FOREX NEWS: MIXED MOVEMENT AHEAD OF YELLEN’S SPEECH AND CONSUMER CONFIDENCE SURVEY
EUR/USD
Forex News: Yesterday the pair still had a lot of volatility but not as high as the day before and we saw price fall below main support just to return above it soon after. US economic data came out slightly better than anticipated but we couldn’t see major impact at the time.
Technical Outlook
The support at 1.2750 was pierced but price soon returned above it and this makes the high at 1.2886 the next target for the pair. To the downside, the zone around 1.2750 will still offer some support but a clear close of a four hour candle below it will make 1.2660 the immediate target. We have two important US events today and these will probably determine the day’s bias.
Fundamental Outlook
Fed Chair Janet Yellen will speak today at 12:30 pm GMT at a Conference held at the Federal Reserve Bank of Boston. As always, her speeches can be a reason for sharp moves and caution is recommended. Later in the day, at 1:55 pm GMT, the University of Michigan will release the Consumer Sentiment survey which acts as a leading indicator of consumer spending because usually a person confident in the economic situation of the country will spend more. Today’s expected number is 84.3, a small decrease from last month’s 84.6 and lower numbers will have a negative impact on the greenback.
GBP/USD
The Pound tried one more time to break support but the bulls took control yesterday and the pair reached resistance once again, so it looks like the disappointing value of the US Retail Sales continues to have a bad influence on the US Dollar.
Technical Outlook
If the level at 1.6060 can be broken decisively today, we are likely to see a climb close to 1.6160 and the downtrend will be severely weakened. A break of 1.6060 would also mean that price is trading above the 50 period Exponential Moving Average which will then offer dynamic support and this would shift the balance on favor of the bulls. Throughout the day, keep an eye for any possible overbought condition signaled by the Relative Strength Index because this would increase the chances of bearish price action.
Fundamental Outlook
The Pound will not be affected by major news releases today so price direction will be influenced by technical factors and the US events.
EUR/USD
Forex News: A survey released Friday by the University of Michigan showed that confidence among American consumers has increased and this brought the pair lower in the second part of the day, on the back of US Dollar strength.
Technical Outlook
Currently the pair is trading close to the support at 1.2750, above the 50 period Exponential Moving Average; because no major news releases are scheduled today and Mondays are usually slow days, we believe that price will not break the two forms of support mentioned above. We expect ranging movement above and below 1.2750, capped to the downside by the Moving Average. Resistance is located in the zone around 1.2835 – 1.2845 but we don’t anticipate a move above the zone.
Fundamental Outlook
The German Bundesbank Monthly Report is released today at 10:00 am GMT and this will be the day’s only notable event. The report contains a detailed analysis of current and future economic conditions as seen by the German Central Bank and can strengthen the Euro if it is more hawkish than expected.
GBP/USD
After a brief dip below support, the pair ranged above 1.6060 and overall the day didn’t offer strong moves or important breaks of S/R levels.
Technical Outlook
Today we expect another encounter with 1.6060 support which in combination with the 50 period Exponential Moving Average will create a confluence zone. Since the fundamental scene is pretty calm today, we believe the pair will trade between 1.6060 support and 1.6160 resistance, but a break of any of these levels will most likely trigger an expended move in the direction of the break.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases for the day, so the technical aspect will determine the day’s bias.
EUR/USD
Forex News: The pair had a slow start of the week and price remained above support but movement was mostly ranging and a lot of indecision was present.
Technical Outlook
On a four hour chart we have a few candles with long wicks in both their upper and lower parts, a thing which suggests indecision regarding the next direction. The support at 1.2750 is holding for the moment and price bounced on the 50 period Exponential Moving Average, facts which indicate a potential climb into 1.2835 resistance. On the other hand, a break of 1.2750 would open the door for a move towards 1.2660.
Fundamental Outlook
At 2:00 pm GMT the US Existing Home Sales are released, with an anticipated change from the previous 5.05M to 5.11M. The indicator shows the annualized number of homes sold during the last month and an increase usually suggests economic expansion, hence a potentially stronger US Dollar.
GBP/USD
The pair also had a slow day yesterday, but movement was mostly bullish and price moved north, in close vicinity of resistance. No major news came out and the technical aspect held center stage.
Technical Outlook
As the pair is approaching 1.6160 resistance, a “bounce or break” scenario begins to develop: a bullish break would probably take the pair into 1.6250 resistance while a bounce lower would make 1.6060 the next target. The Relative Strength Index is not showing an overbought condition but it is moving close to the 70 level and this could make further bullish advances more difficult.
Fundamental Outlook
The British Office for National Statistics will announce at 8:30 am GMT the Public Sector Net Borrowing. A negative number indicates a surplus while a positive figure shows deficit so the Pound would strengthen if a lower number will be posted today. The forecast is 9.3B while last month’s value was 10.9B.
EUR/USD
Forex News: Yesterday the pair made a sharp reversal after an almost perfect bounce off of resistance and the rest of the day was controlled by the bears. Euro weakness was generated by speculation that the ECB may increase stimulus in order to boost the economy.
Technical Outlook
The Euro received another blow yesterday and dropped immediately after touching 1.2835 resistance; the support at 1.2750 was broken and price continued through the 50 period Exponential Moving Average. These facts combined with the strength and speed of yesterday’s move makes us believe that today the pair will travel close to the support located at 1.2660.
Fundamental Outlook
American inflation will hold center stage today as the CORE version of the Consumer Price Index is released. This is an important gauge of overall inflation and the Core version excludes automobiles from calculation as they sometimes distort the data because of big fluctuations in automobile sales. The expected change is 0.2% while last month the value was 0.0% and usually a higher than expected number strengthens the US Dollar.
GBP/USD
The Pound moved a lot slower than the Euro yesterday and a lackluster fundamental scene was probably the reason for the low volatility. Resistance couldn’t be broken and price traveled slowly to the downside.
Technical Outlook
We consider the inability of the bulls to break the resistance at 1.6160 a sign of weakness and a hint that bears will step in to take control of the pair. The Relative Strength Index touched the 70 level (which indicates overbought) and is now curving downwards, increasing the chances of a move into 1.6060 support. The 50 period Exponential Moving Average will provide the first form of support if price will indeed start to move south.
Fundamental Outlook
The Bank of England will announce the Official Rate Votes today at 8:30 am GMT. Last month, 2 of the 9 members voted to increase the interest rate and if this structure will remain unchanged we probably won’t see a lot of volatility. However, if more members voted for a rate increase, the Pound will most likely strengthen and the opposite is valid if fewer members voted for a rate hike. Inflation in the US will also affect the pair’s movement directly.
FOREX NEWS: US DOLLAR STRENGTH PUTS THE BEARS BACK IN CONTROL. RETRACEMENTS EXPECTED
EUR/USD
Forex News: The US Dollar gained against the Euro and most of its other counterparts as inflation in the United States increased unexpectedly. The pair had a bearish day yesterday and support was touched.
Technical Outlook
The support at 1.2660 was touched yesterday and price moved below the 50 period Exponential Moving Average, things which show that we are trading in a bearish market. A break of the current support zone would make 1.2500 the next target but before that can happen, price will most likely stall around 1.2660. The Relative Strength Index is approaching the 30 level which indicates an oversold market and this increases the chances of bullish moves.
Fundamental Outlook
At 7:00 am GMT France will release the Manufacturing Purchasing Managers’ Index, a survey which shows the level of optimism among purchasing managers regarding the current and future economic conditions in the manufacturing sector. The expected number is 48.6 and higher values will most likely strengthen the Euro. Half an hour later, at 7:30 am GMT, Germany will release the indicator with the same name; the forecast is 49.6 and the Euro will be positively affected by a higher number.
GBP/USD
The pair traveled south yesterday as the votes on the latest interest rate decision showed that Bank of England officials see risk for the growth of the UK economy. This dampened the appeal of the Pound and triggered and extended bearish move.
Technical Outlook
Although the support level at 1.6060 was pierced, we didn’t see a clear break. Price is trading below the 50 period Exponential Moving Average and this will be the first form of resistance if the pair will bounce higher. Today’s direction will be heavily influenced by the fundamental aspect, making the technical part somewhat secondary.
Fundamental Outlook
The British Retail Sales are released at 8:30 am GMT with an expected decrease from last month’s 0.4% to -0.1%. Since the retail sector is of crucial importance for overall economic activity, a decrease would negatively affect the Pound and would take the pair lower. Usually the Retail Sales release creates strong moves so we recommend caution if trading at the time.
FOREX NEWS: UNITED KINGDOM’S GDP AND AMERICAN HOUSING DATA, THE FINAL HEADLINES OF THE WEEK
EUR/USD
Forex News: Euro strength was seen yesterday once a German Manufacturing survey posted better than expected numbers. However, the pair failed to break resistance and price returned lower later in the day.
Technical Outlook
Yesterday’s trading session was not characterized by one sided price action and the pair reversed soon after crossing 1.2660 to the upside. There is still a lot of bearish pressure as shown by yesterday’s failed attempt to break 1.2660 resistance but we expect mostly ranging movement today. The first lower level of importance is located at 1.2610, while a move above 1.2660 and the 50 period Exponential Moving Average would put the bulls in control.
Fundamental Outlook
The US Dollar will be affected today by the New Home Sales release scheduled at 2:00 pm GMT. Usually people buy a new house in times of economic expansion and this triggers additional expenses (furniture, electronic appliances, etc.), thus higher numbers for today’s release will have a positive impact on the greenback. The forecast is 473K while last month’s number was 504K.
GBP/USD
British Retail Sales disappointed yesterday, triggering a bearish move below support. However, the sellers couldn’t maintain their control over the pair and price moved north later in the day.
Technical Outlook
The choppy price action seen yesterday paints an unclear picture with long wicked candles which suggest indecision. Resistance sits at 1.6060 while first major support is located at 1.5900 and the day’s direction will be dictated by the value of the British Gross Domestic Product which is the main gauge of an economy’s overall performance.
Fundamental Outlook
The release of United Kingdom’s GDP is scheduled at 8:30 am GMT and the expected value is 0.7%, a decrease from the previous 0.9%. This would be another blow to British economic recovery and would weaken the Pound, driving the pair lower. As always, the US events will have a direct impact on the pair’s direction.
EUR/USD
Forex News: Friday’s price behavior was influenced by rumors regarding the European Banks stress tests and the bulls reversed an initial move below support. Although price action was choppy, the day and week ended above support.
Technical Outlook
The pair’s movement will be heavily affected by the European Banks stress tests released Sunday and some irregular volatility might be experienced throughout the day. The important levels are 1.2660 to the downside and 1.2695 (Friday’s high) to the upside. A break of either one would expose the resistance at 1.2750 or the support zone between 1.2620 and 1.2600 and could trigger an extended move in that direction.
Fundamental Outlook
The German IFO Business Climate survey is released today at 9:00 am GMT. The importance of this survey comes from its large sample of about 7,000 businesses but also from the fact that it acts as a leading indicator of optimism and economic health. The anticipated value is 104.6 and higher numbers usually have a positive impact on the Euro.
The US Pending Home Sales will be released at 2:00 pm GMT and expected to increase 1.1% from last month’s -1.0%, a fact which would strengthen the greenback.
GBP/USD
United Kingdom’s Preliminary Gross Domestic Product posted the anticipated value Friday but this was interpreted as bullish by most market participants and the Pound strengthened, finishing the week above 1.6060.
Technical Outlook
Although the pair climbed above resistance, the move doesn’t seem to be backed by strong fundamentals and could be easily reversed. If price moves below the 50 period Exponential Moving Average and below 1.6060, the first target will be represented by the minor support at 1.6000. If 1.6060 will be successfully tested from above and turns into support, price will head towards the next resistance which is located at 1.6180 but we don’t expect it to travel the entire distance unless surprising events take place.
Fundamental Outlook
The Confederation of British Industry (CBI) will announce today at 11:00 am GMT the Realized Sales. This index is a leading indicator of consumer spending because the sales made by wholesalers and retailers are directly influenced by consumers. Today’s anticipated value is 35 and numbers above it usually strengthen the Pound, suggesting increased economic activity.
FOREX NEWS: RESISTANCE AHEAD. US DATA DETERMINES THE DAY’S BIAS
EUR/USD
Forex News: Yesterday the pair’s behavior was mainly influenced by the fundamental aspect as we saw a weak Euro once a worse than anticipated value of the German IFO survey was posted, followed by US Dollar weakness when the Pending Home Sales failed to meet analysts’ expectations.
Technical Outlook
The latest momentum belongs to the Euro bulls on the back of a weak Dollar but on an hourly chart we can note the Relative Strength Index is approaching overbought territory and this may trigger some bearish price action. The 50 period Exponential Moving Average is now sitting below price and will offer support if touched from above; the first upper target is located at 1.2750 while support is represented by 1.2620 if the Moving Average is broken.
Fundamental Outlook
At 12:30 pm GMT the American Durable Goods Orders are announced, showing the change in orders for goods with a life expectancy of at least 3 years. Analysts expect a change of 0.4%, a huge difference from last month’s -18.4% and we believe that any value close to this expectation would strengthen the US Dollar.
Later in the day, at 2:00 pm GMT a US Consumer Confidence survey is released and expected to change from 86.0 to 87.4. A higher number would also benefit the US Dollar because confidence among consumers is often an indication of increased retail sales in the near future.
GBP/USD
The Pound continued to climb higher on the back of a better than anticipated value of the CBI Realized Sales and is now trading above a four-hour 50 period Exponential Moving Average. Overall yesterday the pair moved in one direction, without sharp reversals.
Technical Outlook
The peak at 1.6180 is considered the pair’s first target and also the first place where the bulls may encounter some resistance. If price will indeed reach this level and the Relative Strength Index will enter overbought territory, the chances of a bounce lower will be increased. To the downside the first support is offered by the 50 period Exponential Moving Average, followed by the level at 1.6060.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so price action will be affected by the technical aspect and by the US indicators mentioned earlier.
FOREX NEWS: US MONETARY POLICY IN THE SPOTLIGHT. VOLATILITY INCREASES
EUR/USD
Forex News: The Durable Goods Orders disappointed yesterday, posting a reading of -1.3% which weakened the US Dollar and allowed the pair to move straight up into major resistance. Later in the day, an optimistic value of the US Consumer Confidence survey erased some of the greenback’s losses.
Technical Outlook
On the hourly chart above, we can note the pair is having some difficulty breaking 1.2750 resistance and on top of that, the Relative Strength Index has reached overbought. Although the overbought condition is not an extreme one, we expect the pair to bounce lower, possibly for a touch of the 50 period Exponential Moving Average. If 1.2750 is broken, the next resistance is located at 1.2835.
Fundamental Outlook
The day’s main event is represented by the US interest rate announcement, together with the FOMC Rate Statement, both scheduled at 6:00 pm GMT. The rate is not expected to change from the current <0.25% but the biggest market mover will probably be the FOMC statement which will offer hints about future monetary policy and the reasons which stood behind the rate decision. A positive outlook contained by this Statement will most likely strengthen the US Dollar.
GBP/USD
Similar to the Euro, the Pound gained against the greenback and resistance was touched but a break didn’t occur. Overall we had a bullish day, with price controlled by the buyers.
Technical Outlook
Once price reached 1.6180 resistance, bullish momentum dampened and the action slowed down. Before this level can be broken, we expect small pullbacks lower and if a break will occur, the level needs to be tested from above for the pair to be considered a true one. To the downside, the first dynamic support is represented by the Exponential Moving Average while horizontal support sits at 1.6060.
Fundamental Outlook
At 9:30 am GMT the British Net Lending to Individuals value is announced; the indicator shows the sum of new credit issued to clients and higher numbers are considered bullish because they indicate a thriving economy where people are confident and willing to spend money. On the other hand, it also indicates that banks are comfortable issuing those loans. The expected value is 2.8B, a decrease from the previous 3.2B and higher than anticipated readings will most likely strengthen the Pound. Of course, the US events will have a direct impact on the pair’s movement.
FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP HOLD CENTER STAGE
EUR/USD
Forex News: Before the US interest rate and FOMC Statement were released, the pair climbed above resistance after a shallow pullback but the Fed ended their bond buying program, indicating optimism and the US Dollar strengthened substantially against most of its peers.
Technical Outlook
The pair dropped more than 120 pips once the Fed decision was made public and we expect this bearish momentum to continue today. The first barrier which needs to be broken is represented by the support at 1.2620, followed by 1.2500. Although we believe the first support will be broken, we don’t expect the second one to be even touched; of course, depending on the important events scheduled for today, 1.2500 could be reached.
Fundamental Outlook
German inflation data is released today at 12:00 pm GMT (Preliminary CPI); analysts expect a negative change of -0.1% compared with last month’s 0.0% and this would weaken the Euro especially since lately the ECB tries without notable success to increase inflation in the Euro Zone.
The American Advance Gross Domestic Product will be released at 12:30 pm GMT, with an anticipated value of 3.1% compared with last month’s 4.6%. Since the GDP is an economy’s main gauge of performance, a lower than anticipated value signifies a contracting economy and could weaken the US Dollar. Half an hour later, at 1:00 pm GMT Fed Chair Janet Yellen will deliver a speech but we don’t expect it to be a major market mover; however, surprises can happen so we recommend caution nonetheless.
GBP/USD
Yesterday, prior to the US releases the pair bounced lower at resistance but massive US Dollar strength seen later in the day triggered a huge selloff, taking price below support.
Technical Outlook
The level at 1.6060 was broken decisively and the pair is trading close to 1.6000; we expect this level to be broken today and the pair to start heading towards the next support, located at 1.5900. However, the Relative Strength Index will soon reach oversold territory and this will probably trigger some bullish pullbacks but we don’t believe it will completely reverse price action.
Fundamental Outlook
The British fundamental scene is slow today and the pair’s direction will be almost completely determined by the US events and by the technical aspect.
FOREX NEWS: MIXED PRICE ACTION AHEAD OF EUROPEAN INFLATION DATA
EUR/USD
Forex News: German inflation dropped yesterday more than analysts anticipated and the US Gross Domestic Product increased 3.5% while the anticipated value was 3.1%. Al this generated another bearish push for the pair during the first part of the day but a pullback occurred in the second part.
Technical Outlook
The bullish move seen yesterday doesn’t seem to have a clear reason and we expect the sellers to continue their assault on support today. The pair is currently testing the level at 1.2620 from below and we favor a bounce lower which will take price in close vicinity of 1.2500 key support. The Relative Strength Index is close to oversold (probably this had something to do with yesterday’s rise) but we don’t consider the position of the RSI something that could fully reverse price direction. However, if 1.2620 is broken to the upside, the next target will be represented by the 50 period Exponential Moving Average.
Fundamental Outlook
The day’s main event is the release of the European Preliminary Consumer Price Index scheduled at 10:00 am GMT. European inflation is a major concern for the ECB as their desired target is just below 2.0% and the current value of 0.3% is considered too low. For today’s release, analysts expect a rise of 0.4% and probably if this value will not be reached, the Euro will weaken, allowing the pair to descend.
GBP/USD
Although the pair moved lower when the better than expected value of the American GDP was posted, it soon began to climb, breaking 1.6000 to the upside and overall yesterday price was controlled by the bulls.
Technical Outlook
Today we expect the bearish pressure to take the pair lower, probably below 1.6000 as the latest move north is considered just a correction. If price continues to move to the upside, the 50 period Exponential Moving Average combined with the level at 1.6060 will provide resistance and the chances of bearish movement will substantially increase if that confluence zone will be reached.
Fundamental Outlook
From a fundamental point of view the entire week has been slow for the United Kingdom and the same is valid for today as no major economic or financial indicators are released. Price direction will be mainly affected by the technical aspect.
FOREX NEWS: SUPPORT THREATENED AHEAD OF MANUFACTURING PMI RELEASES
EUR/USD
Forex News: Friday’s session was controlled by the bears and the pair remained below its resistance. This was mostly triggered by the fact that Euro Zone inflation didn’t show any clear sign of improvement, coupled with optimistic US economic data.
Technical Outlook
Once the pair touched 1.2500 support, it immediately bounced higher, showing signs of rejection; also, the Relative Strength Index is close to the 30 level which suggests a possible oversold condition. These factors make us believe that today we will see a retracement higher before the pair will make another attempt to break 1.2500 support, heading towards 1.2440.
Fundamental Outlook
At 3:00 pm GMT the US Manufacturing PMI is announced and expected to remain almost unchanged at 56.5 compared with last month’s 56.6. This is a survey of about 400 purchasing managers from the Manufacturing sector and acts as a leading indicator of optimism and economic health, thus higher numbers can strengthen the US Dollar, driving the pair lower.
GBP/USD
The pair showed choppy price action Friday as it failed to move away from the level at 1.6000. All moves were quickly reversed and neither side was in clear control.
Technical Outlook
Friday’s choppy action makes the picture unclear for today and the pair is range-bound below 1.6000. Once price moves away from this level, we can expect a touch of either 1.6060 resistance or 1.5900 support but the direction will be decided by the economic data scheduled for release.
Fundamental Outlook
The British Manufacturing PMI is released at 9:30 am GMT. As mentioned before, the PMI is a survey derived from the opinions of purchasing managers from the Manufacturing sector and indicates the levels of optimism. A value above the anticipated 51.5 has the potential to strengthen the Pound, taking the pair higher and the opposite is true for a value below expectations.
FOREX NEWS: BEARS MAINTAIN CONTROL AS LONG AS RESISTANCE REMAINS INTACT
EUR/USD
Forex News: The week opened with a downside gap and on top of that, US Dollar strength generated by a better than expected American Manufacturing PMI took the pair into the support at 1.2440. However, price remained close to 1.2500 for most of the day.
Technical Outlook
The Relative Strength Index on a four hour chart is hovering near the 30 level which indicates oversold and the pair bounced higher after touching the support at 1.2440. Although these are bullish signs, the pair is in a downtrend and the strength still belongs to the bears so further advances to the south are not out of the question but 1.2440 remains the first barrier. To the upside, the 50 period Exponential Moving Average can provide resistance, as well as the current level at 1.2500.
Fundamental Outlook
The most important event of the day is the US Trade Balance scheduled for release at 1:30 pm GMT. This indicator measures the difference between imported and exported goods and a negative number suggests that imports exceeded exports; a higher number than the anticipated -40.0B can have a positive impact on the greenback as it shows increased demand for American goods and services.
GBP/USD
The British Manufacturing PMI posted a value which exceeded analysts’ expectations but this strengthened the Pound only for a brief moment and the bulls failed to capitalize on the news.
Technical Outlook
The strength generated by the positive British news found resistance at 1.6000 and the pair started to move lower for the remainder of the day but overall neither bulls nor bears managed to gain a clear advantage. However, the pair remains below resistance, without being oversold so we consider the bias remains bearish as long as 1.6000 is not breached. The first support is located at 1.5900.
Fundamental Outlook
The British Construction PMI is announced today at 9:30 am GMT and is expected to decrease slightly from last month’s 64.2 to 63.5. The indicator is a survey of purchasing managers from the construction sector and tries to gauge their optimism regarding economic and business conditions, thus a higher value can strengthen the Pound, taking the pair higher.
FOREX NEWS: FIRST US EMPLOYMENT DATA OF THE WEEK COULD SHAKE THE MARKET
EUR/USD
Forex News: The bulls managed to break resistance yesterday as the Euro gained against a US Dollar weakened by a disappointing Trade Balance. Later in the evening rumors about turmoil within the ECB generated increased volatility and some strong movement.
Technical Outlook
The pair moved above the resistance at 1.2500 which has now turned into support and the short term bias is bullish. The Relative Strength Index is angled upwards, after being previously oversold and this indicates that further advances can be made, aiming towards 1.2620 resistance. The 50 period Exponential Moving Average is the first barrier in front of rising prices and a place where bullish movement can be reversed.
Fundamental Outlook
Today’s main event is the release of the ADP Non Farm Employment Change scheduled at 1:15 pm GMT. This report is put together by a privately owned company and tries to mimic the government employment data (NFP) which comes out Friday. A higher number than the expected 214K would strengthen the greenback because increased job creation suggests a thriving economy and acts as a leading indicator of consumer spending.
GBP/USD
Yesterday the pair had very slow and choppy price action, with its biggest move happening at the time of the British Construction data release. The worse than anticipated value weakened the Pound but this weakness didn’t last long and the pair continued slowly upwards.
Technical Outlook
Yesterday’s price action was inconclusive and does not offer a lot of hints regarding today’s probable direction. However, the Relative Strength Index is angled upwards, so we may see a touch of 1.6060 resistance if the bulls manage to keep price above 1.6000. The 50 period Exponential Moving Average is the first barrier and we may see a bounce lower once price touches it; if this happens, we believe 1.6000 will be broken to the downside.
Fundamental Outlook
The final British Purchasing Managers’ Index of the week is released today at 9:30 am GMT: the Services PMI. This survey acts as a leading indicator of economic health and higher numbers suggest optimism among purchasing managers from the services sector, thus the Pound tends to strengthen. The forecast is 58.5 while last month’s value was slightly higher at 58.7.
FOREX NEWS: ECB’S RATE DECISION AND PRESS CONFERENCE SET THE STAGE FOR SHARP MOVES
EUR/USD
Forex News: The US Dollar strengthened yesterday even before the ADP employment data was released and a better than anticipated value for this indicator added fuel to the downwards momentum. The day was controlled by the bears and today we expect further advances.
Technical Outlook
The level at 1.2500 was broken to the downside and price didn’t even pause before moving past it, showing that the latest move has momentum and that 1.2440 is the pair’s next target. If this support is breached, the next one is located at 1.2280 but probably more than one day will pass before the pair reaches it. Today’s price direction will be mostly influenced by the ECB Press Conference so the technical side will be secondary.
Fundamental Outlook
At 12:45 pm GMT the ECB will announce their interest rate decision, with no change expected from the current 0.05% but the more important event is the ECB Press Conference scheduled at 1:30 pm GMT. ECB President Mario Draghi will read a prepared statement and then will answer journalists’ questions; this second part of the press conference is usually the one that triggers strong and often irregular movement. Caution is recommended if trading during the Press Conference.
GBP/USD
The Pound suffered losses during the first part of yesterday after a worse than expected value of the Services PMI was posted, but most of these loses were erased in the second part of the day, even if the US Dollar strengthened against other currencies.
Technical Outlook
Yesterday price bounced between the resistance at 1.6000 and the support at 1.5900, traveling the entire distance down then climbing back up close to resistance. Whichever level is breached first today will probably determine an extended move in that direction but we consider resistance harder to break because the 50 period Exponential Moving Average is in close vicinity.
Fundamental Outlook
The British Manufacturing Production numbers come out at 9:30 am GMT, showing the change in the total value of goods produced by the manufacturing sector. Last month’s value was 0.1% and the forecast for today’s indicator is 0.3%; a higher value would be beneficial for the Pound, taking the pair higher. Later in the day, at 12:00 pm GMT the Bank of England will announce the Interest Rate but no change is anticipated from the current 0.50%. However, caution is recommended as the market can react strongly to speculation about a future rate change.
FOREX NEWS: FINISHING THE WEEK WITH A BANG: THE US NON FARM EMPLOYMENT REPORT
EUR/USD
Forex News: Although the ECB kept rates unchanged at a record low, the Euro weakened yesterday against most of its peers and a sharp fall was seen in our pair when ECB President Mario Draghi commented that additional stimulus measures will be used if needed.
Technical Outlook
The support at 1.2440 was breached yesterday but price soon retraced for a re-test; if the pair will rebound here, the level will turn into resistance and further down swings are anticipated. The Relative Strength Index is not signaling an extreme oversold situation and momentum belongs to the bears but the US employment report released today will strongly affect the US Dollar and will probably determine the day’s bias.
Fundamental Outlook
The main event of the day is scheduled at 1:30 pm GMT in the form of the US Non Farm Employment Change, also known as Non Farm Payrolls. This is considered the most important jobs related data coming from the United States and a higher number can strengthen the greenback substantially as more jobs indicate that consumer spending is likely to increase in the near future. The expected number is 229K, a drop from last month’s 248K. Later in the day, at 3:15 pm GMT, Fed Chair Janet Yellen will speak at a Symposium in Paris; audience questions are expected and volatility can increase so caution is recommended.
GBP/USD
The Bank of England decided to keep rates unchanged as expected but the pair had similar behavior to the EUR/USD and price moved into support after bouncing at resistance.
Technical Outlook
The 50 period Exponential Moving Average combined with the level at 1.6000 offered enough resistance for price to bounce lower and to maintain that direction for almost the entire day. On the other hand, the level at 1.5900 couldn’t be broken and we saw the pair pause there so we can’t consider either side to be in clear control. On top of that, today’s technical aspect will be secondary as the US employment data will hold center stage.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases today so price direction will be mainly affected by the US events.
FOREX NEWS: BOUNCE AT SUPPORT: SIMPLE RETRACEMENT OR A REVERSAL IN THE MAKING?
EUR/USD
Forex News: The American Non Farm Payrolls showed a disappointing number for Friday’s release and the US Dollar weakened as a result, allowing the pair to climb above short term resistance. At the time of the release price action was choppy and some whipsaws could be seen on the lower time frames.
Technical Outlook
Although price crossed 1.2440 to the upside, the main picture still remains bearish as the pair is still below its 50 period Exponential Moving Average and below 1.2500 resistance. The first barrier the bears need to break is the current level at 1.2440 followed by 1.2360 but today we don’t expect major moves as the fundamental scene holds no special events.
Fundamental Outlook
The release of the Sentix Investor Confidence survey is the only thing that could affect the Euro today but overall we have a calm day. The survey is based on the opinions of about 2,800 investors and analysts regarding economic health, but usually it doesn’t create strong movement unless a big difference between forecast and actual number is posted. The scheduled time is 9:30 am GMT and the forecast is -6.9.
GBP/USD
Price direction was affected Friday by the US employment report and overall the pair moved similar to the EUR/USD, climbing due to a weak greenback.
Technical Outlook
Although the Dollar showed signs of weakness, the Pound bulls couldn’t break or even touch the resistance at 1.5900. From a strictly technical point of view, Friday’s climb can be attributed to bullish divergence present on a four-hour chart and can be considered a simple retracement in a downtrend. For today we expect a bounce at 1.5900, followed by a move lower but if this level will be breached, the 50 period Exponential Moving Average will be the next resistance; support sits at 1.5790, Friday’s low.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases for the day so price action will be determined by the technical aspect.
FOREX NEWS: BANK HOLIDAYS MAY TRIGGER IRREGULAR VOLATILITY
EUR/USD
Forex News: The pair continued to move higher yesterday, on the back of a US Dollar weakened by Friday’s disappointing NFP result. However, resistance couldn’t be surpassed and a bounce lower was seen in the second part of the day.
Technical Outlook
The resistance located at 1.2500 combined with the 50 period Exponential Moving Average created a confluence zone which proved enough motive for the pair to start to move on a bearish path. Now 1.2440 has turned into support once again and a break would make 1.2360 the next target; we favor this scenario as the bears still have underlying strength and a downtrend is still in place.
Fundamental Outlook
American Banks will be closed today, celebrating Veterans Day and French Banks will be closed in celebration of Armistice Day. This means that no major indicators will be released and that price direction will be mainly influenced by the technical aspect.
GBP/USD
The pair spent a lot of time yesterday near the resistance at 1.5900 before finally dropping in the second part of the day as the bulls made several failed attempts to break the mentioned level.
Technical Outlook
On an hourly chart, price moved back below the 50 period Exponential Moving Average and the resistance at 1.5900 couldn’t be clearly broken although several candles pierced it. These are bearish signs which make us believe that today the sellers will be in control of the pair and will take it lower. The first potential support is located at 1.5790 but a break of this level is not anticipated although we expect price to move towards it. For the time being, the level at 1.5900 is still resistance.
Fundamental Outlook
The Pound will not be affected today by important news releases and the fact that American Banks are closed may generate irregular volatility.
FOREX NEWS: BRITISH INFLATION REPORT AND CARNEY’S SPEECH TAKE CENTER STAGE
EUR/USD
Forex News: Yesterday the pair moved very slowly compared to the way it has moved during the last period and clear direction lacked. However, the bulls showed more strength and price traveled upwards for the most part of the day.
Technical Outlook
The latest move north is not very convincing and we anticipate that price will drop towards the support at 1.2360 if the resistance at 1.2440 is not broken soon. The 50 period Exponential Moving Average is above price, a fact which means that the picture remains bearish. On the other hand, a break of 1.2440 resistance would open the door for a move towards 1.2500 and would make the short term bias bullish.
Fundamental Outlook
Euro Zone’s Industrial Production is announced today at 10:00 am GMT and is expected to change 0.6% while last month’s value was -1.8%. The indicator measures the change in the value of output produced by manufacturers and a higher number suggests a thriving economy and usually strengthens the Euro.
GBP/USD
The pair had a slow day as well and probably a big role was played by the fact that yesterday US Banks were closed. For most of the day control did not clearly belong to either side but overall the bulls were more prominent.
Technical Outlook
The current direction is likely to remain unchanged until 1.5900 is touched and if that happens, we anticipate a bounce lower. On the other hand, a break of resistance followed by a successful re-test will most likely bring in more buyers and the bias will turn bullish.
Fundamental Outlook
The British Claimant Count Change is released today at 9:30 am GMT; the indicator shows how many people applied for social help due to unemployment compared with the previous month and lower numbers are beneficial for the currency. The anticipated change is -24.9K while the previous was -18.6.
At 10:30 am GMT the BoE will release the Inflation Report and Governor Mark Carney will hold a press conference discussing the report which contains an outlook for inflation for the next 2 years. Carney’s speech will probably be the day’s most important event and volatility is likely to increase at the time so caution is recommended.
FOREX NEWS: EURO BREAKOUTS ANTICIPATED WHILE THE POUND STRUGGLES TO OVERCOME SUPPORT
EUR/USD
Forex News: Euro Zone’s Industrial Production came out as anticipated, with a change of 0.6% so the event didn’t generate substantial movement. For almost the entire day the pair bounced between support and resistance, without clear direction.
Technical Outlook
The support at 1.2440 and the resistance at 1.2500 proved to be strong barriers which rejected price yesterday. However, today we expect price to move outside the range created by the two levels and to continue in the direction of the initial break. We favor the short side given the fact that yesterday the Relative Strength Index reached its 70 level twice and another bullish move would probably create bearish divergence. First support will be located at 1.2360 if 1.2440 is broken while resistance sits at 1.2620 if 1.2500 is broken.
Fundamental Outlook
The day lacks major news releases but noteworthy is the German Final Consumer Price Index which is scheduled for release at 7:00 am GMT. The expected change is -0.3%, same as last month but the Final version doesn’t hold as much importance as the Preliminary; higher values would strengthen the Euro nonetheless.
GBP/USD
The Pound weakened substantially yesterday as the Claimant Count Change posted a value of -20.4K, worse than analysts expected. This took price back below 1.5900 and generated a day controlled by the bears.
Technical Outlook
The momentum belongs to the bears once again but the important support at 1.5790 sits in front of descending prices. If this barrier can be surpassed, the next level of importance is represented by 1.5750 but we must note the position of the Relative Strength Index which touched the 30 level twice yesterday on an hourly chart. This doesn’t mean necessarily that price will bounce higher at support but it is a bullish factor which must be taken into account.
Fundamental Outlook
There are no major news releases scheduled for today thus price direction will be mainly influenced by the technical aspect.
