consider this a clear oversold condition.
Fundamental Outlook
The Bank of England will reveal the value of the Net Lending to Individuals today at 8:30 am GMT; the indicator shows the change in value of credit approved towards consumers and usually higher values suggest optimism. Today’s expected value is 3.1B, a drop from last month’s 3.4B.
FOREX NEWS: UNDERLYING US DOLLAR STRENGTH DRIVES PRICE LOWER
EUR/USD
Forex News: The Euro bulls managed to take the pair higher yesterday on the back of better than expected German inflation. Support was briefly touched but no serious attempts to break it were made.
Technical Outlook
The support at 1.2660 sits in front of the pair’s descent but the US Dollar continues to have respectable strength and we believe that a break of the mentioned level will occur in the near future. The downtrend is intact and going strong so yesterday’s bullish move must be regarded as a simple retracement or pullback against the trend.
Fundamental Outlook
Euro Zone’s CPI Flash Estimate is today’s main event for the Euro; this indicator is the main gauge of inflation and as we know, inflation is a major concern of the ECB’s because the current level is considered too low. The time of release is 09:00 am GMT and the expected value is 0.3%, a drop from last month’s 0.4%, a fact which will affect negatively the Euro if it comes true.
At 2:00 pm GMT the US Consumer Confidence survey is released. The forecast is 92.2, a slight decrease from last month’s 92.4. Since confidence among consumers is closely correlated with consumer spending, a higher number for today’s release will most likely generate more Dollar strength.
GBP/USD
The Net Lending to Individuals was close to the anticipated value and the release didn’t create a lot of movement. For the entire day the pair remained below 1.6250 and movement was ranging.
Technical Outlook
Although the bears weren’t very convincing yesterday and the pair mostly ranged near 1.6250, we anticipate a more serious descent today. The US Dollar is surrounded by a positive sentiment lately, gaining against almost all of its counterparts and from a technical point of view, 1.6250 combined with the 50 period Exponential Moving Average creates a confluence zone which acts as resistance.
Fundamental Outlook
United Kingdom’s Current Account is announced today at 08:30 am GMT and it’s anticipated to change from the previous -18.5B to -16.9B. The indicator represents the difference between imported and exported goods and higher values suggest that currency demand is increasing. Price action today will be influenced by the American Consumer Confidence as well.
FOREX NEWS: NEW LOWS REACHED. THE PROBABILITY OF RETRACEMENTS HAS INCREASED
EUR/USD
Forex News: The Euro was negatively affected yesterday by inflation that continues to decline and this fact, coupled with underlying US Dollar strength, generated another strong move south.
Technical Outlook
The support at 1.2660 was broken decisively yesterday and the Euro is heading for a 2 year low against the Dollar. It is clear that bears are in control of the pair but a bullish pullback against the main trend is expected, considering the fact that the downtrend is overextended and the Relative Strength Index is trading in oversold territory on more than one time frame. The first support is located at 1.2570 (yesterday’s low), while potential resistance sits at 1.2660.
Fundamental Outlook
Today at 12:15 pm GMT, Automatic Data Processing will release their version of the US Non Farm Employment Change which is anticipated to remain almost unchanged (206K) from last month’s 204K. This privately owned company releases an early employment report which tries to mimic the Government data which will be announced Friday and the impact differs from month to month but higher numbers are considered beneficial for the US Dollar.
GBP/USD
United Kingdom’s Current Account posted a disappointing value, weakening the Pound and driving the pair lower, in close vicinity of support.
Technical Outlook
Price is capped to the upside by the resistance at 1.6250 while to the downside support sits at 1.6160. The pair’s last encounter with this support generated a strong bullish move and the same is possible now, but a lot depends on the British Manufacturing data and American Employment. The Relative Strength Index doesn’t show an extreme reading but the 50 period Exponential Moving Average is angled downwards, increasing the chances of another push lower.
Fundamental Outlook
United Kingdom’s Manufacturing PMI is released today at 8:30 am GMT but the anticipated change is very small: 52.6 from last month’s 52.5. This is a survey based on the opinions of purchasing managers from the Manufacturing sector and acts as a leading indicator of economic health, thus higher numbers lead to a stronger Pound.
FOREX NEWS: THE MARKET PREPARES FOR THE ECB PRESS CONFERENCE
EUR/USD
Forex News: Yesterday’s price action was difficult to trade as the ADP Employment data posted better than expected values, causing the US Dollar to strengthen but later in the day it was weakened by a worse than expected value of a Manufacturing survey.
Technical Outlook
Price moved up and down yesterday without clear direction but we can notice the 50 period Exponential Moving Average is still providing good resistance on an hourly chart. It seems like bearish momentum is starting to fade away or at least to decrease in intensity but this can be easily changed by today’s ECB decision regarding the interest rate. The main levels to watch are 1.2660 as resistance and 1.2570 as support but the technical aspect will be secondary.
Fundamental Outlook
At 11:45 am GMT the European Central Bank will announce the Interest Rate which is not expected to change from the current value of 0.05% but we saw before that surprises can happen so we recommend caution at the time of the release and during the Press Conference which follows 45 minutes later. During the Conference, President Mario Draghi will read a prepared speech and afterwards will answer journalists’ questions. This second part of the Press Conference is known to generate strong volatility and often irregular movement, depending on the President’s answers and attitude.
GBP/USD
The British Manufacturing data disappointed and the Pound weakened as a result but later in the day price climbed to touch resistance.
Technical Outlook
The touch of 1.6250 resistance resulted in a bounce lower and overall we had a day which was tough to trade on the lower time frames. The important levels for today still remain 1.6160 as support (which was touched yesterday but price couldn’t break it) and 1.6250 as resistance (which combined with the 50 period Exponential Moving Average creates a confluence zone).
Fundamental Outlook
The British Construction PMI will be released today at 8:30 am GMT with an expected decrease from last month’s 64.0 to 63.7. This is a survey based on the opinions of about 170 purchasing managers from the Construction sector, regarding the current business conditions and acts as a leading indicator of economic health, thus a higher value is usually beneficial for the Pound.
FOREX NEWS: AMERICAN NON FARM PAYROLLS SET THE STAGE FOR A VOLATILE FRIDAY
EUR/USD
Forex News: The ECB Press Conference and Mario Draghi’s attitude generated mixed reactions and a lot of whipsaws. The interest rate remained unchanged and for the time being resistance is holding.
Technical Outlook
The irregular movement generated by Mario Draghi’s speech took price above 1.2660 resistance but soon after, the Euro weakened and the pair returned below the mentioned level. If the bears will take back control, this is a good place to do so and the first target will be 1.2570. Important US Employment data is released today and this will strongly affect the Dollar, making the technical aspect secondary.
Fundamental Outlook
Today the most important American jobs related indicator is released: the Non Farm Employment Change (also known as Non Farm Payrolls). The report tracks changes in the number of employed people and higher numbers suggest a thriving economy; an increase is also indicative of future growth in the retail sales sector. Today’s release is scheduled at 12:30 pm GMT and the expected number is 216K, a hefty rise from last month’s 142K.
GBP/USD
Although British Construction data posted a better value than expected, US Dollar strength took the pair lower for almost the entire day and short term support was broken yesterday.
Technical Outlook
The current move is likely to extend into the zone surrounding 1.6060 now that previous support was broken and may turn into resistance (1.6160). The pair is trading below the 50 period Exponential Moving Average and below resistance, without being oversold so we are likely to see lower prices especially if the American NFP will show a good reading.
Fundamental Outlook
The British Services PMI is released today at 8:30 am GMT and the forecast is 59.1, a drop from last month’s 60.5. If the forecast comes true or lower numbers are posted, the Pound will be negatively affected and the pair may descend further.
FOREX NEWS: SCARCE ECONOMIC DATA SLOWS DOWN PRICE ACTION
EUR/USD
Forex News: Friday we saw tremendous US Dollar strength generated by a better than expected value of the Non Farm Payrolls: forecast 216K; actual 248K. The US economy is continuing to post good numbers and this fuels speculation the Fed will increase interest rates before its counterparts.
Technical Outlook
The downtrend is very strong and the Dollar is surrounded by an overall positive sentiment, thus we expect to see the pair go even lower in the near future. The first barrier and possible target is located at 1.2440 but before it can be reached, we are likely to see price visit 1.2570 once again. Today we expect slow movement as no major indicators are released.
Fundamental Outlook
The only notable indicator released today is the German Factory Orders. The scheduled time is 6:00 am GMT and the expected value is -2.4%, a drop from last month’s 4.6%. Higher values suggest increased economic activity and have the potential to strengthen the Euro but the indicator usually has a low-to-medium impact.
GBP/USD
The US Dollar strengthened across the board Friday and this was felt by the Pound as well. The pair dropped to break support and the downtrend resumed, creating a new low.
Technical Outlook
Lately the Dollar breaks support levels with ease and the downtrend is going strong, with the next target being 1.5900. The Relative Strength Index is traveling in oversold territory and pullbacks against the main trend are likely to happen before the next support is reached. Potential resistance is located at 1.6060 but today we anticipate a slow day based on the fact that no economic indicators are released.
Fundamental Outlook
The United Kingdom didn’t schedule major indicator releases for the day, thus the technical aspect will influence price direction.
FOREX NEWS: FOCUS SHIFTS TOWARDS THE POUND FOR MANUFACTURING DATA RELEASE
EUR/USD
Forex News: Overall the Euro had a bullish day although the German Factory Orders came out with a disappointing value. Price action was mainly affected by the technical aspect and the bears still have a lot of underlying strength.
Technical Outlook
The oversold condition indicated by the Relative Strength Index materialized in a bullish pullback against the main trend. However, we consider this just normal market behavior as the downtrend is intact and further descent is likely to occur during the days to come. The current level at 1.2570 may become resistance if we see a bounce lower and the first support is located at 1.2440.
Fundamental Outlook
Today Europe and the United States didn’t schedule any major economic releases thus price direction will be influenced mainly by the technical aspect.
GBP/USD
The pair had a slow day, a fact also generated by the lackluster fundamental scene. Neither support nor resistance was threatened but price retraced slightly higher.
Technical Outlook
Price action was slow but bullish nonetheless and this is a fact which we expect to change today and price to make another attempt to reach the important support located at 1.5900. It’s possible to see a touch of 1.6060 before price will make a run for support, considering the position of the Relative Strength Index which is coming out of oversold territory.
Fundamental Outlook
The British Manufacturing Production is released at 8:30 am GMT with an expected change of 0.2% compared with last month’s 0.3%. Considering that manufacturing is an important part of United Kingdom’s economy, higher values can lead to a stronger Pound.
At 2:00 pm GMT an estimate of the British Gross Domestic Product is released. Last month’s value was 0.6% and anything above that will most likely strengthen the Pound.
FOREX NEWS: FOMC MEETING MINUTES MAY SPUR SPECULATION ABOUT A RATE HIKE
EUR/USD
Forex News: The pair moved above short term resistance, mostly because a stronger retracement was needed taking into consideration the tremendous drop seen throughout last months. A report regarding German Industrial Production showed disappointing figures, slowing the pair’s ascension.
Technical Outlook
The resistance at 1.2660 was touched several times yesterday but the bulls lacked the strength to break it, a fact which shows the underlying strength of the bears and makes us believe that price will resume downwards motion if today resistance is not broken. The first support is located at 1.2580 while the next resistance (if 1.2660 is broken) sits at 1.2750.
Fundamental Outlook
Europe doesn’t didn’t schedule any important news releases but the US Dollar will he highly affected by the FOMC Meeting Minutes which are made public at 6:00 pm GMT. The document will contain insights into the reasons which influenced the members’ votes regarding monetary policy and interest rate but more importantly, it may contain hints about a future rate increase. Such hints would fuel speculation about the US Dollar’s next direction and would influence the pair’s movement in a spectacular fashion.
GBP/USD
Similar to the Euro, the Pound slowly climbed above short term resistance. British Manufacturing Production disappointed but we attribute yesterday’s movement to trend exhaustion and to technical factors, not to fundamentals.
Technical Outlook
The resistance at 1.6060 was broken but now an important confluence zone sits in front of rising prices. This zone is represented by the level at 1.6160 and the 50 period Exponential Moving Average; a move above both these types of resistance would show that bulls may be preparing to reverse the downtrend. The US Dollar and consequently the pair will be heavily influenced by the FOMC Meeting Minutes.
Fundamental Outlook
The United Kingdom didn’t schedule major economic or financial indicators for today and we expect mixed movement ahead of the FOMC release.
FOREX NEWS: RESISTANCE THREATENED. WHAT IS THE ANSWER OF THE BEARS?
EUR/USD
Forex News: Trading was pretty slow ahead of the FOMC Meeting Minutes but the Dollar weakened considerably once the Minutes showed the Fed sees global economic slowdown as a threat to the US economic recovery.
Technical Outlook
The pair quickly climbed at the time of the FOMC release and 1.2750 resistance was reached. Now price is trading above the 50 Period Exponential Moving Average for the first time in a long while but this important level acts as a strong barrier. A break of 1.2750 would deal a big blow to the downtrend and we might see an extended move north. If price will have trouble breaking the level, the next destination is 1.2660 and the 50 period EMA.
Fundamental Outlook
The G20 Meetings start today and ECB President Mario Draghi will speak at 3:00 pm GMT in Washington DC. The main subject of the speech will be the latest European developments and, as always, volatility is expected and caution recommended because the Euro can be strongly affected by Draghi’s attitude.
GBP/USD
Similar to the Euro, the Pound couldn’t break resistance before the FOMC release but Dollar weakness allowed the pair to move swiftly up and to break resistance.
Technical Outlook
Currently the pair is trying to move above 1.6160 after breaking 1.6060 in a decisive manner. The market perceived the Meeting Minutes as very bearish for the greenback so we might see more upwards movement today but overall we are still trading in a market with a strong Dollar. Bearish activity is not out of the question although the momentum is in favor of the bulls and we consider a move below the 50 period Exponential Moving Average a sign of underlying US Dollar strength which may lead to a touch of 1.6060.
Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the Interest Rate decision. The current value is 0.50% and an increase would add massive strength to the Pound; however, such an increase would be a tremendous surprise considering the fact that Bank of England didn’t offer any hints so far about a rate hike.
EUR/USD
Forex News: The Euro bulls managed to take price higher during the early stages of yesterday but the climb couldn’t be sustained and price returned below resistance. Mario Draghi’s dovish attitude and comments weakened the Euro further and added more fuel to the downside.
Technical Outlook
The move that started at 1.2500 is considered a bullish correction to the main downtrend and it looks like it may have ended. The Relative Strength Index reached overbought territory in a strong downtrend and bulls failed to keep price above 1.2750; these factors combined with the prevailing downtrend make us believe that today we will see a break of 1.2660 which is first potential support. If this occurs, the next level of interest is located at 1.2580.
Fundamental Outlook
At 6:45 am GMT the French Industrial Production change is released and a drop from last month’s 0.2% to -0.2% is expected. The indicator usually has low or medium impact on the Euro but nonetheless, better numbers can strengthen the Euro.
GBP/USD
As forecast, the Bank of England didn’t change the Interest Rate and the event went almost unnoticed by market participants. The bears dragged the pair lower yesterday after the bulls failed to touch major resistance.
Technical Outlook
Price is very close to the 50 period Exponential Moving Average but if a clear break occurs the next target will become 1.6060 support. A new move above 1.6160 would suggest that bulls have enough strength to take price into the major level at 1.6250; however the Relative Strength Index was close to overbought before yesterday’s drop and this increases the chances of a bigger move to the downside.
Fundamental Outlook
United Kingdom’s Trade Balance is released today at 8:30 am GMT and the forecast is -9.6B. Since this indicator represents the difference between imports and exports, higher values are beneficial for the Pound.
FOREX NEWS: TODAY’S HEADLINES – GERMAN ZEW AND UNITED KINGDOM’S INFLATION
EUR/USD
Forex News: Yesterday Euro bulls managed to take price above first resistance although no major economic or financial indicators were released. The move was mainly technical and it’s not backed by strong fundamentals.
Technical Outlook
Price moved above 1.2660 resistance and above the 50 period Exponential Moving Average but we can notice the fact that momentum is starting to become neutral as the Moving average is almost flat on a four-hour chart. On an hourly chart we can see that yesterday’s price action created minor resistance at the psychological level of 1.2700 and this will be the first barrier in front of rising prices; a break would make 1.2750 the next target while a bounce lower would take us back into 1.2660.
Fundamental Outlook
The day’s main event is the release of the German ZEW Economic Sentiment scheduled at 9:00 am GMT, with an expected value of 0.2, a major drop from last month’s 6.9. This survey is based on the opinions of about 275 German professional investors and analysts and acts as a leading indicator of optimism and economic health. Under normal circumstances, a higher than expected number strengthens the Euro and takes the pair higher.
GBP/USD
The pair’s movement was rather mixed yesterday and we saw the bulls take price higher just to be reversed in the second part of the day. No major news came out and direction was influenced by technical factors.
Technical Outlook
On a four hour chart it’s clearly visible how the pair found resistance at the 50 period Exponential Moving Average and now it’s struggling to break 1.6060 support. Although the bears still have a lot of steam left, the downtrend is definitely weaker than before so it’s not very clear if this level can be broken and the answer will probably be offered by the British inflation numbers released today.
Fundamental Outlook
The British Consumer Price Index is released today at 8:30 am GMT. This is the main gauge of inflation and although the current value is not a reason for concern, if inflation will continue to drop, this will become a worrying issue. Today’s expected change is 1.4%, lower than last month’s 1.5%; if this forecast comes true we might see lower prices on the back of Pound weakness.
FOREX NEWS: VOLATILITY TONING DOWN AFTER YESTERDAY’S STORM
EUR/USD
Forex News: Yesterday’s price action offered us a huge surprise in the form of a 250 pips rise followed by a massive drop of more than 120 pips. The disappointing numbers posted by the US Retail Sales triggered US Dollar weakness and the initial climb, while the move south that followed is mainly attributed to technical reasons.
Technical Outlook
Under normal circumstances the massive climb could bring in more buyers but the long wick of the candle signifies rejection and makes the picture unclear. For the moment we recommend caution as the pair’s next direction is uncertain. Yesterday’s high at 1.2886 will act as the first resistance while the level at 1.2750 could provide some support but can also turn into resistance if price moves below it. In this latter case, 1.2660 will become first support.
Fundamental Outlook
At 2:00 pm GMT the Philly Fed Manufacturing Index is released and expected to decrease from last month’s 22.5 to 19.9. This is a leading indicator of economic health based on the opinions of about 250 manufacturers from the Philadelphia district and higher than expected numbers usually strengthen the US Dollar.
GBP/USD
British unemployment data was worse than anticipated but the main event of the day was without a doubt the US Retail Sales release which triggered tremendous volatility.
Technical Outlook
The pair touched 1.6060 resistance and immediately dropped, creating a major whipsaw. For the time being, the downtrend is still in place as we don’t have a higher high but a lower low was printed. For today we expect the pair to remain between 1.6060 resistance and 1.5900 support, but given the latest strong movement, a breakout is possible as well.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so focus will be shifted towards the United States and the technical aspect.
