EUR/USD
Forex News: The Euro continued to weaken against the US Dollar during yesterday’s trading session and the pair touched 1.2280 support. Both the German and American economic indicators posted readings close to analysts’ expectations and this dampened their impact.
Technical Outlook
The pair moved easily below 1.2360 and continued south to touch 1.2280 although the Relative Strength Index was trading close to oversold territory for the most part of the day. At the moment price is showing rejection off of 1.2280 support and the Relative Strength Index is starting to move upwards so we anticipate a day with bullish movement which may find resistance at the 50 period Exponential Moving Average. A clear break of support may bring in additional sellers.
Fundamental Outlook
The day ahead lacks major news events for the Euro and the US Dollar, so price direction will be mainly driven by the technical aspect.
GBP/USD
British Retail Sales posted a surprising 1.6% increase while analysts’ expectations were just 0.3%. This created Pound strength and a bullish day.
Technical Outlook
After moving below the support at 1.5590 and coming very close to 1.5540 support, the pair started to move north, back above 1.5590. The Relative Strength Index touched the 30 level, becoming oversold and this played a major role from a technical point of view. Today we expect mixed price action, without significant advances; if the Relative Strength Index will become overbought during the day, the sellers might take the pair lower, with 1.5590 being the first target.
Fundamental Outlook
AT 9:30 am GMT, UK’s Public Sector Net Borrowing is announced. This is the amount of new debt held by the central and local governments and a higher number is viewed as detrimental for the Pound; the expected value is 14.8B while last month the debt was at 7.1B.
FOREX NEWS: A LACKLUSTER FUNDAMENTAL SCENE BRINGS CHOPPY PRICE ACTION
EUR/USD
Friday the bears continued to take price lower, breaking 1.2280 support on the back of a stronger US Dollar. Overall we saw unidirectional price action, without whipsaws or sudden reversals.
Technical Outlook
We are entering Christmas Week and Mondays are known to be slow days, especially if no major news is released. The Relative Strength Index has been moving for an extended period close to the 30 level which suggests oversold and the current bear run seems a bit overextended so we expect bullish retracements. However, keep in mind the pair is in a clear downtrend from a short and long term perspective so further downside action is not out of the question.
Fundamental Outlook
The US Existing Home Sales are announced at 3:00 pm GMT and this is the day’s only notable release. An increase in home sales suggests a thriving economy and usually strengthens the greenback but the indicator has a medium impact on price action. Today’s forecast is 5.21M and higher values will probably trigger limited dollar strength.
GBP/USD
The US Dollar gained against the Pound as well but the pair’s descent wasn’t as substantial as seen in the EUR/USD pair and support was not broken.
Technical Outlook
The pair is trading below the 50 period Exponential Moving Average on an hourly chart but 1.5590 support sits in front of falling prices. Today we anticipate another encounter with the mentioned level but if this happens, the Relative Strength Index might move below the 30 level, suggesting an oversold condition. Considering the pair is not in a strong trend from a short term perspective, we anticipate a bounce higher towards the 50 period EMA if 1.5590 is not clearly broken.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so price action will be driven by technical factors and by the US house market data.
FOREX NEWS: IRREGULAR PRICE ACTION WITH BOTH PAIRS UNDER PRESSURE
EUR/USD
Forex News: The pair moved north yesterday on the back of a disappointing value of the US Existing Home Sales but also because the short term downtrend was overextended and in need of a retracement.
Technical Outlook
Price is likely to continue on a bullish path until 1.2280 is touched but we don’t believe this resistance will be broken today and instead we expect a bounce lower. If the bounce occurs, the first support is represented by the level of 1.2220. The 50 period Exponential Moving Average will also provide dynamic resistance but keep in mind that winter holidays usually generate irregular movement and technical analysis is not reliable.
Fundamental Outlook
The US Durable Goods Orders are released today at 1:30 pm GMT with an expected change to 3.0% from last month’s 0.3%. Such an increase would suggest an expanding economy and would strengthen the US Dollar, taking the pair lower.
GBP/USD
Price reversed yesterday after an initial climb above the 50 period Exponential Moving Average and we saw choppy price after for the rest of the day but immediate support was not breached.
Technical Outlook
The pair is under pressure and there’s a distinct possibility of a drop below 1.5590 support but we don’t expect price to travel for an extended distance in one direction. Volatility will probably alternate during the day and we expect price action to be choppy and irregular but a clear break of 1.5590 could take price in close vicinity of 1.5540.
Fundamental Outlook
The British Current Account is announced today at 9:30 am GMT; this indicator shows the difference between imported and exported goods and a higher value than the expected -21.1B is considered beneficial for the Pound. At the same time the British Bankers’ Association announces the Mortgage Approvals; the indicator offers insights into the housing market and a higher number than the forecast 37.3K suggests that more houses will be bought in the near future with the help of a mortgage, a fact which normally strengthens the Pound.
FOREX NEWS: PRICE ACTION SLOWS DOWN FOR CHRISTMAS EVE
EUR/USD
Forex News: The pair dropped substantially yesterday as the US Dollar continued to strengthen and the Euro weakened on the back of speculation that Greece may be headed towards early elections.
Technical Outlook
Short term support at 1.2220 was broken after two small bounces and once this happened, more sellers joined the renewed downtrend. The latest momentum belongs to the bears and the pair is trading well below the 50 period Exponential Moving Average but the Relative Strength Index is showing an oversold condition and this makes us believe that price will retrace higher. Keep in mind that today is Christmas Eve and the market will tend to present irregular behavior.
Fundamental Outlook
The US Unemployment Claims are the single notable release of the day, scheduled at 1:30 pm GMT. The expected number is 291K and an increase in unemployment would suggest that the economy is slowing down and this usually weakens the US Dollar.
GBP/USD
United Kingdom’s Current Account disappointed yesterday, showing that the deficit increased and the Pound responded quickly by weakening against the greenback.
Technical Outlook
The pair remained under the level at 1.5590 which turned into resistance as showed by the touch from below which resulted in a bounce lower. The important support at 1.5540 was also broken and this might suggest the end of the ranging period, but the approaching of Christmas might nullify the effect of this break and it wouldn’t be out of the ordinary to see a return back above 1.5540. The Relative Strength Index is also oversold and this may add to the probability of bullish pullbacks.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases for the day and we expect irregular price action, with alternating volatility.
FOREX NEWS: CHRISTMAS BRINGS PRICE ACTION TO A HALT
EUR/USD
Forex News: As expected price action yesterday was slow and the economic releases didn’t have a lot of impact. The pair retraced higher and touched short term resistance but a break didn’t occur and instead price bounced lower.
Technical Outlook
Today price action will come to a stop due to the fact that a large part of the world is celebrating Christmas. When the market will open, the pair may present gaps and probably irregular volatility.
Fundamental Outlook
Many important banks around the world (including American and European banks) will be closed today, celebrating Christmas Day and no economic indicators will be released for either the Euro or the US Dollar.
GBP/USD
Similar to our other pair, the GBP/USD retraced higher, following an oversold condition of the Relative Strength Index. For the most part of the day price traded above and below 1.5540, without significant advances.
Technical Outlook
As mentioned before, the market is taking a breather today and trading will be suspended. Depending on the world’s time zones, price movement will resume sooner or later and once it does, we expect irregular movement.
Fundamental Outlook
United Kingdom’s Banks are closed due to the Christmas Holiday and no economic releases are scheduled.
We wish a Mary Christmas to those of you who celebrate this Holiday!
Technical Outlook
Even though the market is open today, we still expect price action to be irregular and choppy. The short term resistance at 1.2220 is holding and price bounced lower once it touched it so we expect some downside price action, with 1.2165 being the first minor support.
Fundamental Outlook
Many banks around the world are still closed and no economic indicators are released, a fact which contributes to the day’s low volume and irregular volatility.
GBP/USD
The pair stopped yesterday and no movement was seen as many people around the world celebrated the Christmas Holiday.
Technical Outlook
Wednesday price moved above the level at 1.5540 but we cannot consider this to be a true break as it could be generated by low volume and might not be a real attempt of the bulls to take control of the pair. The main levels to watch today are located at 1.5540 and 1.5590 but keep in mind that price action could be characterized by sharp turns and alternating volatility.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases and British banks are closed today, a fact which will add to the day’s irregular price action.
FOREX NEWS: IRREGULAR PRICE ACTION ON THE BACK OF A LACKLUSTER FUNDAMENTAL ENVIRONMENT
EUR/USD
Forex News: Friday the market resumed movement after being paused for Christmas and the pair moved lower, following a bounce on resistance. Overall we had a slow session, with price traveling in a single direction.
Technical Outlook
For the time being price is confined between 1.2165 support and 1.2220 resistance and a break of either one may trigger and extended move in that direction but considering the approaching of the New Year and the lack of economic releases, we may also see false breaks. It’s possible for price to move outside one of the levels but then to run out of steam and return inside, so extra caution is recommended if you are going to trade breakouts.
Fundamental Outlook
The day lacks important news releases and we expect choppy price action, with low volume and irregular volatility.
GBP/USD
The pair had a very slow day Friday, with price moving very close to the 50 period Exponential Moving Average which remained flat for the entire day.
Technical Outlook
Today we will probably see either a bounce higher off of 1.5540, or a bearish break and a consequent move towards the minor support at 1.5485. However, the first move is likely to be reversed, so wait for a re-test before trading if a break does occur. Keep in mind that price is flat and Friday’s movement doesn’t show a lot about future direction.
Fundamental Outlook
The United Kingdom didn’t schedule any economic releases for the day, contributing to the lackluster fundamental scene.
FOREX NEWS: US CONSUMER CONFIDENCE SURVEY HOLDS CENTER STAGE
EUR/USD
Forex News: Yesterday, after bouncing higher off of 1.2165 support, the pair headed higher and touched short term resistance but price remained confined inside the horizontal channel for the entire day.
Technical Outlook
Under normal market conditions we would expect a move outside the horizontal channel created by 1.2220 resistance and 1.2165 support but given the fact that volume is low and price action irregular, we consider that any breakouts will turn out to be false. In other words, after a move outside the channel, price is likely to return inside it, but keep in mind that technical analysis is less efficient during this period.
Fundamental Outlook
The only notable event of the day is the release of the American Consumer Confidence survey scheduled at 3:00 pm GMT. The expected figure is 94.6, an increase from last month’s 88.7 and usually such a climb would strengthen the US Dollar because increased consumer confidence often means that consumer spending will increase in the near future.
GBP/USD
The Pound came close to 1.5590 resistance yesterday before starting to drop. Currently the pair is trading below 1.5540 and the bears have won the short term battle.
Technical Outlook
Although price moved below the short term support at 1.5540, we might easily see a return above it, or at least a re-test if price is indeed headed south. If the re-test results in a bounce lower, the first support is located at 1.5485 but keep an eye out for any oversold condition signaled by the Relative Strength Index as this could generate a move higher. The 50 period Exponential Moving Average will offer dynamic resistance if touched from below.
Fundamental Outlook
There are no important economic or financial indicators released by the United Kingdom, so price action will be decided by the technical aspect and by the US Consumer Confidence survey.
EUR/USD
Forex News: Yesterday’s price action was rather slow, a fact determined by the approaching of the New Year’s Eve and by US consumer confidence data which posted a reading close to analysts’ expectations.
Technical Outlook
Today is the last day of the year and trading will be heavily influenced by this fact. We expect sudden drops and surges in volatility, with potentially sharp whipsaws on the back of low volume. The levels to watch are 1.2220 as resistance and 1.2125 as potential support. Price behavior around the current level of 1.2165 will most likely determine the next short term direction.
Fundamental Outlook
German Banks will be closed today, celebrating the New Year’s Eve and the US Dollar will be somewhat affected by the release of the Unemployment Claims scheduled at 1.30 pm GMT and expected to rise to 287K from the previous 280K. A higher value is detrimental for the US Dollar under normal conditions.
GBP/USD
Yesterday’s price action was mainly controlled by the bulls and the pair managed to climb back above 1.5540. Overall it was a normal trading session, without major developments.
Technical Outlook
Price is trading above 1.5540 and above the 50 period Exponential Moving Average, meaning that the short term bias is bullish. However, we believe that an overbought condition of the Relative Strength Index will probably generate another bearish move, with 1.5540 being the first target.
Fundamental Outlook
The British fundamental scene lacks major releases and we expect irregular price movement, mostly due to the New Year’s Eve.
We hope your year was profitable and we look forward to trading together during 2015. Have a Happy New Year!
EUR/USD
Forex News: Yesterday the fundamental scene was rather calm and the US Unemployment Claims release didn’t generate a lot of volatility. For almost the entire day price remained in a tight range, with a bearish bias.
Technical Outlook
The support at 1.2125 was breached yesterday and it looks like the pair is headed for 1.2040 if the bears can maintain their control. Today the market is closed, celebrating the first day of the New Year and price movement will be suspended.
Fundamental Outlook
Most banks around the world are closed today and no economic indicators will be released.
GBP/USD
The pair tested 1.5590 resistance yesterday but the break couldn’t be sustained and the bears quickly brought price below the mentioned level.
Technical Outlook
For the time being the pair shows rejection around 1.5590 but today no movement will be seen as the world celebrates the New Year. Once the market re-opens, we expect further downside advances.
Fundamental Outlook
As mentioned before, banks will be closed and no financial or economic indicators will be released today. Happy New Year!
FOREX NEWS: TRADING RESUMES. LOW VOLUME IS STILL PRESENT
EUR/USD
Forex News: Yesterday the market was closed as the world celebrated the first day of the New Year so price didn’t show any movement. Today the market resumes normal movement but low volume is likely to still be present.
Technical Outlook
The pair is trading below 1.2125 and below the 50 period Exponential Moving Average so the bias is bearish but the relative Strength Index is trading below the 30 level, a fact which indicates an oversold condition. This makes us believe that today we will see bullish movement but keep in mind that volume is still not back to normal so we might see irregular price action.
Fundamental Outlook
At 3:00 pm GMT the US Manufacturing PMI is released, with an expected value of 57.6, a small decrease from the previous 58.7. An even smaller value would probably weaken the US Dollar but the market might overlook this release considering it’s the first trading day of the New Year.
GBP/USD
No movement was seen yesterday and price remained confined between 1.5590 resistance and the 50 period Exponential Moving Average.
Technical Outlook
If price will have trouble breaking the 50 period Exponential Moving Average, we will probably see a move above the resistance at 1.5590 but a break of the mentioned EMA will most likely take the pair below 1.5540 support. Our bias is neutral and we consider that an extreme condition of the Relative Strength Index (above 70 or below 30) will generate a reversal move.
Fundamental Outlook
The United Kingdom will release the Manufacturing PMI at 9:30 am GMT. The forecast is 53.7, a small increase from last month’s 53.5 and higher values are usually beneficial for the Pound as this indicator is a measure of optimism among purchasing managers and acts as a leading signal of economic health.
FOREX NEWS: OVEREXTENDED PRICES CALL FOR A BULLISH PULLBACK
EUR/USD
Forex News: Friday the US Dollar continued to strengthen against most of its peers on speculation that the Fed might raise interest rates during the first part of 2015. The entire day was controlled by the bears and the pair moved below support.
Technical Outlook
Although price action is bearish and 1.2040 support was broken, we expect the pair to move on a bullish path today. This is based on the fact that the Relative Strength Index is trading below the 30 level for a long period and price is overextended to the south. However, keep in mind that we are in a strong downtrend and the pair is under pressure, so it is likely to see further advances south after a bullish pullback.
Fundamental Outlook
At 1:00 pm GMT the German Preliminary Consumer Price Index is released and expected to rise to 0.1% from the previous 0.0%. The indicator shows the change in the price of goods and services and acts as the main gauge of inflation; usually numbers that exceed expectations are beneficial for the currency.
GBP/USD
The Pound weakened tremendously Friday as the British economy is showing signs of slowing down and the United States move closer to a potential interest rate hike.
Technical Outlook
The huge drop seen Friday is likely to generate a pullback to the upside. The extreme oversold condition of the Relative Strength Index adds to this prediction but the strength of the bears is undeniable so we expect price to continue to move south after this retracement is complete. Potential resistance is located at 1.5420 while support sits at 1.5260.
Fundamental Outlook
The British Construction Purchasing Managers’ Index is released today at 9:30 am GMT. The indicator gauges optimism among purchasing managers form the construction sector and acts as a leading indicator of economic health. Higher numbers than the anticipated 59.2 will most likely strengthen the Pound, taking the pair higher.
FOREX NEWS: THE MARKET REMAINS OVERSOLD. RETRACEMENTS STILL EXPECTED
EUR/USD
Forex News: The market opened with a big gap and the Euro took a big hit yesterday as concern about a potential Greek separation from the European Union escalated. Speculation about ECB purchasing bonds on a large scale added to the bearish momentum.
Technical Outlook
The sudden drop seen at market open yesterday was stopped by the support at 1.1875. We expect this level to be tested again today but bullish retracements are still a distinct possibility so we might see a touch of the 50 period Exponential Moving Average on an hourly chart. On a four hour chart both the Relative Strength Index and the Stochastic (11,6,6) are moving upwards, coming from oversold territory.
Fundamental Outlook
The U.S. Non-Manufacturing PMI is released today at 3:00 pm GMT with an expected change to 58.2 from the previous 59.3. This survey is based on the opinions of about 400 purchasing managers outside of the manufacturing industry and tries to gauge their optimism regarding business and economic conditions. It acts as a leading indicator of economic health and that’s why numbers that exceed expectations are considered beneficial for the US Dollar.
GBP/USD
The pair had a huge drop which took price below 1.5260 support; the weekly gap was closed by a quick bullish move but then price dropped again on the back of a worse than expected value of the British Construction PMI.
Technical Outlook
The Relative Strength Index is struggling to move out of oversold territory but the Pound is weakening. If price doesn’t move above 1.5260 soon, we expect further downside movement but otherwise, the first target is represented by 1.5320 short term resistance. This level and the 50 period Exponential Moving Average will probably create a confluence zone which will be hard to break if price touches it.
Fundamental Outlook
At 9:30 am GMT the British Services PMI is announced; the forecast is 58.9, a small increase from last month’s 58.6. The indicator tries to measure optimism among purchasing managers from the Services sector and usually, higher than anticipated values strengthen the Pound.
FOREX NEWS: US EMPLOYMENT DATA AND FOMC MEETING MINUTES IN THE SPOTLIGHT
EUR/USD
Forex News: Yesterday the pair continued to move south after a small retracement higher. Overall price action was controlled by the bears but immediate support couldn’t be broken.
Technical Outlook
Price came in close vicinity of 1.1875 support and showed rejection at this level. Both the Relative Strength Index and the Stochastic reached oversold territory and these facts make us believe that a move higher is in order. The first barrier is the 50 period Exponential Moving Average and if this resistance can be broken, the next target is 1.2040. The pair is still in a downtrend so moves south cannot be ruled out.
Fundamental Outlook
At 10:00 am GMT the European Consumer Price Index is announced and expected to change 0.0% while last month’s value was 0.3%. The CPI is the main gauge of inflation and a higher value is usually beneficial for the Euro because current inflation levels are considered too low by the ECB.
The ADP Non Farm Employment Change is released at 1:15 pm GMT and shows the change in the number of new jobs created during the previous month. However, today’s version is released by a privately owned company, not by the US Government so the impact is usually lower. The expected number is 227K, an increase from last month’s 208K and higher numbers strengthen the US Dollar. Later in the day, at 7:00 pm GMT the FOMC Meeting Minutes are released, offering details about the latest Fed Meeting.
GBP/USD
Resistance couldn’t be broken yesterday and the pair dropped on the back of Pound weakness generated by a worse than anticipated value of the Services PMI.
Technical Outlook
The bulls failed to take price above 1.5260 resistance and the rest of the day belonged to the bears. Price action created minor support around 1.5165 and a break of this level would probably take the pair into the next support, located at 1.5100. The Relative Strength Index moving upwards, coming from below 30 and this favors bullish movement.
Fundamental Outlook
The United Kingdom didn’t schedule major economic releases today so price direction will be mainly influenced by the U.S. indicators and by the technical aspect.
FOREX NEWS: MULTI-YEAR LOWS REACHED AS THE DOLLAR CONTINUES ITS RUN
EUR/USD
Forex News; Yesterday we’ve seen that European inflation is still dropping and as a result the downtrend extended further. The US employment report posted better than anticipated numbers and this added to the bears’ strength.
Technical Outlook
The FOMC Meeting Minutes created mixed reaction as the Fed mentioned that a rate hike is unlikely before April but overall price action was bearish for most of the day, moving below 1.1875. If a bullish retracement will occur, the mentioned level will probably turn into resistance and the chances of further bearish movement will be increased near this level. Immediate support sits at 1.1800.
Fundamental Outlook
European Retail Sales are released today at 10:00 am GMT with an expected change of 0.3% compared with last month’s 0.4%. Sales made at a retail level are crucial for an economy because consumer spending represents an important part of overall economic activity, thus higher numbers will generate some Euro strength.
GBP/USD
The pair broke the important support at 1.5100 and continued to move lower for most of the day. The US Dollar had mixed behavior at the time of the Meeting Minutes release.
Technical Outlook
After moving below 1.5100, the pair retraced to test the recently broken level. Now price action around this potential resistance will determine the next short term direction: a bounce will open the door for further downside action, while a move above it will probably take the pair into the immediate resistance created by the hourly 50 period Exponential Moving Average. The next psychological and technical support sits at 1.5000.
Fundamental Outlook
The Bank of England will announce the interest rate today at 12:00 pm GMT but no change is expected from the current 0.50% so, unless a huge surprise happens, the event will not create a lot of volatility.
FOREX NEWS: U.S. NON FARM PAYROLLS – ENDING THE WEEK WITH STRONG MOVEMENT
EUR/USD
Forex News: Yesterday the bears remained in control of the pair but some upside pressure was seen at the time of the European Retail Sales release which posted better than expected numbers.
Technical Outlook
Both the Relative Strength Index and the Stochastic remain in the lower part of their respective windows, near oversold levels but the pair continues to slide lower. The minor support at 1.1800 was broken yesterday and now it is being tested from below; if price returns above it, the first resistance is offered by the 50 period Exponential Moving Average but keep in mind that today the technical side will be secondary to the fundamental one.
Fundamental Outlook
The day’s main event is the release of the U.S. Non Farm Employment report which is scheduled at 1:30 pm GMT and it’s considered the most important jobs related data. If more jobs are created, the economy is thriving and consumer spending will probably increase in the near future so better numbers than the expected 241K will most likely strengthen the US Dollar.
GBP/USD
The Bank of England kept the interest rate at 0.50% and the announcement didn’t create a lot of volatility. The pair made another push for 1.5000 support but failed to touch it.
Technical Outlook
The picture remains bearish, with the first resistance located at 1.5100 and support at 1.5000. Yesterday’s price action created minor support at 1.5035 and this will be the first target if 1.5100 and the 50 period Exponential Moving Average cannot be broken. The day’s price action will be heavily influenced by the fundamental scene.
Fundamental Outlook
The US Non Farm Payrolls will be the day’s headline but apart from that an important role will be played by the release of the British Manufacturing Production scheduled at 9:30 am GMT and expected to increase 0.4% from the previous -0.7%. Such an increase would be beneficial for the Pound and would take the pair higher.
FOREX NEWS: A QUIET FUNDAMENTAL SCENE INFLUENCES PRICE ACTION
EUR/USD
Forex News: The US Non Farm Payrolls posted a better than expected number but still lower than last’s month value, a fact which created mixed movement Friday at the time of the release.
Technical Outlook
The first reaction to the US jobs report was a drop which was soon reversed and the pair started to move upwards. The immediate target is represented by 1.1875; this could be a place where the bears will take back control of the pair, especially if the Relative Strength Index and the Stochastic will be coming out of overbought territory. To the downside, the first potential support is located at 1.1750.
Fundamental Outlook
The day ahead lacks major economic releases, a fact which makes us believe that we will see slow, ranging movement.
GBP/USD
Overall Friday was a bullish day, with irregular movement present at the time of the American Non Farm Employment Change report. The pair remained above 1.5100 for the entire day.
Technical Outlook
Price moved above horizontal resistance and above the 50 period Exponential Moving Average on an hourly chart, completing a much needed bullish retracement. A downtrend is still in place and this increases the chances of bearish movement with the first target being located at 1.5100, followed by 1.5035. To the upside, the first resistance sits at 1.5260.
Fundamental Outlook
The United Kingdom didn’t schedule economic releases today, so price action will be driven by the technical aspect but we don’t expect any substantial developments.
FOREX NEWS: MIXED PRICE ACTION AHEAD OF THE BRITISH CONSUMER PRICE INDEX
EUR/USD
Forex News: The fundamental scene was calm yesterday as no major news came out and price had mixed behavior, reversing a drop which occurred early in the day.
Technical Outlook
The pair moved above and below the 50 period Exponential Moving Average on an hourly chart, without clear direction although the bears made an attempt to retake control. From a short term perspective the picture is mixed and the bias neutral, with the first levels of importance being 1.1875 as resistance and 1.1750 as support. The Stochastic entered oversold territory but the Relative Strength Index doesn’t confirm it so we will not allocate a lot of importance to this bullish signal.
Fundamental Outlook
Today is a lackluster fundamental day, but a noteworthy event is the release of the U.S. JOLTS Job Openings scheduled at 3:00 pm GMT. The indicator shows the number of jobs openings, excluding the farming industry but this is a lagging indicator because it is released about 40 days after the month for which it is calculated has ended. Nonetheless, better numbers than today’s expected 4.91M can strengthen the US Dollar.
GBP/USD
Trading was mixed yesterday as the Pound weakened during the first part of the day but most of the losses were erased in the second part, after a bounce at 1.5100 support.
Technical Outlook
Short term price action created minor resistance at 1.5190 and we expect another encounter with this level considering the fact that yesterday the pair bounced immediately after a bounce at 1.5100. The Relative Strength Index doesn’t show an extreme reading and price is moving close to the 50 period Exponential Moving Average so the short term control doesn’t belong to either side but a clear downtrend is in place and a touch of 1.5190 might generate bearish action.
Fundamental Outlook
The British Consumer Price Index, which is the main gauge of inflation, will be released today at 9:30 am GMT. The expected change is 0.7% while the previous was 1.0% and such a drop will most likely trigger Pound weakness.
FOREX NEWS: U.S. RETAIL SALES TO INFLUENCE THE GREENBACK AS SUPPORT STILL HOLDS
EUR/USD
Forex News: The pair continued its descent yesterday on the back of a weaker Euro and short term support was touched again. Concern that the ECB will add more stimulus contributed to the pair’s bearish movement.
Technical Outlook
Price bounced higher as soon as 1.1750 support was touched, showing that bears are having difficulties breaking this level. Both the Relative Strength Index and the Stochastic are close to their respective oversold levels and are starting to move up; this, coupled with the bullish bounce seen at 1.1750 increases the chance of a move north which could find resistance at the 50 period Exponential Moving Average.
Fundamental Outlook
The U.S. Retail Sales are the day’s main event and is scheduled at 1:30 pm GMT. The expected change is 0.2% from the previous 0.7%, a fact which would be detrimental or the US Dollar because a major part of overall economic activity is represented by sales made at a retail level. Keep an eye on the CORE version of the indicator which is released at the same time but excludes automobiles from calculation.
GBP/USD
The pair had another day characterized by a sharp reversal yesterday as we saw price drop about 100 pips and then climb the same distance. British inflation dropped more than expected and this was the main reason for the initial move south.
Technical Outlook
After failing to break 1.5190 resistance, price dropped below 1.5100 but the break soon proved to be false and a bullish bounce took price back up, close to 1.5190. This is a sign that price action is ruled by indecision and the next direction is not clear until a breakout occurs. Even this break of support or resistance happens today, a safer entry would be after a successful retest of the recently broken level.
Fundamental Outlook
Bank of England Governor Mark Carney will testify today before the Treasury Select Committee; the topic is the Financial Stability Report and the testimony could bring some irregular and possibly strong movement so caution is recommended. The scheduled time is 2:15 pm GMT.
FOREX NEWS: SHORT TERM RESISTANCE THREATENED. BOUNCE OR BREAK?
EUR/USD
Forex News: The U.S. Dollar took a hit yesterday as the American Retail Sales posted a much worse than expected change of -0.9%, indicating an economic slowdown. The bulls took control of the pair after a failed attempt to break 1.1750 support.
Technical Outlook
The downtrend remains intact as long as 1.1875 is resistance but it looks like the bullish pullback might continue until the mentioned level is touched. The failed break of 1.1750 shows that the downtrend was overextended and needed a “breather” in the form of a retracement higher. If the bulls cannot maintain price above the 50 period Exponential Moving Average we will most likely see another attempt to break 1.1750.
Fundamental Outlook
The U.S. Producer Price Index is released at 1:30 pm GMT and expected to change -0.3% while last month’s value was -0.2%. Higher numbers are usually beneficial for the greenback because the PPI has inflationary implications (a higher price charged by producers will be paid by the consumer eventually).
At 3:00 pm GMT the Philly Fed Manufacturing Index is released, offering information about the state of the manufacturing sector in the Philadelphia district. Higher values than the expected 20.3 are considered bullish for the US Dollar. Later in the day, at 4:15 pm GMT, Bundesbank President Weidmann will deliver a speech in Berlin and this could be a volatility trigger if the he will talk about the Euro crisis.
GBP/USD
The US Dollar weakened against the Pound as well and as a result the pair moved above resistance. Mark Carney’s testimony was almost unnoticed by market participants.
Technical Outlook
After several attempts, the pair finally broke 1.5190 resistance and continued upwards until 1.5260 was touched. Today we expect a break of either one of the mentioned levels but notice that once 1.5260 was touched, price immediately bounced lower, a fact which shows that the bears still have a lot of underlying power and that we might see a move below 1.5190.
Fundamental Outlook
The United Kingdom didn’t schedule major news releases so price action will be influenced by the U.S. events and by technical factors.
