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2015.05.26 :Forex News: American inflation data and U.K. GDP – the day’s main market movers

EUR/USD

Forex News: The testimonies of Yellen and Draghi did not create the anticipated volatility and the pair had another slow, choppy day. Both support and resistance are still intact and the ranging period is still not over.



Technical Outlook
Although it’s mostly flat, the 50 period Exponential Moving Average seems to offer a minimum of resistance as seen from yesterday’s price action. However, the pair is moving sideways and lately it isn’t even trying to break the resistance at 1.1440 or the support at 1.1270. Until a clean break of the mentioned levels occurs, the pair’s movement will remain choppy and unpredictable.

Fundamental Outlook
American inflation data will be today’s main event. The US Consumer Price Index, which is the primary gauge of inflation will be released at 1:30 pm GMT and is expected to change -0.6%, compared with the previous -0.4%. Fed Chair Yellen mentioned during a previous testimony that inflation is expected to grow towards 2.0%, but so far the numbers are still dropping; if today we see another dip, the US Dollar is likely to be negatively affected.

GBP/USD

The British Bankers’ Association Mortgage Approvals came out close to the anticipated value but the Pound continued to strengthen throughout the day and major resistance was touched.



Technical Outlook
The resistance located at 1.5540 was touched yesterday and price quickly reacted by moving lower; the Relative Strength Index was overbought and this contributed to the bounce. Today we expect price to remain between 1.5540 resistance and the 50 period Exponential Moving Average but a break of either of them will probably determine the next medium term direction. Another bounce at resistance would imply that lower prices will follow.

Fundamental Outlook
At 9:30 am GMT the second estimate of the British Gross Domestic Product is released (forecast 0.5%) and can have a strong impact on the Pound since the GDP is an economy’s main performance gauge; however, this is the second version of the indicator and tends to have a lower impact than the Preliminary version.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

2015.05.27 :Forex News: Traders’ attention shifts towards German inflation and American GDP as bears regain control

EUR/USD

Forex News: Yesterday the pair finally broke out of the range it was confined in. American inflation increased as shown by the Core version of the CPI indicator. The Durable Goods Orders also showed an increase, contributing to US Dollar strength.



Technical Outlook
The break of 1.1270 support will play a major role for future price action if the bears can keep the pair below this level. Clearly the recent momentum belongs to the bears and we anticipate further movement south but a re-test of the broken level is very possible, considering that the Relative Strength Index is close to its 30 level, indicating oversold. Our current bias is bearish after brief retracements, with 1.1270 acting as potential resistance and 1.1100 as support.

Fundamental Outlook
The focus will shift today towards German inflation data which is released at 1:00 pm GMT. A hefty increase from the previous -1.1% to 0.6% is expected and if this forecast comes true, the euro will most likely strengthen. Half an hour later the U.S. Preliminary Gross Domestic Product comes out; the anticipated change is 2.1% while the previous was 2.6%. Although the first version (Advance) is the most important, the Preliminary also has the potential to strongly move the currency; higher percentages are beneficial for the greenback.

GBP/USD

British Gross Domestic Product matched analysts’ expectations and the event didn’t have a massive impact but the US data generated a sharp fall which broke several support levels.



Technical Outlook
The bulls tried to take price above 1.5540 – 1.5550 resistance but failed to do so and this was a sign that their strength is fading. The pair is now trading comfortably below the 50 period Exponential Moving Average and below 1.5460 but 1.5420 is not clearly broken yet. We expect price to move below this level, towards 1.5340 but before that can happen, a retracement higher is needed; adding to this opinion is the position of the Relative Strength Index which is signaling an oversold condition.

Fundamental Outlook
The United Kingdom didn’t schedule important economic data releases today so price direction will be influenced by the U.S. events and by the technical aspect.

We hope you had a profitable trading week and we wish you a relaxing weekend.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.