Technical News | Daily

Trading Discussion Currencies
846

FOREX NEWS: FED OFFICIALS FEAR LOW INFLATION. ANOTHER HIKE THIS YEAR STILL POSSIBLE

EUR/USD

Forex News: The pair continued on a bullish path before the FOMC Meeting Minutes release, which revealed that some Fed officials fear that low inflation is not “only transitory”. The greenback weakened at the time of the release but volatility remained relatively normal.

Technical Outlook

It looks like the Dollar’s next move will be decided by inflation data but for the time being, the American currency lacks strength and the pair is climbing. However, price is currently at a resistance zone created by 1.1840 and 1.1875, with the Relative Strength Index in overbought territory. This calls for a bounce lower, which will probably occur once 1.1875 is hit. As long as the mentioned level remains intact, our bias is bearish, expecting a bounce lower.

Fundamental Outlook

The U.S. Producer Price Index will be today’s most notable release for the US Dollar, scheduled at 12:30 pm GMT. The indicator tracks changes in the price that producers charge for their goods and it has inflationary implications because a higher producer price usually leads to a higher consumer price. Today’s expected change is 0.4% (previous 0.2%) and numbers above forecast strengthen the greenback.

At 2:30 pm GMT, ECB President Draghi will speak about monetary policy in Washington DC, at the Peterson Institute for International Economics. The impact cannot be anticipated but caution should always be used when heads of central banks speak publicly.

GBP/USD

The pair remained in a range for most of yesterday’s trading session and the FOMC Minutes created a small climb due to US Dollar weakness. Overall no special developments took place and price action was slow.

Technical Outlook

Currently the pair is drifting without clear direction, meaning that we can see either a move up or down. The 50 period Exponential Moving Average is also flat, adding to the uncertainty, so until we see a clear break of 1.3250 or 1.3160, our bias is neutral. The Relative Strength Index is not showing an overextended condition but the Stochastic is overbought and crossing down; this is not a strong bearish signal but combined with the inability to move above the 50 EMA, it may suggest that lower prices will follow.

Fundamental Outlook

The Pound has another light day ahead, so the technical aspect and the U.S. data will be the main price drivers.

847

FOREX NEWS: U.S. INFLATION EYED FOR NEXT MOVE. POSSIBLE RATE HIKE IMPLICATIONS

EUR/USD

Forex News: After reaching the resistance at 1.1875, the pair bounced lower, due to the technical reasons outlined yesterday but also due to upbeat US Dollar sentiment triggered by positive economic data.

Technical Outlook

The overbought condition of the Relative Strength Index combined with the resistance level at 1.1875 generated a bounce lower, which is likely to extend into the 50 period Exponential Moving Average. However, if price returns above 1.1840, we will most likely see another test of 1.1875 but we don’t expect major advances north until a deeper retracement occurs.

Fundamental Outlook

Today we have two very important releases scheduled at 12:30 pm GMT: the U.S. Consumer Price Index (expected change 0.6%) and the U.S. Retail Sales (expected change 1.7%). The former is the main gauge of inflation and is especially important now because some Fed officials see inflation as too low and this could potentially affect their decision to hike later this year.

Sales made at retail levels represent the major part of consumer spending and in turn, a big part of overall economic activity, thus higher numbers usually strengthen the currency.

GBP/USD

The Pound weakened during yesterday’s session on concerns that Brexit negotiations are not going as smooth as they should and this combined with positive U.S. data triggered a drop below support.

Technical Outlook

The pair broke 1.3160 and now it looks like it’s testing the level from below. If price remains below 1.3160 and below the 50 period Exponential Moving Average, we expect to see a move into 1.3100. The oscillators are starting to gain downside momentum and the Pound is affected by Brexit negotiations, so the bias is negative but a lot will depend on the U.S. data released throughout the day.

Fundamental Outlook

The economic calendar for the Pound is light today, without any major releases, so the technical aspect and the U.S. data will be the main price drivers.

848

FOREX NEWS: U.S. INFLATION DISAPPOINTS, US DOLLAR STILL RESILIENT

EUR/USD

Fores News: The pair spiked higher Friday when the U.S. Consumer Price Index showed a value below expectations. However, most of the US Dollar losses were soon erased and the pair finished the week below resistance.

Technical Outlook

As long as the pair is trading above the 50 period Exponential Moving Average, the bias is still bullish but it must be noted that recently the resistance at 1.1875 was touched twice and each time price dropped. This shows that bearish pressure is increasing and the bulls lack the necessary strength to take price higher, at least for the time being. If resistance is not broken early in the session, we expect a drop through the 50 EMA and into 1.1775.

Fundamental Outlook

The day’s only notable release is the Empire State Manufacturing Index, which is a survey of about 200 manufacturers from the New York state. The respondents are asked to rate the level of business conditions and the survey acts as a leading indicator of optimism and economic health. The time of release is 12:30 pm GMT and the expected reading is 20.3 but the survey has a limited impact.

GBP/USD

The pair showed choppy price action Friday and ended the session close to where it started it. The US Dollar weakened at the time of the CPI release but erased most of the losses soon after.

Technical Outlook

Friday the bulls attempted to take price higher but failed and this resulted in a candle with a long upper wick, which is a sign of rejection, so we expect a move lower for today. However, the pair will most likely remain between the resistance at 1.3350 and the support at 1.3250 for the entire trading session or at least for a big part of it.

Fundamental Outlook

The Pound has a light economic calendar today, so the technical aspect will decide the pair’s direction. The lack of economic data releases may also trigger a slow day.

849

FOREX NEWS: FULL DAY FOR THE POUND: INFLATION DATA AND BOE GOVERNOR’S TESTIMONY

EUR/USD

Yesterday the pair moved below the 50 period Exponential Moving Average and approached the support at 1.1775 but overall the session was pretty slow. The Empire State Manufacturing Index posted a value of 30.2, higher than the expected 20.3 and this helped the US Dollar to some extent.

Technical Outlook

Although the pair descended below the 50 EMA, it lacks momentum and seems like neither side is in control. However, if the support at 1.1775 is not broken soon, this will show that the balance is tilting towards the bulls and 1.1840 will become the first target. Until an important level is broken, our view is mostly neutral.

Fundamental Outlook

The German ZEW Economic Sentiment will be released today at 9:00 am GMT and will show the opinions of about 300 German professional analysts and investors regarding a 6-month economic outlook for the German economy. Usually a higher number than the expected 20.3 is beneficial for the Euro but the impact is often low if the actual number matches the forecast.

GBP/USD

The pair remained in a tight range for most of yesterday’s trading session mostly due to the lack of economic data releases for the Pound.

Technical Outlook

Although yesterday the pair moved sideways for the most part of the session, in the afternoon we saw a drop into 1.3250 and into the 50 EMA, followed by a bounce higher. This shows that 1.3250 is still a good support level, thus a break will show increased bearish pressure. As long as the pair is trading between 1.3250 and 1.3350, our bias is neutral but a lot will depend on the British economic data.

Fundamental Outlook

Today is an important day for the Pound, due to the release of the British Consumer Price Index, which is the main gauge of inflation and is closely watched by the BOE when deciding interest rate changes. The time of release is 8:30 am GMT and the expected reading is 3.0% (previously 2.9%). Higher numbers usually strengthen the Pound because high inflation eventually leads to a rate hike.

At 10:15 am GMT, BOE Governor Mark Carney will testify in London, before the Treasury Select Committee. This testimony may have a strong impact on the Pound, so we recommend caution until volatility settles down.

850

FOREX NEWS: US DOLLAR REGAINS ITS SWAGGER. SUPPORT BROKEN AND LOWER PRICES TO FOLLOW

EUR/USD

Forex News: The Euro weakened yesterday after a disappointing German ZEW survey and this allowed the pair to break support and to move south for almost the entire trading session.

Technical Outlook

The pair is trading below the 50 period Exponential Moving Average and below 1.1775 so the short term outlook is bearish, making us anticipate a move closer to 1.1700. However, it must be noted that the last few candles are showing long wicks in their lower part and the Relative Strength Index is approaching oversold, which are signs of rejection. This means that the pair will probably retrace higher before reaching 1.1700 but as long as it remains below the 50 EMA, the bias is bearish.

Fundamental Outlook

At 8:10 am GMT, ECB President Mario Draghi will deliver opening remarks at the ECB Conference held in Frankfurt. The impact on the currency will depend on his attitude and matters discussed but cannot be anticipated beforehand. However, volatility is likely to surge and caution is always advised when heads of central banks speak publicly.

At 12:30 pm GMT the U.S. Building Permits will be released, showing how many construction permits for residential buildings were released during the previous month. This is a gauge of future construction activity and usually the greenback is positively affected by a number above forecast, which for today is 1.25 Million (annualized number).

GBP/USD

The Pound pushed slightly higher at the time of the British CPI release (3.0% change, as anticipated) but it came under heavy selling pressure and dropped for more than 100 pips, breaking the key handle at 1.3250.

Technical Outlook

The pair broke with ease the confluence zone created by 1.3250 and the 50 period EMA, showing increased bearish pressure. However, at the time of writing, the drop is showing rejection at 1.3160 so a move up cannot be ruled out. That being said, our bias remains bearish as long as price is trading below the 50 EMA and below 1.3250, so we expect a drop to 1.3100 or even lower.

Fundamental Outlook

The main event for the Pound today will be the release of the Average Earnings Index, which shows changes in the price that employers pay for labour. Higher wages lead to increased consumer spending and this in turn strengthens the Pound, so the indicator has a hefty impact. The time of release is 8:30 am GMT and the expected change is 2.1%.

851

FOREX NEWS: US DOLLAR FAILS TO BREAK SUPPORT. BRITISH RETAIL SALES EYED FOR NEXT MOVE

EUR/USD

Forex News: After dipping into the area around 1.1735, the pair recovered and moved higher, breaking 1.1775 and reaching the 50 period EMA. The U.S. Building Permits came out lower than expected, facilitating the climb.

Technical Outlook

The pair is currently at a crossroads: if the bulls can break the 50 period Exponential Moving Average, the climb will probably continue until 1.1840 is reached. Otherwise, we expect a drop through 1.1775 into the minor support at 1.1735 and possibly 1.1700. The oscillators are showing upside momentum but recently the US Dollar is showing signs of strength so the overall bias is still unclear.

Fundamental Outlook

The Philly Fed Manufacturing Index will be released today at 12:30 pm GMT, showing the opinions of manufacturers from the Philadelphia district regarding the general level of business conditions. The survey has a medium impact on the currency, but higher numbers than the anticipated 21.9 usually strengthen the greenback.

GBP/USD

British earnings data came out above expectations yesterday but despite this bullish signal, the pair only showed a small climb, which was quickly erased and overall the entire session was choppy.

Technical Outlook

Yesterday’s trading session doesn’t offer a lot of clues for the next move but it’s clear that 1.3160 is offering good support and is tough to break. For the short term we expect a climb into the 50 period EMA but if that mark is not surpassed, the pair will probably return to attempt another break of 1.3160. A lot will depend on the British data released today.

Fundamental Outlook

The Pound will be heavily affected today by the release of the British Retail Sales, scheduled at 8:30 am GMT. The indicator draws its importance from the fact that sales made at retail level represent the main part of consumer spending, so a higher number means that economic activity is picking up and this strengthens the currency. The expected change for today is -0.1%, while the previous was 1.0%.

852

FOREX NEWS: CHOPPINESS CONTINUES AS THE US DOLLAR IS SHOWING MIXED SIGNALS

EUR/USD

Forex News: Despite better than anticipated US data, the US Dollar remained in the negative territory and the pair climbed after a spike below the 50 period EMA and below 1.1775 support.

Technical Outlook

Price has reached again the important resistance zone between 1.1840 and 1.1875 but the Stochastic has entered overbought and the Relative Strength Index is approaching that territory. This is usually an early signal that the pair may be rebounding lower in the near future, and we expect that bounce to happen around 1.1875. The bias remains bullish as long as the pair is trading above the 50 period EMA.

Fundamental Outlook

At 2:00 pm GMT the U.S. Existing Home Sales are released, showing the annualized number of houses sold during the last month. The forecast is 5.30 Million but the impact is usually low-to-medium, with higher numbers strengthening the greenback.

At 11:30 pm GMT, Fed Chair Yellen will deliver a speech named “Monetary Policy Since the Financial Crisis”. Caution is always recommended when heads of central banks speak but the late hour will probably diminish the impact on the market.

GBP/USD

The British Retail Sales disappointed yesterday and this generated a sharp drop but soon after, the pair reversed and erased all the losses. Overall price action remained choppy and without clear direction.

Technical Outlook

The pair is still ranging and cannot move above the 50 period EMA or below 1.3160. As long as it remains between these barriers and is showing choppy movement, our bias is neutral but a breakout will probably generate an extended move in that direction. The oscillators lack strong momentum but we can notice a candle with a very long lower wick, which is a clear sign of rejection at support.

Fundamental Outlook

The United Kingdom didn’t schedule major economic data releases for today so the technical aspect will take center stage.

853

FOREX NEWS: A LACKLUSTRE ECONOMIC SCENE TRIGGERS CHOPPY MOVEMENT

EUR/USD

Forex News: Friday’s price action was bearish due to increased demand for the US Dollar. The pair broke the 50 period Exponential Moving Average but stopped at 1.1775 support.

Technical Outlook

The pair is in a range-bound market, without a clear bias. This is visible on a Daily chart as well as a 4-hour chart and it means there’s an increased chance of a bounce up from the current support (1.1775) or from 1.1735 if price gets there. The 50 EMA is almost flat, so it won’t offer a strong resistance but as long as price is trading below it, the bias is slightly bearish.

Fundamental Outlook

The pair will not be affected today by any economic data, so the technical aspect will decide price direction.

GBP/USD

The Pound erased earlier losses Friday when British Prime Minister May encouraged efforts between UK and EU officials to reach common ground in Brexit negotiations. The pair bounced at support but stopped at the 50 period EMA.

Technical Outlook

The bullish momentum started by Prime Minister May’s speech slowed down by the end of Friday’s trading session and it looks like the pair is having trouble breaking the 50 EMA. If this type of resistance is not broken early in today’s session, we will most likely see a drop lower, through 1.3160 and closer to 1.3100. On the other hand, a break will take the pair into 1.3250 but we don’t expect a move above that level unless surprising news comes out.

Fundamental Outlook

Similar to the other two currencies, the Pound will not be affected today by major economic releases, so the technical aspect will take center stage.

854

FOREX NEWS: SUPPORT HOLDS, PAIRS STILL IN RANGE-MODE

EUR/USD

Forex News: The two currencies weren’t affected by economic releases yesterday but the pair descended below 1.1775 and touched the next support at 1.1735. The session was bearish but volatility was relatively dim.

Technical Outlook

The pair remained below the 50 period Exponential Moving Average and broke 1.1775 support but now is showing rejection at 1.1735. This means that we will probably see a re-test of 1.1775 and possibly another encounter with the 50 period EMA but if price will show rejection in that area, then we will most likely see a drop through 1.1735 and into 1.1700.

Fundamental Outlook

The Euro will take center stage today, with the release of Eurozone’s Manufacturing and Services PMIs. These are surveys of purchasing managers from the Manufacturing and Services sectors that act as leading indicators of economic health but the impact is often limited. However, higher numbers usually strengthen the Euro. Both indicators are scheduled for release at 8:00 am GMT and the expected readings are 57.9 for the Manufacturing PMI and 55.7 for the Services PMI.

GBP/USD

After reaching the 50 period EMA the pair dropped into support but then the jumped on comments made by British Prime Minister May. However, most of the climb was erased soon after and overall price action remained choppy yesterday.

Technical Outlook

Price is trapped between the 50 EMA and the support at 1.3160, and is showing choppy behaviour. Today we will most likely see a breakout that will decide the next direction but until that happens, the picture is blurry. A move above the 50 EMA will make 1.3250 the next destination, while a break of 1.3160 will take the pair into 1.3100. As long as the pair is trading below the 50 EMA our bias is slightly bearish.

Fundamental Outlook

The Pound will not be affected by economic data today so the technical aspect will decide the pair’s direction.

855

FOREX NEWS: POUND SLIPS LOWER AHEAD OF BRITISH GDP. NEXT SUPPORT TARGETED?

EUR/USD

Forex News: Eurozone’s Manufacturing PMI showed a value above expectation but the Services PMI disappointed so economic data was mixed yesterday and didn’t have a strong impact on the currency. Overall the pair remained in a range, with a slight bullish bias.

Technical Outlook

Price is approaching the 50 period Exponential Moving Average and is testing the resistance at 1.1775. If this resistance zone will reject price lower, we expect to see a break of 1.1735 and a move into 1.1700. Lately, price action has been choppy and confined in a tight range, and this is usually a sign that the pair is preparing for a strong move.

Fundamental Outlook

At 12:30 pm GMT the U.S. Durable Goods Orders come out, showing changes in the total value of orders placed for goods with a life expectancy of at least three years. A higher value suggests increased economic activity and usually strengthens the greenback but to a limited extent. The forecast is a change of 1.1%, while the previous was 2.0%.

GBP/USD

Yesterday the Pound slipped below the support at 1.3160 after another failed attempt to move above the 50 EMA. It looks like the pair is picking up speed and is aiming for the next support.

Technical Outlook

The break of 1.3160 makes 1.3100 the next target but it must be noted that the pair is not in a strong trend although momentum currently belongs to the bears. The lack of a clear trend means that if price reaches support (1.3100 – 1.3090) and the Relative Strength Index becomes oversold, we may see a bounce higher. However, the bulls failed twice to break the 50 EMA during the recent period and the pair broke support, so the bias is clearly bearish at least for the short term.

Fundamental Outlook

The Preliminary version of the British Gross Domestic Product will be today’s main event for the Pound. The release is scheduled at 8:30 am GMT and the expected value is 0.3%. Since the GDP is the main gauge of overall economic performance and the Preliminary version is the most important, we expect to see Pound strength if higher values are posted, and weakness otherwise.

856

FOREX NEWS: BIG DAY FOR THE EURO: ECB INTEREST RATE AND DRAGHI’S PRESS CONFERENCE

EUR/USD

Forex News: The bulls dominated yesterday’s session although the U.S. Durable Goods Orders showed a value above expectations. The pair climbed above immediate resistance and above the 50 period EMA.

Technical Outlook

The level at 1.1775 and the 50 period EMA created a confluence zone of resistance and the break seen yesterday shows that the Euro is winning the short term battle with the US Dollar. A lot will depend today on the ECB interest rate announcement and Mario Draghi’s press conference that follows soon after, but strictly from a technical standpoint, we expect to see a move into 1.1840.

Fundamental Outlook

Today is Euro’s turn to take center stage as the European Central Bank will announce their interest rate at 11:45 am GMT and ECB President Draghi will hold his usual press conference at 12:30 pm GMT. The current rate is 0.00% and no change is expected but the press conference is usually the main market mover.

During the conference, Mario Draghi will talk about the rate decision and then will answer journalists’ questions; this second part of the session usually generates strong volatility but the direction will be decided by his answers and attitude. Caution is advised.

GBP/USD

The Pound strengthened and took the pair more than 150 pips higher yesterday, negating all the losses incurred a day before and extending gains. Most of the move was due to a better than expected British Preliminary GDP but also upbeat comments made by British politicians.

Technical Outlook

The Pound is fuelled by a positive economic sentiment and by hawkish comments made by politicians but the pair is currently struggling to break the key resistance at 1.3250. Also, strong and fast moves in one direction are usually followed by a retracement so we expect to see some sort of pullback before 1.3250 can be broken but the bias is bullish as long as the pair remains above the 50 EMA.

Fundamental Outlook

The Pound will not be affected by economic data today but potential comments made by UK politicians will have a direct impact on the currency.

857

FOREX NEWS: U.S. ADVANCE GDP: ENDING THE WEEK WITH A BANG?

EUR/USD

Forex News: After coming very close to the resistance at 1.1840, the pair dropped more than 100 pips due to dovish comments made by ECB President Mario Draghi. The ECB maintained the interest rate unchanged, as expected.

Technical Outlook

Yesterday’s move took the pair below the 50 period Exponential Moving Average and broke two support levels, showing that short term control belongs to the sellers. Although the latest move was strongly bearish, the pair is still considered in a range from a longer term perspective. The first place where a bounce higher can happen is the support at 1.1700, followed by 1.1670 but the chances of a climb will increase once the Relative Strength Index enters oversold.

Fundamental Outlook

At 12:30 pm GMT the Advance version of the U.S. Gross Domestic Product will be released, showing annualized changes in the total value of goods and services generated by the economy. This is the main gauge of an economy’s performance and the Advance version is the first in a series of three, thus it tends to have the strongest impact. The expected change is 2.5% and higher number are beneficial for the US Dollar.

GBP/USD

Yesterday the pair retraced some of the gains made a day before and descended again into the 50 period Exponential Moving Average, partly due to recovery signs shown by the US Dollar.

Technical Outlook

Lately we’ve seen increased volatility but the pair is still inside a range, without a clear bias. For today we expect to see a move into 1.3160, where action will probably stall while market participants decide the next move. An important role will be played by the U.S. Advance GDP but as long as price is trading below the 50 Exponential Moving Average, the technical bias is slightly bearish.

Fundamental Outlook

The United Kingdom didn’t schedule important economic data releases so all eyes will be on the US Dollar for the GDP numbers.

858

GDMFX ANNOUNCING NEW PLATFORM FOR BINARY OPTIONS

Pic_New Platform.jpg773×153 10.9 KB

GDMFX is announcing its new Binary Options cutting-edge platform developed in cooperation with one of the Global leading Binary Options technology providers and designed entirely around the feedback of Binary Options professional traders. The release date is scheduled for 1st of November 2017 together with a new approved company website.

Mr Stefan Taranchokov, Customer Support manager of GDMFX, was thrilled to share that a lot of exciting surprises will await the Binary Options traders around the release and that challenging as it was, the development of the new platform is the culmination of 2 years of dialogue between traders and the Customer Support team of the company.

859

FOREX NEWS: OVERSOLD LEVELS WARN OF POTENTIAL PULLBACKS. GERMAN CPI IN THE SPOTLIGHT

EUR/USD

Forex News: Friday’s trading session belonged to the bears and the pair continued on a downward path. The U.S. Advance GDP posted a value above expectations (actual 3.0%, forecast 2.6%) and this contributed to the drop.

Technical Outlook

The pair broke out of the range that it was in and the bias is clearly bearish but strong moves usually retrace after the initial momentum fades. Also, the Relative Strength Index is oversold and moving up and all this means that we will probably see a bounce above 1.1610. Once this retracement completes, we expect the bears to step in again, taking price at least into 1.1575.

Fundamental Outlook

The German Preliminary Consumer Price Index will be today’s main event, showing changes in the price that Germans pay for the goods and services they purchase. This is the main gauge of inflation and the German economy accounts for a major part of the entire Eurozone economy, so we can expect a hefty impact on the currency, with higher numbers strengthening it. The forecast is 0.1% and the time of release is 1:00 pm GMT.

GBP/USD

The US Dollar was boosted Friday by the better than expected U.S. Gross Domestic Product and the pair continued lower, breaching support. Later in the day we saw a bounce up, generated in part by profit taking.

Technical Outlook

Although the latest momentum is bearish, the pair is not in a downtrend and the support at 1.3100 is not broken. This suggests that price will probably continue upwards until 1.3160 is reached and possibly into the 50 period EMA but as long as these two resistances remain intact, our bias is bearish, anticipating a break of 1.3100.

Fundamental Outlook

The Net Lending to Individuals will be released today at 9:30 am GMT, and expected to show a reading of 5.5 Billion. The report shows changes in the total value of credit issued to individuals and has a positive impact on the Pound if it posts a higher than expected reading; however, the impact is usually low-to-medium.

860

FOREX NEWS: PAIRS ON THE RISE, OVERALL BIAS STILL NEGATIVE

EUR/USD

Forex News: The Euro pushed the pair above immediate resistance yesterday, although the German CPI came out slightly below expectations. However, the move was mostly technical and was anticipated due to the oversold condition of the pair.

Technical Outlook

Even if yesterday the pair moved upwards, the strength still favours the bears and we expect to see a continuation of the move seen the other week. If price continues higher, the first resistance will be encountered at 1.1670 but the extent of the climb should be limited and there’s a great probability for price to fall through 1.1610 – 1.1600 and into 1.1575.

Fundamental Outlook

Today at 10:00 am GMT we take a look at Eurozone inflation with the release of the European Consumer Price Index but we don’t expect a huge impact mostly because the German CPI, which accounts for a big part of overall inflation, was already released yesterday. However, higher numbers than the forecast 1.5% will probably strengthen the single currency.

At 2:00 pm GMT the US Dollar will be affected by the Consumer Confidence, which is a survey that gauges consumers’ opinions regarding the overall economic situation. Higher numbers than the forecast 121.1 show optimism and usually strengthen the US Dollar but to a limited extent.

GBP/USD

Yesterday’s session was controlled by the bulls, who managed to take the pair above the resistance at 1.3160 and above the 50 period EMA. The move was mostly technical and was predicted by the failed break of 1.3100.

Technical Outlook

As mentioned before, the pair is not in a downtrend and all moves in one direction are reversed, which is a characteristic of a ranging market. If the buyers can maintain the pair above the 50 period EMA, we will probably see a move into 1.3280 resistance but a quick move below the EMA and below 1.3160 would show that the balance of power is tilting towards the short side, so we will probably see another attempt to break 1.3100.

Fundamental Outlook

There’s nothing major on the Pound’s calendar for today, so the pair’s direction will be decided by the U.S. data and the technical aspect.

861

FOREX NEWS: US DOLLAR IN THE LIMELIGHT: FOMC RATE STATEMENT AND FIRST LOOK AT EMPLOYMENT DATA

EUR/USD

Forex News: The pair remained relatively quiet for the most part of yesterday’s trading session and no special developments took place. The U.S. Consumer Confidence survey posted a value above expectations but the impact was low.

Technical Outlook

The move up seen this week is still considered a normal retracement after a strong drop that took the Relative Strength Index into oversold territory. Our bias remains bearish as long as the pair is still trading below the 50 period Exponential moving Average but we don’t exclude a climb into 1.1670; however, the pair’s direction will be heavily affected by the fundamental side today.

Fundamental Outlook

At 12:15 pm GMT we take a first look at U.S. employment data with the release of the ADP Non-Farm Employment Change, which is a report that tries to mimic the more important Non-Farm Payrolls released by the Government Friday. The forecast is 191K and usually a higher change has a positive impact on the US Dollar.

Later in the day, at 6:00 pm GMT the FOMC will issue their Rate Statement, containing the rate decision and the reasons that determined it. No rate change is expected for today but if we will get any hints about the timing of the next hike, the US Dollar will probably have a strong reaction, so caution is advised.

GBP/USD

The pair continued higher yesterday, mostly backed by increased demand for the Pound due to rate hike expectations. Price remained above the 50 period EMA and pushed towards the resistance at 1.3280.

Technical Outlook

It’s very likely to see a touch of 1.3280 resistance, based on the positive sentiment that’s currently surrounding the Pound. However, if the pair reaches that level, probably the Relative Strength Index will become overbought or will touch its 70 level and this will increase the chances of a bounce lower. Overall the pair is still in a range and today we have important data for both currencies, so the technical side will be somewhat secondary.

Fundamental Outlook

The British Manufacturing PMI will be released today at 9:30 am GMT, showing the opinions of about 600 purchasing managers from the manufacturing sector about overall economic conditions in said sector. A higher number than the expected 55.9 usually strengthens the Pound, taking the pair higher and the opposite is true for a lower number.

862

FOREX NEWS: BANK OF ENGLAND EXPECTED TO HIKE. POUND LOADED AND READY TO SPIKE IN VOLATILITY

EUR/USD

Forex News: The pair remained relatively calm throughout yesterday’s trading session and the FOMC decided to maintain the rate unchanged as it was widely expected, so the impact was mild. However, price reached support on the back of upbeat information contained in the Rate Statement.

Technical Outlook

The pair has created short-time resistance around 1.1655 – 1.1660 and is now testing the support at 1.1610, with the oscillators showing a bearish bias. This means that the bullish pullback may be over and that we will see a break of the current support, followed by a move into the low at 1.1575; however, a bounce from 1.1610 – 1.1600 will most likely take the pair into the 50 period Exponential Moving Average. Our bias remains bearish and we consider the move up just a normal retracement after a big drop.

Fundamental Outlook

The U.S. Unemployment Claims will be today’s only highlight, scheduled at 12:30 pm GMT and expected to show a number of 235K. The indicator has a low-to-medium impact, mostly because it is released weekly so the changes are not significant; however, a higher number of unemployed individuals usually weakens the currency, due to consumer spending implications.

GBP/USD

Yesterday the Pound bulls took price above the resistance at 1.3280 on the back of a better than expected British Manufacturing PMI but the US Dollar made a comeback later in the session and brought the pair below the previously mentioned level.

Technical Outlook

Price shows rejection at 1.3320 and has moved below the previous resistance at 1.3280 after an overbought condition showed by the Relative Strength Index. These are clear bearish signs, which suggest that we will likely see an encounter with the 50 period Exponential Moving Average. That being said, today’s price action will be heavily affected by Bank of England’s rate decision, thus the technical aspect will be secondary.

Fundamental Outlook

Today is a huge day for the Pound, mainly because the Bank of England is expected to hike the interest rate from the current 0.25% to 0.50%. If this happens, we will likely see increased volatility and strength for the Pound.

The announcement is scheduled at 12:00 pm GMT and at the same time the BOE will release their Inflation Report, containing economic and inflation projections for the next 2 years. Half an hour later, at 12:30 pm GMT, BOE Governor Carney will hold a press conference, discussing the Inflation Report. This is another reason for increased volatility, so caution is strongly advised.

863

FOREX NEWS: US DOLLAR PREPARES FOR THE BIGGEST RELEASE OF THE WEEK: U.S. NON-FARM PAYROLLS

EUR/USD

Forex News: The pair behaved erratically yesterday and dropped below 1.1600 support just to jump higher immediately after. Price remained below the 50 period Exponential Moving Average but this type of price action calls for caution.

Technical Outlook

The last candle seen on the chart shows that volatility is high but the market is still unsure about the next direction. As long as the pair is trading below the 50 period EMA and below the resistance zone between 1.1670 – 1.1700, our bias remains bearish but as mentioned before, caution is advised because a clear direction cannot be predicted. Also, today’s technical aspect will be secondary to the fundamental due to the important NFP release.

Fundamental Outlook

The main event of the day is without a doubt the release of the U.S. Non-Farm Payrolls, a report that shows changes in the total number of employed people, excluding the farming industry. This is widely regarded as the most important U.S. jobs data and has a strong impact on the greenback almost every time. Today’s release is scheduled at 12:30 pm GMT and the expected change is 311K (previous -33K); higher numbers usually strengthen the greenback and show increased economic activity.

GBP/USD

The Bank of England decided to hike the interest rate to 0.50% but this was somewhat priced into the market, so the Pound was more affected by the forward guidance offered by the Bank, saying that “very gradual” increases are expected.

Technical Outlook

The strong move seen yesterday and the break of 1.3100 support could mean that the ranging period is over and that we will see a more directional behaviour in the future. For the short term we expect to see a touch of 1.3030 support where a retracement will probably occur. Of course, the pair’s movement today will be heavily affected by the U.S. employment data.

Fundamental Outlook

At 9:30 am GMT the British Services PMI is released, showing the opinions of purchasing managers about business and economic conditions in the services sector. A higher number than the anticipated 53.3 usually strengthens the currency but the impact is mild if the actual number matches expectations.

864

FOREX NEWS: US DOLLAR THREATENS SUPPORT DESPITE NFP COMING OUT BELOW EXPECTATIONS

EUR/USD

Forex News: The U.S. Non-Farm Payrolls released Friday failed to meet the market expectation of 312K but still showed a higher number than previous. This initially created a spike up, which was soon reversed and the pair ended the trading week on support.

Technical Outlook

Price action is choppy lately and the pair hasn’t made any clear moves after the drop into 1.1575. Currently it is stuck inside the horizontal channel created by 1.1610 support and 1.1670 resistance and until we see a clean break, we can expect more of the same choppy movement. However, the Euro bulls failed to take price above the 50 period EMA and the current momentum is bearish, with the US Dollar boosted by the Non-Farm Payrolls numbers. This makes us anticipate a break of current support, followed by a move into 1.1575.

Fundamental Outlook

We don’t have anything of note on the economic calendar for the Euro and US Dollar today but the Eurogroup Meetings take place and this may be a reason for increased volatility. However the Meetings are closed to the press and usually don’t have a huge impact unless some important decisions are made.

GBP/USD

The pair spiked above 1.3100 Friday at the time of the NFP release but the gains were soon erased after the market digested the numbers, so the session ended below resistance, very close to the opening of the day.

Technical Outlook

There is still bearish pressure on the pair and rejection at 1.3100 resistance was clearly seen Friday, so for today we expect a touch of 1.3030 support but the oscillators are not showing enough bearish momentum (Stochastic is oversold, RSI is approaching that territory). This means that a touch of 1.3030 will be probably followed by a bounce up; if that level is breached, then 1.3000 will be the next place where the pair may start to move up. A break of these levels will probably trigger an extended period of downside movement and would mark the end of the ranging phase.

Fundamental Outlook

The Pound will not be affected today by economic data releases, so the technical aspect will be the deciding factor for the pair’s direction.

865

FOREX NEWS: PAIRS DRIFTING WITHOUT CLEAR DIRECTION. ECB’S DRAGHI AND FED’S YELLEN SET TO DELIVER SPEECHES

EUR/USD

Forex News: Monday’s trading session had a bearish bias but overall action was slow and no major developments took place, mostly due to the lack of fundamental incentives.

Technical Outlook

Although price action was slow yesterday, the bears remained in control and took price close to the support located at 1.1575 but there’s an overall lack of conviction from both sides, so we may see a bounce higher when the pair will reach the support level mentioned earlier. The Relative Strength Index is approaching oversold, increasing the possibility of a move up. A clean break of 1.1575 would make 1.1480 the next target.

Fundamental Outlook

ECB President Mario Draghi will deliver opening remarks in Frankfurt at the ECB Forum on Banking Supervision, at 9:00 am GMT. Later in the day, at 7:30 pm GMT, Fed Chair Yellen will speak in Washington DC, accepting the Paul H. Douglas Award for Ethics in Government. We don’t expect these speeches to generate huge volatility because they are not directly related to monetary policy, but caution is advised nonetheless.

GBP/USD

The pair had a bullish bias yesterday and moved again above 1.3100 but at the time of writing price is still hovering near the level so a clear break hasn’t occurred. The economic scene lacked important releases so the move was mostly technical.

Technical Outlook

If the bulls can maintain price above 1.3100, we will most likely see a move into the 50 period Exponential Moving Average but as long as that line remains resistance, our bias is bearish. If the pair drops below 1.3100, we expect a touch of 1.3030 and possibly 1.3000. The Pound is still very vulnerable to any Brexit talks so it can jump or drop at any time and this makes the entire picture unclear.

Fundamental Outlook

The Pound will not be affected today by major economic data, so the technical aspect will decide the pair’s direction.