EUR/USD
Forex News: Yesterday the pair remained confined inside the horizontal channel created by support and resistance and although price action was mostly bullish, the anticipated breakout didn’t occur.
Technical Outlook
A breakout is still anticipated as yesterday price failed to move out of the horizontal channel and now the pair has been moving mostly sideways for an extended period of time. Support is located at 1.2440 and resistance at 1.2500 and a break of either one will most likely generate a strong move in that direction. The fundamental scene is busy today and this adds to our belief that price will break the channel.
Fundamental Outlook
The German Preliminary Gross Domestic Product is scheduled for release at 7:00 am GMT and is expected to grow from last month’s -0.2% to 0.1%. This would be beneficial for the Euro as the GDP is an economy’s main gauge of overall health.
At 1:30 pm GMT the US Retail Sales are released, with an anticipated change of 0.2% compared with last month’s -0.3%. Because sales made at a retail level represent an important part of the entire economic activity, a higher value would suggest increased activity and thus a stronger greenback. The final important indicator of the week is the Consumer Sentiment survey released by the University of Michigan. The scheduled time is 2:55 pm GMT and the forecast is 87.3, a small increase from last month’s 86.9.
GBP/USD
The pair traveled south for almost the entire duration of yesterday’s trading session and support was clearly broken. The downtrend has a new low and the US Dollar is easily overpowering the Pound.
Technical Outlook
The important support at 1.5750 was broken yesterday but the Relative Strength Index is now showing a clear oversold condition, traveling below its 30 level on an hourly chart. The latest move seems a bit overextended and this creates the possibility of a bullish move which will re-test the broken level at 1.5750 before the downtrend can resume.
Fundamental Outlook
Although the United Kingdom doesn’t release any major news today, the American events will have a direct and important impact on the pair’s movement. Positive US data will most likely take the pair lower.
FOREX NEWS: ALL EYES ON DRAGHI’S TESTIMONY ON MONETARY POLICY
EUR/USD
Forex News: A better than expected US Retail Sales reading initially took price lower Friday, creating US Dollar strength, but soon after the pair rebounded higher, breaking resistance.
Technical Outlook
The pair moved outside the horizontal channel by breaking the resistance located at 1.2500 and we expect the upside to prevail today but a test of the recently broken level is very probable. The Relative Strength Index is curving downwards in close vicinity of its 70 level, adding to our belief that price will touch 1.2500 before moving north. If price will not bounce higher and the level will not turn into support, we are likely to see a move towards 1.2400.
Fundamental Outlook
At 2:00 pm GMT, ECB President Mario Draghi will testify before the Committee on Economic and Monetary Affairs. The topic will be monetary policy and this makes the speech a very important one because traders around the globe will try to decipher his words in order to find clues about the next interest rate decision. Volatility is expected and caution is recommended.
GBP/USD
Friday’s trading session was characterized by mixed behavior as price dropped when the US Retail Sales came out but soon the Pound erased most of the losses and the pair moved north, finishing the week on a bullish note.
Technical Outlook
The Relative Strength Index on a four hour chart has started to move upwards and is trying to come out of oversold territory so for today’s trading session we expect price to rise, having 1.5750 as target. However, this resistance level could be a too distant target as Mondays are usually slow days if no major economic indicators are released. To the downside, potential support sits at 1.5590 and we don’t expect it to be broken.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases for today but the pair will be influenced by the US Industrial Production numbers which come out at 2:15 pm GMT. The indicator tracks changes in the value of output produced by the Industrial sector and higher values than today’s anticipated 0.2% will most likely strengthen the greenback, taking the pair lower.
FOREX NEWS: BRITISH INFLATION IN THE FOCUS – POUND HIGHLY INFLUENCED BY THE CPI READING
EUR/USD
Forex News: Yesterday the sellers managed to reverse the initial bullish breakout and to bring the pair back inside the horizontal channel. ECB President Mario Draghi mentioned that added stimulus is needed to bring the economy back on the right track and this created further Euro weakness.
Technical Outlook
Although the channel created by 1.2500 resistance and 1.2400 support was broken, price returned inside, signaling that the pair might be headed towards 1.2400. The bias is slightly bearish but as long as price cannot exit the channel and remain outside, the ranging period is not over and we might see further choppy price action.
Fundamental Outlook
At 10:00 am GMT the German ZEW Economic Sentiment survey is released and expected to show a value of 0.9, an increase from last month’s -3.6. The survey tracks optimism among German professional analysts and investors and usually a higher than anticipated number strengthens the Euro.
The American Producer Price Index will be released at 1:30 pm GMT and expected to change -0.1%, same as last month. The indicator has inflationary implications because a higher price charged by producers will be eventually passed on to the retail consumer so higher values usually strengthen the US Dollar.
GBP/USD
The pair dropped yesterday after a bullish move which brought price in close vicinity of 1.5750 resistance. Almost the entire day was controlled by the bears but support was not threatened.
Technical Outlook
The outlook is once again bearish as the pair is still trading below the 50 period Exponential Moving Average after a failed attempt to move above it. The first support and potential target for the day is located at 1.5590, while resistance still sits at 1.5750 but the day’s bias will be determined by the British inflation numbers released in the morning.
Fundamental Outlook
The British Consumer Price Index is scheduled for release at 9:30 am GMT and the expected change is 1.2%, same as last month. Bank of England Governor Mark Carney recently expressed his concerns about downside risks for inflation and this could mean that a lower value of the CPI might be perceived more bearish than usual, generating Pound weakness.
FOREX NEWS: MIXED PRICE ACTION AHEAD OF THE FOMC MEETING MINUTES
EUR/USD
Forex News: Yesterday the ZEW Economic Sentiment survey showed increased levels of optimism among German analysts and professional investors, a fact that strengthened the Euro and took the pair back above short term resistance.
Technical Outlook
The period of indecision is still not over as shown by the pair’s movement lately: resistance has been broken but the bulls failed to push price higher and on the other hand, the bears couldn’t make any significant advances when price moved below 1.2500 again. Currently price is testing the level at 1.2500 which may turn into support but if it’s broken to the downside, support will be offered by the bullish trend line seen on the chart above. If price travels higher the first resistance is represented by the double top located at 1.2577.
Fundamental Outlook
The American Building Permits numbers are announced at 1:30 pm GMT and expected to increase to 1.04M from last month’s 1.02M (annualized number), a fact which would generate US Dollar strength. However, a more important event is the release of the FOMC Meeting Minutes scheduled at 7:00 pm GMT. The Minutes contain insights into the reasons which stood behind the latest interest rate decision and usually can offer hints about the bias of future monetary policy. We expect strong moves for the greenback at the time of the release and caution is recommended.
GBP/USD
The British Consumer Price Index surprised yesterday by showing an increase of 1.3% compared with analysts’ expectation of 1.2%. However, the market didn’t respond as anticipated and the Pound didn’t move strongly at the time of the release.
Technical Outlook
The 50 period Exponential Moving Average offered good resistance yesterday and pushed price lower but the picture remains mixed, with a slightly bearish bias, considering the strong downtrend. The first support is located at 1.5590 but if price can break through the Moving Average, we will probably see a climb close to 1.5750.
Fundamental Outlook
The Bank of England will make public today at 9:30 am GMT the breakdown of the latest interest rate votes. This is a good opportunity to see if more MPC members voted for a rate change or if some of them are starting to change their stance. Usually volatility is created only if some MPC members changed their view, but caution is recommended nonetheless.
FOREX NEWS: AMERICAN INFLATION NUMBERS AND BRITISH RETAIL SALES – THE DAY’S MARKET-MOVERS
EUR/USD
Forex News: The Euro bulls managed to keep the pair above 1.2500 yesterday before the FOMC Meeting Minutes and once the document was released, the US Dollar showed choppy behavior as concern about US inflation surfaced.
Technical Outlook
The pair pierced the resistance created by the double top formation at 1.2577 but rejection was seen and overall we had mixed price action at the time of the FOMC Minutes release. However, yesterday was mainly bullish and if price will move above 1.2577 we are likely to see a move towards 1.2620. To the downside, support is located at 1.2500 but to get there, the bears will first have to take price below the 50 period Exponential Moving Average and the bullish trend line.
Fundamental Outlook
The German Manufacturing PMI is released early at 8:30 am GMT and expected to change from last month’s 51.4 to 51.5. Since this is a leading indicator of economic health which shows optimism among purchasing managers from the Manufacturing sector, a higher than anticipated number will most likely take the pair higher.
Later in the day, at 1:30 pm GMT the American Consumer Price Index is released and expected to change -0.1% while last month’s change was 0.1%. The CPI is one of the main inflation gauges for the United States economy and any percentage above the forecast can lead to a stronger US Dollar.
GBP/USD
Bank of England’s Meeting Minutes showed that some of the members see inflationary risks in the near future and the Pound strengthened as a result but later in the day some of the gains were erased when the FOMC Minutes came out.
Technical Outlook
Yesterday the pair created a double bottom at 1.5590 and immediately after, price bounced higher, helped also by fundamental reasons. The 50 period Exponential Moving Average was successfully pierced to the upside and we expect this bullish behavior to continue today. However, the fundamental aspect for both the Pound and the US Dollar will have a strong impact and the technical aspect will be somewhat secondary.
Fundamental Outlook
The British Retail Sales are released at 9:30 am GMT and the event is usually a strong market mover as sales made at retail level represent a hefty part of the entire economy. A bigger change than the expected 0.4% (previous -0.3%) would benefit the Pound, taking the pair higher. Of course, the US inflation numbers will have a direct impact on the pair as well.
FOREX NEWS: FINAL DAY OF THE TRADING WEEK RULED BY TECHNICAL FACTORS
EUR/USD
Forex News: The German Manufacturing PMI disappointed yesterday and American inflation numbers came out slightly better than anticipated but the impact was not very strong and the pair showed very choppy price action throughout the day.
Technical Outlook
The pair touched 1.2577 again but failed to move above it and then the bullish trend line was tested but it offered good enough support. The picture is mixed and neither side is in control, a situation which will most likely continue until 1.2577 resistance or diagonal support is broken. Horizontal support sits at 1.2500 and will be the pair’s first destination if the trend line is breached.
Fundamental Outlook
The day is rather calm in terms of economic news releases but ECB President Mario Draghi will speak at the 24th European Banking Congress, in Frankfurt and this can be a reason for volatility depending on the matters discussed. The event is scheduled at 8:00 am GMT and caution is recommended although the speech is not expected to be a major market mover.
GBP/USD
British Retail Sales showed a change of 0.8%, much better than the anticipated 0.4% and the Pound strengthened as a result, generating a trading day with bullish price action.
Technical Outlook
The resistance at 1.5750 wasn’t threatened yesterday and the Relative Strength Index is close to the 70 level which shows a potentially overbought condition. If price will touch 1.5750 with the RSI being overbought, we favor a bounce lower, with the 50 period Exponential Moving Average being the first support. A break of this support would open the door for a move towards 1.5590.
Fundamental Outlook
The day ahead lacks major news releases for the Pound but the only noteworthy data is the Public Sector Net Borrowing scheduled at 9:00 am GMT and expected to decrease to 6.9B from the previous 11.1B. A lower figure than the anticipated one is considered beneficial for the Pound but the indicator usually has a medium impact.
FOREX NEWS: SCARCE ECONOMIC RELEASES TRANSLATE INTO A SLOW MONDAY
EUR/USD
Forex News: Last week’s strongest move occurred Friday on the back of Mario Draghi’s renewed commitment to add further stimulus in order to boost economic recovery and to raise inflation. This was perceived as bearish for the Euro and the pair moved strongly south.
Technical Outlook
The pair broke through the bullish trend line and the support at 1.2500 before stopping close to 1.2400 support. The momentum clearly belongs to the bears as the Euro is affected by inflation concerns and we expect the downside to prevail but before that can happen, some sort of retracement higher is likely to occur. The Relative Strength Index traveled below its 30 level, indicating oversold and increasing the chances of bullish pullbacks.
Fundamental Outlook
The release of the German IFO Business Climate survey is the only notable event of the day. This survey shows the optimism of about 7,000 German business owners regarding economic conditions and acts as a leading indicator of economic health. The scheduled time of the release is 9:00 am GMT and a higher number than the expected 103.0 usually has a beneficial impact on the Euro.
GBP/USD
Friday the US Dollar pushed the pair lower but the strength of the move was not convincing and a lot of the losses were erased later during the day. Overall we saw choppy price action, without substantial advances.
Technical Outlook
The pair has been moving mostly sideways lately, with single impulses which failed to be continued and were quickly reversed. The bias is slightly bearish but it is clear that momentum is not strong; however, price is trading below the 50 period Exponential Moving Average and the support at 1.5590 is likely to act as a magnet. Resistance is located at 1.5750 but we don’t expect it to be touched today.
Fundamental Outlook
There are no economic releases scheduled today for the Pound and the same is true for the US Dollar so we expect a slow day, with choppy price action.
FOREX NEWS: A BUSY DAY AHEAD: AMERICAN GDP AND BRITISH INFLATION HEARINGS IN THE FOCUS
EUR/USD
Forex News: The Euro climbed against the American Dollar yesterday as price direction was affected by a better than expected value of the German IFO Business Climate survey. Technical factors like the oversold condition of the pair also played an important role for the pair’s movement.
Technical Outlook
Although yesterday the pair climbed, the bears still have enough underlying strength to bring price down for another test of the support level at 1.2360. If the pair continues upwards, it will encounter resistance at the 50 period Exponential Moving Average but a bullish break will open the door for a touch of 1.2500 resistance. The fundamental aspect will have an important influence on today’s price action.
Fundamental Outlook
The first noteworthy event of the day is the release of the American Preliminary Gross Domestic Product scheduled at 1:30 pm GMT. A higher value than the expected 3.3% would generate US Dollar strength although this version of the GDP is less important than the Advance version.
The US Consumer Confidence is released at 3:00 pm GMT and expected to increase from the previous value of 94.5 to 95.9. A consumer that is confident in the economic situation of the country is likely to spend more and this helps the economy, thus a higher than anticipated value will add fuel to the US Dollar, driving the pair lower.
GBP/USD
The Pound also climbed yesterday although no major indicators were released. Overall we had a pretty slow day, with price action mainly influenced by the technical aspect.
Technical Outlook
The pair is moving mostly sideways lately and neither bulls nor bears are in clear control; price is sitting above the 50 period Exponential Moving Average but a clear slope of the line is not present, indicating the pair is in a ranging period. Until either 1.5750 resistance or 1.5590 support is broken, the ranging period is not over and direction changes can occur, especially if the Relative Strength Index will reach an extreme condition.
Fundamental Outlook
BOE Governor Mark Carney and other MPC members will testify on inflation today at 10:00 am GMT before the Parliament’s Treasury Committee. The hearings last for a few hours and during this time volatility and sharp moves may be experienced. Before the hearings start, at 9:30 am GMT the British Bankers’ Association will release the Mortgage Approval numbers; the forecast is 38.5K and a higher value is likely to strengthen the Pound but usually this indicator tends to have a mild impact on the market.
FOREX NEWS: THE DOWNTREND WAVERS. RESISTANCE THREATENED
EUR/USD
Forex News: The American Gross Domestic Product posted a better than expected reading but the pair failed to break 1.2400 and rebounded higher after a brief moment of bearishness.
Technical Outlook
Yesterday’s rise took price in close vicinity of the 50 period Exponential Moving Average on a four hour chart but resistance has not been broken so the picture is not strongly bullish for the moment. On the other hand, support pushed price higher and this makes 1.2500 the first target. However, if 1.2500 is touched and the Relative Strength Index is overbought at the time, we anticipate a bounce lower.
Fundamental Outlook
The US Durable Goods Orders are scheduled for release at 1:30 pm GMT and expected to change -0.4% while last month’s value was -1.1%. The indicator tracks changes in the value of goods with a life expectancy of at least three years and higher values usually strengthen the greenback.
The US New Home Sales numbers come out at 3:00 pm GMT with an anticipated value of 471K, slightly better than last month’s 467K. Same as for the other indicator, a higher value suggests economic expansion and usually strengthens the US Dollar.
GBP/USD
The Pound had a good day against the US Dollar despite the value of the American GDP which was better than anticipated. The Inflation Report hearings created mixed market reaction which did not result in strong movement.
Technical Outlook
The 50 period Exponential Moving Average was clearly broken yesterday and now will probably act as support. The immediate target is located at 1.5750 but the Relative Strength Index is approaching overbought territory and we expect a bounce lower if the level mentioned will be touched. If 1.5750 will be broken we expect further upside movement after a test from above.
Fundamental Outlook
Great Britain’s Second Estimate GDP is released at 9:30 GMT and being the main gauge of economic performance, better values than the expected 0.7% will most likely generate Pound strength. As always, the US events will have a direct impact on the pair’s movement.
FOREX NEWS: THANKSGIVING DAY GENERATES IRREGULAR PRICE ACTION
EUR/USD
Forex News: The data released yesterday by the United States was disappointing and generated US Dollar weakness, thus the pair had a bullish day and price broke through short term resistance.
Technical Outlook
Today the United States celebrate Thanksgiving Day and this will most likely trigger irregular movement and periods of alternating volume, especially during the American session. From a strictly technical point of view, we anticipate a re-test from above of the recently broken level at 1.2500; adding to this is the position of the Relative Strength Index on an hourly chart, but if the bulls can maintain price above the mentioned level, we expect further upside movement.
Fundamental Outlook
Since today is Thanksgiving Day, The United States will not release any economic data. However, an important indicator will affect price action: the German Preliminary Consumer Price Index which is the main gauge of inflation for the German economy. The event is scheduled at 1:00 pm GMT and the CPI is expected to increase to 0.0% from the previous -0.3%, a fact which would be beneficial for the Euro.
GBP/USD
The British Gross Domestic Product met analysts forecast but worse than expected US economic data generated greenback weakness and allowed the pair to climb above resistance.
Technical Outlook
The pair is trading above 1.5750 which was previously resistance but the Relative Strength Index on an hourly chart is showing clear overbought signs. This makes us believe that price will have another encounter with 1.5750; a bounce higher would suggest that 1.5750 is now support and that we will see further bullish price action.
Fundamental Outlook
The United Kingdom didn’t schedule important economic indicators for today thus price direction will be mainly affected by the technical aspect but keep in mind that irregular movement can occur due to Thanksgiving Day.
FOREX NEWS: EUROPEAN INFLATION IN THE FOCUS. US DOLLAR STILL AFFECTED BY HOLIDAYS
EUR/USD
Forex News: Although the German CPI met analysts’ expectations and came out better than last month, the pair dropped yesterday below short term support; however the bears couldn’t continue the initial impulse and volatility toned down.
Technical Outlook
The pair is trading below 1.2500 but the picture is mixed and we don’t expect a lot of action today considering that Thanksgiving will still affect the US Dollar. The bullish trend line seen on the chart above will be the first barrier in front of falling prices and the level at 1.2500 can hinder further bullish movement. A break of either one could trigger an extended move but low volume will be present probably and this can generate sharp turns.
Fundamental Outlook
The most important event of the day is the release of the European Consumer Price Index, scheduled at 10:00 am GMT and expected to decrease 0.3% compared with last month’s 0.4%. Lately inflation has been a major concern for the ECB and lower values than anticipated can have a negative impact on the Euro.
GBP/USD
Yesterday the pair returned to test the recently broken level at 1.5750 but resistance didn’t turn into support and the bears managed to take price lower. Overall we had a day controlled almost entirely by the sellers.
Technical Outlook
Before the drop below 1.5750 the Relative Strength Index was showing an overbought condition which had an important role in yesterday’s drop, especially because neither the Pound nor the US Dollar was affected by economic news. Now price is trading below the 50 period Exponential Moving Average and below 1.5750 so the picture is bearish but keep in mind that price is approaching oversold territory.
Fundamental Outlook
The Pound won’t be affected by any major economic news releases and the same is true for the US Dollar. We expect a day with irregular movement and volatility due to American holidays.
FOREX NEWS: BEARS TAKE BACK CONTROL – SUPPORT THREATENED
EUR/USD
Forex News: Although Spain showed yesterday that unemployment levels are starting to drop and the economy is picking up, the pair moved lower for almost the entire day as a positive sentiment surrounded the US economy and the greenback.
Technical Outlook
The pair moved below the 50 period Exponential Moving Average and continued lower, until 1.2400 support was touched. The hourly Relative Strength Index traveled below 30, indicating an oversold condition and this makes us believe that a retracement higher will occur before 1.2400 can be clearly broken. This potential retracement can find resistance at the Moving Average and we expect the bearish movement to resume there, making another attempt to break 1.2400 and opening the door for the next support, located at 1.2360.
Fundamental Outlook
European Retail Sales numbers are released 10:00 am GMT and expected to change 0.6% from the previous -1.3%. Better values than forecast are beneficial for the Euro but the indicator tends to have a mild impact because the most important European countries usually release their retail sales numbers earlier.
Automatic Data Processing (ADP), a privately owned company will release today a version of the Non Farm Employment Report which is not as important as the Government data released Friday but it can still create a lot of volatility. The scheduled time is 1:15 pm GMT, the anticipated number is 223K while the previous was 230K and a higher number is usually beneficial for the US Dollar.
GBP/USD
The British Construction Purchasing Managers’ Index posted a disappointing reading yesterday and this allowed the pair to drop for the entire duration of yesterday’s trading session.
Technical Outlook
The resistance at 1.5750 remains an important level for short term price action and has enough strength to reject strong bullish impulses, as seen from yesterday’s movement. We expect the current move to extend into the support located at 1.5590 but we don’t exclude the possibility of bullish retracements considering the position of the Relative Strength Index which is approaching oversold.
Fundamental Outlook
The British Services Purchasing Managers’ Index is the last one in this week’s series of surveys focused on optimism regarding economic and business conditions; it will be released today at 9:30 am GMT, with an expected figure of 56.6, slightly better than last month’s 56.2. As always, keep an eye on the US events as those will have a direct impact on the pair’s movement.
FOREX NEWS: MIXED PRICE ACTION AHEAD OF INTEREST RATE DECISIONS
EUR/USD
The Euro continued to weaken yesterday on speculation that Europe’s economy will need further stimulus from the ECB. Support was broken and the bears maintained control for the entire day.
Technical Outlook
On an hourly chart the Relative Strength Index is showing an extreme condition, traveling well below the 30 level and it has even become oversold on a four hour chart. The support at 1.2360 was clearly broken and the pair is headed towards 1.2280, but before that level can be reached, we expect some sort of bullish retracement which will clear the oversold condition of the Relative Strength Index.
Fundamental Outlook
Today’s price action will be heavily influenced by the ECB Interest Rate decision, scheduled at 12:45 pm GMT and by the Press Conference that follows 45 minutes later. The rate is not expected to change from the current 0.05% and usually if there’s no rate change, the Press Conference is the day’s main market mover. Mario Draghi’s attitude and answers to journalists’ questions will most likely generate a lot of volatility and if he talks about increasing stimulus, we expect very strong movement.
GBP/USD
British Services Purchasing Managers’ Index posted a reading which surpassed analysts’ expectations and this allowed the Pound to strengthen against the US Dollar. A worse than expected number for the ADP Non Farm Employment Change also added to the climb.
Technical Outlook
The pair is having trouble choosing a clear direction as all moves are quickly reversed. Now price is sitting once again above the 50 period Exponential Moving Average and the latest impulse is bullish, a fact that makes us believe that 1.5750 resistance will be touched once again. Keep an eye on the Relative Strength Index which is approaching overbought territory so a reversal is not out of the question.
Fundamental Outlook
At 12:00 pm GMT the Bank of England will announce the Interest rate but no change is expected from the current 0.50%. If this forecast comes true, the Pound will probably show limited volatility but caution is recommended nonetheless.
FOREX NEWS: BEARISH ADVANCEMENTS CONFIRMED BY A BREAK OF SUPPORT
EUR/USD
Friday the US Dollar strengthened as a result of a much better than anticipated value of the Non Farm Employment Change. Analysts’ forecast was 231K new jobs but the actual number was 321K and this took the pair back into support.
Technical Outlook
The bearish momentum generated by the Non Farm Payrolls is likely to continue today and we expect a move below 1.2280. However, last week price bounced strongly once the current level was touched, so we might see several attempts until the level is clearly broken. Even if the break occurs, we expect price to return to the level of a retest, especially if the Relative Strength Index shows an oversold condition during the day.
Fundamental Outlook
The Eurogroup Meetings take place today, attended by important figures from the European financial and political scene. The meetings are closed to the press but sometimes officials talk to journalists during the day and a statement is released once the meetings conclude. Volatility may be present throughout the day but unless surprise developments take place, we don’t expect strong moves.
GBP/USD
American employment affected the pair strongly and took price almost 130 pips lower on the back of greenback strength. This may mark the end of the ranging price action seen during the last period.
Technical Outlook
The support at 1.5590 was broken Friday but considering the importance of this level for short term price action, we expect a retest from below which will show if the bears can take the pair lower and if the break was a real one. The Relative Strength Index is bouncing close to the oversold level and this may generate some bullish movement and probably the retest mentioned before.
Fundamental Outlook
The United Kingdom didn’t schedule any financial indicator releases for today, so we expect a slow day, with price action driven by the technical aspect.
FOREX NEWS: SHORT TERM PRICE ACTION FAVORS THE BULLS. MAIN TREND STILL DOWN
EUR/USD
Forex News: The Euro had a very good day against the US Dollar, strengthening for more than 150 pips and breaking several resistance levels. For the most part of yesterday’s trading session the pair moved straight north and the bulls were in complete control.
Technical Outlook
Two levels of interest were broken during yesterday’s rally: 1.2360 and 1.2400. Now price is sitting above the 50 period Exponential Moving Average and the momentum clearly belongs to the bulls. This makes us believe that the current impulse will extend towards 1.2500 but the Relative Strength Index is showing an overbought condition and the short term resistance at 1.2455 sits in front of rising prices. We expect some moves lower which will clear the overbought condition, followed by another climb but keep in mind that the main trend is bearish, thus stronger moves south are not out of the question.
Fundamental Outlook
The day ahead lacks major economic and financial news releases for both the Euro and the US Dollar, making the technical aspect the more important one.
GBP/USD
Yesterday’s price action was choppy and a clear direction wasn’t established until later in the day when the bulls managed to take price higher, above the 50 period Exponential Moving Average.
Technical Outlook
Although early in the week the pair moved below the support at 1.5590, the bears couldn’t maintain price below it and the break soon proved to be fake. The 50 period Exponential Moving Average was broken to the upside and this will most likely take the pair into the resistance at 1.5750. Even if this level will be broken to the upside, we don’t expect it to happen in the first attempt, considering that the Relative Strength Index might become overbought when price touches resistance.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for today so price direction will be mainly influenced by technical factors.
FOREX NEWS: ECB’S LONG TERM REFINANCING OPTION, A MAJOR MARKET MOVER
EUR/USD
Forex News: Yesterday the pair moved above 1.2400 resistance, reversing a previous retracement below this level. The day belonged to the bulls but the action was rather slow, compared with the previous move, probably because economic releases were scarce.
Technical Outlook
Price found support in close vicinity of the 50 period Exponential Moving Average and of 1.2360 support but 1.2455 short term resistance wasn’t touched although the bulls controlled the day’s price action. We expect a move above 1.2455 resistance but if this doesn’t happen today, we are likely to see a return below 1.2360 support. Keep an eye on the Relative Strength Index which is approaching overbought and could trigger reversals.
Fundamental Outlook
At 10:15 am GMT the ECB will announce the value of their Targeted LTRO (Long Term Refinancing Option). This is the total amount of money the ECB will create and loan to European commercial banks in order to boost liquidity. The current value is 82.6B and the forecast is 148.2B but the impact might be difficult to anticipate as market participants can interpret differently the actual value.
The US Retail Sales are announced at 1:30 pm GMT and expected to change 0.4% while last month’s change was 0.3%. Higher values will most likely benefit the greenback because sales made at a retail level represent a hefty part of consumer spending which in turn is a major part of the entire economic activity.
GBP/USD
The pair showed choppy price action for the entire duration of yesterday’s trading session and remained in a tight range. Neither bulls nor bears were in clear control but minor advances north were made.
Technical Outlook
The pair is still trading above the 50 period Exponential Moving Average but important resistance sits in front of rising prices: 1.5750. If this level cannot be breached today, we expect price to start moving towards the support at 1.5590. If this is the case, the Moving Average will be the first area of dynamic support.
Fundamental Outlook
The pair’s direction will be influenced today by the US Retail Sales as the United Kingdom didn’t schedule any major news releases. Keep an eye on the CORE version of this indicator, which excludes automobiles from calculation.
FOREX NEWS: UNITED STATES ECONOMIC INDICATORS – THE DECIDING FACTOR FOR FRIDAY’S PRICE ACTION
EUR/USD
Forex News: The US Dollar strengthened yesterday against the Euro as the American Retail Sales came out with a better than expected value, showing that economic activity in this sector is picking up. ECB’s Targeted LTRO came out with the value of 129.8B, less than the expected 148.2 but the event didn’t create strong moves.
Technical Outlook
After breaking 1.2455 to the upside, the pair became overbought as shown by the Relative Strength Index and this, coupled with the dollar strength generated by the US Retail Sales release, pushed the pair below 1.2400. Currently the pair is retesting the recently broken level from below and we believe this retest will result in another push lower. The first target is the support at 1.2360, followed by 1.2280.
Fundamental Outlook
All major indicators of the day come from the US with the first release being scheduled at 1:30 pm GMT in the form of the Producer Price Index. The indicator tracks changes in prices charged by producers and has inflationary implications because a higher price will be eventually passed on to the consumer. The forecast is -0.1% while the previous was 0.2% and higher values usually strengthen the greenback.
The University of Michigan will release their Consumer Sentiment survey at 2:55 pm GMT. Increased confidence among consumer is usually a leading signal of increased consumer spending and that’s the reason why a higher value than the expected 89.6 is perceived as beneficial for the US Dollar.
GBP/USD
The pair touched 1.5750 resistance yesterday but the bulls failed to take price above and this resulted in an almost picture-perfect bounce lower. The fact that US Retail Sales exceeded analysts’ expectations also played a big role in yesterday’s price action.
Technical Outlook
Although price bounced lower once 1.5750 resistance was touched, the pair couldn’t move below the 50 period Exponential Moving Average and instead it showed rejection once the line was tested. For the time being, the pair’s direction is still not decided and our bias is neutral until either 1.5750 resistance or the 50 period EMA is broken. Next resistance is located at 1.5825 while next support sits at 1.5590.
Fundamental Outlook
The Pound had a slow week in terms of economic releases and today is no exception, so the pair’s direction will be influenced by the technical aspect and by the US releases.
FOREX NEWS: SLOW MONDAY AHEAD, WITH US DOLLAR UNDER PRESSURE
EUR/USD
Forex News: Friday the Euro gained against the US Dollar as the US Producer Price Index disappointed analysts’ expectations, weakening the greenback. Later in the day, a better than expected value of a Consumer Confidence survey brought the pair slightly lower and triggered mild US Dollar strength.
Technical Outlook
The pair is likely to continue on its current course until 1.2500 resistance is touched but if this happens, the Relative Strength Index will probably become overbought and this might trigger bearish movement. The 50 period Exponential Moving Average will offer support if touched but we don’t expect strong moves today as the economic scene lacks major releases and Mondays are usually slow days.
Fundamental Outlook
At 2:15 pm GMT the US Industrial Production is released but this is considered an event with medium impact on the US Dollar unless surprising numbers are posted. The forecast is 0.8% while the previous was -0.1% and higher than expected values are usually beneficial for the greenback.
GBP/USD
The pair moved mostly sideways for the entire Friday trading session, no substantial advances were made by either bulls or bears and price remained confined between support and resistance.
Technical Outlook
The resistance at 1.5750 was barely touched Friday but the lack of strong momentum brought price back down, without volatility. We expect this slow, ranging movement to continue today and price to remain between 1.5750 and the four hour 50 period Exponential Moving Average. A break of either one would open the door for a move towards 1.5825 resistance or 1.5590 support but we don’t expect these levels to be touched today.
Fundamental Outlook
The day ahead lacks important releases for the Pound and the US event mentioned earlier is the only economic indicator that could generate strong movement.
FOREX NEWS: HEADS-UP FOR THE BOE BANK STRESS TESTS RESULTS AND EUROPEAN PMIS
EUR/USD
Forex News: The pair had a rather slow day yesterday, with the US Dollar gaining against the Euro; however the move wasn’t substantial and support was not threatened.
Technical Outlook
Price moved below the 50 period Exponential Moving Average but the bears weren’t able to continue the move and no significant advances were made. This type of movement is likely to continue today unless surprising numbers are showed by the European economic indicators. Resistance still sits at 1.2500 and support at 1.2360 and we believe resistance might be touched before the bears will make a run for support.
Fundamental Outlook
The French Manufacturing PMI is released at 8:00 am GMT with an anticipated value of 48.7. Since this is a leading indicator of economic health, focused on the manufacturing sector, higher numbers will have a positive impact on the Euro. Half an hour later, at 8:30 am GMT the German indicator with the same name will be released. The forecast is 50.4 and the release usually has a higher impact than the French Manufacturing PMI.
At 10:00 am GMT the German ZEW Economic Sentiment survey comes out with an anticipated increase to 19.8 from the previous 11.5. The survey is derived from the opinions of about 275 German investors and analysts and tries to gauge their optimism regarding economic outlook, thus better numbers usually strengthen the Euro.
GBP/USD
The Pound weakened severely versus the US Dollar yesterday and the pair dropped after another close encounter with 1.5750 resistance.
Technical Outlook
The momentum clearly belongs to the bears as shown by yesterday’s price action and strictly from a technical point of view, we expect the downside to prevail today. First support is located at 1.5590, a level which proved very strong in the past and might reject price higher again if it will be touched, but a break will most likely draw in more sellers; however, the technical aspect will be overshadowed by the fundamental today.
Fundamental Outlook
The Bank of England will make public at 7:00 am GMT the Bank Stress Test results; major UK banks are tested through simulated market conditions to see how they would hold up during a crisis. The market might have a mixed reaction to this stress test so we recommend caution. The Financial Stability Report will be released by the BoE at the same time (7:00 am GMT) and Governor Mark Carney will hold a Press Conference about the report at 9:00 am GMT. At 9:30 the British Consumer Price Index is released and expected to change 1.2% compared with the previous 1.3%, a thing which would further weaken the Pound.
FOREX NEWS: HUGE DAY FOR THE US DOLLAR WITH THE FED MEETINGS IN THE SPOTLIGHT
EUR/USD
Forex News: Yesterday both the German Manufacturing PMI and German ZEW Economic Sentiment surveys showed values which exceeded analysts’ expectations and the single currency strengthened as a result, breaking resistance.
Technical Outlook
On an hourly chart the pair has become overbought as signaled by the Relative Strength Index and this suggests that price might move below the level of 1.2500, for a touch of the 50 period Exponential Moving Average. If the current test of recently broken resistance turns into a bounce higher, the first target is located at 1.2575.
Fundamental Outlook
We have an important day for the greenback: the first event is the release of the Consumer Price Index, scheduled at 1:30 pm GMT and expected to change -0.1% while last month we saw a change of 0.0%. Usually an increase in inflation is viewed as beneficial for the US Dollar and could take the pair lower.
In the evening we have a cluster of events which will most likely have a tremendous impact on the greenback: at 7:00 pm GMT the FOMC will announce the interest rate (no change expected from the current <0.25%), together with the FOMC Economic Projections for the next 2 years and a Rate Statement which will contain insights into the reasons which determined the rate decision. Half an hour later, at 7:30 pm GMT, Fed Chair Janet Yellen will hold a Press Conference which might be the biggest market mover of the day so extra caution is recommended.
GBP/USD
The British CPI dropped to 1.0%, a fact which only weakened the Pound briefly before the bulls took over, taking the pair above resistance.
Technical Outlook
The break of 1.5750 couldn’t be sustained and price soon moved below the level, showing rejection on a four hour chart. The pin bar created right on resistance suggests that price encountered a strong level which cannot be broken decisively at least for the moment, but we have a day filled with important news releases and we are likely to see strong moves which will decide the next medium term direction.
Fundamental Outlook
United Kingdom’s Claimant Count is released at 9:30 am GMT with an expected change of -19.8K while last month’s number was -20.4K. The indicator shows the change in the number of people who applied for unemployment related social help and a higher number suggests that the jobs market is contracting so the Pound will be negatively affected by a rise in jobless claims. At the same time, a breakdown of the MPC votes on the latest interest rate is released and this is a good opportunity for traders to see if the BOE is changing its stance on the interest rate. The US events will have a direct and strong impact on the pair’s movement.
