Technical News | GDMFX Brokerage

[pasfx]

FOREX NEWS: MARIO DRAGHI STEALS THE SPOTLIGHT ONCE AGAIN​

EUR/USD

Forex News: Yesterday’s trading session started with Euro bulls in control of the pair, on the back of a better than anticipated value of the German Manufacturing PMI. However, the bears came back strong in the second part of yesterday and almost nullified previous advances.

Technical Outlook

A move that appeared to be a valid break of resistance was soon reversed and price traveled south of 1.3830 once again. This erratic movement suggests that the market is still in a state of indecision and that both bullish and bearish moves can occur. The main levels to watch today are 1.3900 as resistance and 1.3760 as support and stronger moves are anticipated, especially at the time of Mario Draghi’s speech.

Fundamental Outlook

ECB President Mario Draghi will speak today at a conference held in Amsterdam and as always, his speech can be a good source of volatility and strong moves, especially if he will talk about ECB’s future monetary policy. The speech is scheduled at 9:00 am GMT and an hour earlier, the German Ifo Business Climate will be released, with an anticipated decrease from 110.7 to 110.5. This is a survey of about 7,000 businesses, which acts as a gauge of optimism so usually, higher than anticipated numbers are beneficial for the Euro.

Later in the day, at 12:30 pm GMT, the United States will release the Durable Goods Orders (orders for goods with a life expectancy of at least three years). Te anticipated value is 2.1% while the previous was 2.2% and under normal circumstances, a decrease would weaken the US Dollar.

GBP/USD

For almost the entire duration of yesterday’s trading session, the Pound weakened against the greenback and overall price action trended smoothly downward.

Technical Outlook

The strong resistance located at 1.6820 pushed the pair lower yesterday and by doing so, it also showed us that the long term uptrend is beginning to waver. For today’s trading session we anticipate a move below 1.6750, a fact which would also signify a big victory for the bears. Considering the fact that we are still in an uptrend from a long term perspective, another move into 1.6820 is not out of the question.


Fundamental Outlook

The United Kingdom didn’t schedule any important economic indicator releases today so price action will be mostly influenced by the technical aspect and by the US event mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INDECISION STILL PLAYS A MAJOR ROLE IN THE MARKET​

EUR/USD

Forex News: During a speech at a conference in Amsterdam, Mario Draghi mentioned that “both unconventional and conventional instruments” will be used to deal with the possible threat of deflation. His comment weakened the Euro and allowed the pair to move lower initially but later in the day, growing turmoil in Ukraine generated another climb.

Technical Outlook

Indecision is still present in the market as we saw yesterday from the multiple changes of direction. Price is still struggling without success to break 1.3830 to the north and on the other hand, bears cannot drive the pair lower. We are still expecting a stronger move which will determine the next medium term bias but the direction of that move is hard to predict. The important levels to watch are 1.3760 as support and 1.3830 as immediate resistance, followed by 1.3900.

Fundamental Outlook

Today no major indicator releases are scheduled by either Europe or the United States so traders will focus on the technical factors.

GBP/USD

The pair had a slow day and the drop seen Wednesday couldn’t be continued yesterday. Instead, bulls and bears alternated their control over the pair numerous times, creating a difficult trading environment.

Technical Outlook

Although yesterday’s trading session lacked clear direction, we still believe that a move into 1.6750 support is in order, but since the pair is ranging lately, we don’t exclude the possibility of moves into 1.6820 resistance. Today the technical aspect will be somewhat secondary because the only major indicator of the day comes from the United Kingdom and this is likely to have a big impact on the pair’s movement.

Fundamental Outlook

The indicator we mentioned above is United Kingdom’s Retail Sales; the release is scheduled at 8:30 am GMT and the anticipated value is -0.4%, a sharp drop from the previous 1.7%. Such a drop would be detrimental for the Pound because sales made at a retail level are an important part of the entire economic activity.

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

Written by: Bogdan Giulvezan

 

[pasfx]

Forex News: A slow Monday ahead; no major indicators are released


EUR/USD

Forex News: Friday the pair moved in a 20 pip range and no economic data was released by the United States or Europe, making trading very difficult.

Technical Outlook

A 20 pip range is certainly not enough for proper technical analysis and holds almost no clues for future direction. Price has moved above 1.3830 but this cannot be considered a real break, especially because lately this level has been pierced several times. Our bias is neutral until a strong move occurs, which will most likely determine the pair’s next direction. For the moment 1.3760 is support and resistance sits at 1.3900.

Fundamental Outlook

The day is pretty slow in terms of economic releases and the only indicator worth mentioning is the US Pending Home Sales which offers insights into the American house market and has the potential to strengthen the US Dollar if it posts a higher value than the anticipated 1.0%. The release is scheduled at 2:00 pm GMT.

GBP/USD

Market participants expected the UK Retail Sales to generate strong volatility but after a quick surge up, the move slowed and then reversed almost completely, making Friday another difficult day for intraday trading.

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Technical Outlook

Friday the bulls made another attempt to break the level of 1.6820 but this resulted in a bounce lower, showing that resistance is holding, thus increasing the chances of a move lower. We don’t expect major moves today, mainly because no major news comes out, but the levels to watch remain 1.6820 as resistance and 1.6750 as support.

Fundamental Outlook

Price movement will be mainly affected by the US housing data and by the technical aspect of the market as the United Kingdom didn’t schedule any economic or financial indicator releases.


Written by: Bogdan Giulvezan

 

[pasfx]

Forex News: German CPI and British GDP – the market-movers of the day​

EUR/USD

Forex News: Yesterday the pair experienced a sudden rally, which was short lived because the better than expected value of the US Pending Home Sales strengthened the US Dollar and brought price lower, in close vicinity to 1.3830.

Technical Outlook

What appeared to be a strong move away from 1.3830 proved to be a single impulse which was quickly reversed, showing us that bulls lack determination and strength to drive price higher. If price returns below 1.3830, the next target will be the support at 1.3760. The pair continues to trade without clear direction and the technical aspect will be secondary today because important data is released.

Fundamental Outlook

The German Consumer Price Index is released today at 12:00 pm GMT and expected to increase to 1.4% from the current 1.0%. Such an increase would be beneficial for the Euro, especially because German inflation influences the entire Euro Zone. The United States release at 2:00 pm GMT the Consumer Confidence, a leading indicator of consumer spending. For today’s release, an increase is forecast, from the previous 82.3 to 82.9. Higher values for this indicator usually strengthen the US Dollar and push the pair lower.

GBP/USD

Speculation that today we will see a better than expected value of the UK Gross Domestic Product brought yesterday the pair higher, but similar to the EUR/USD, the rally was soon reversed.

Technical Outlook

Yesterday’s high located at 1.6858 will most likely act as resistance if price touches it again but if it is surpassed, the next resistance is located at 1.6880 (visible on a weekly chart). The first support sits at 1.6750 and since yesterday’s move up is not convincing and was quickly reversed, we favor a drop towards the mentioned support.

Fundamental Outlook

The technical aspect will be somewhat secondary today because United Kingdom’s Gross Domestic Product is released at 8:30 am GMT. An increase is expected, from the previous 2.7% to 3.2% and if this prediction comes true, the Pound will most likely strengthen because the GDP is an economy’s main gauge of overall performance. As always, the pair will be also influenced by the US data released throughout the day.


Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EUROPE FOCUSES ON THE CPI WHILE THE US DOLLAR WILL BE INFLUENCED BY SEVERAL HIGH IMPACT RELEASES

EUR/USD

Forex News: The German Consumer Price Index posted a lower than expected value, weakening the Euro and allowing the bears to take control of the pair and to take price below 1.3830.

Technical Outlook

In light of recent events it looks like the resistance at 1.3900 will not be tested soon as the pair seems to be headed towards 1.3760 support. If this move does occur, the first barrier which needs to be broken is the support at 1.3790 but a lot depends on the value which will be posted today by the European CPI so the technical aspect will be somewhat secondary.

Fundamental Outlook

The European Consumer Price Index, which is the region’s most important inflation measure, will be released today at 9:00 am GMT and expected to increase from the current 0.5% to 0.8%. The ECB tries to maintain inflation just below 2% so the current value is considered too low and a figure which doesn’t meet or surpass expectations will most likely weaken the Euro. The ADP Non Farm Employment report will be released at 12:15 pm GMT and although it doesn’t have the huge impact of the government issued indicator (which comes out Friday), numbers above 203K will have a positive impact on the US Dollar.

At 12:30 pm GMT the US Gross Domestic Product is released and a decrease is anticipated: 1.2% from last month’s 2.6%. Such a drop would signify a slower economy, with decreased activity, thus weakening the greenback. Later in the day, at 6:00 pm GMT the US Interest Rate is announced (no change anticipated from the current <0.25%), together with the FOMC Statement which will outline the reasons which stood behind the rate decision and will also show if the Fed will further trim the monetary stimulus (also known as quantitative easing).

GBP/USD

Yesterday’s main event for the Pound was the release of the Gross Domestic Product which showed a lower value than analysts expected and this took the pair lower; soon after, the bulls took price back up, creating a difficult to trade environment.

Technical Outlook

The pair had a mixed day yesterday, with a lot of sharp turns and no clear direction but another move below 1.6820 would be indicative of bear strength and would suggest the uptrend is severely weakened. The Relative Strength Index doesn’t show an extreme condition of the market and price action does not favor a specific direction so today the pair’s movement will be highly affected by the fundamental aspect of the market.

Fundamental Outlook

Although today the United Kingdom doesn’t release major data, the day will probably have strong movement as the US events will most likely have a huge impact on price direction.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: LABOR DAY GENERATES A DAY WITH LOW VOLUME

EUR/USD

Forex News: Although the European CPI didn’t meet expectations of 0.8%, it showed that inflation started to pick up and posted a reading of 0.7%, an increase from the previous 0.5%. This fact strengthened the Euro and the pair climbed strongly. The Fed decided to further cut bond purchases by another $10 billion a fact which was anticipated by market participants and didn’t create a lot of volatility.

Technical Outlook

The support at 1.3790 was tested yesterday and it rejected higher the initial fall seen at the time of the CPI release. The US Dollar shows signs of weakness so we might see a touch of 1.3900 resistance sooner than anticipated. For the moment the first support sits at 1.3830 and the latest momentum belongs to the bulls so moves north are likely to happen, at least until the Relative Strength Index becomes overbought.

Fundamental Outlook

Most European banks will be closed today in celebration of Labor Day and this may translate into irregular movement and low volume. Fed Chair Janet Yellen will speak at 12:30 pm GMT at a summit in Washington DC and this will most likely affect the pair’s movement, especially if she will offer hints about future monetary policy. The US Dollar will also be affected today by the release of the Manufacturing PMI which is a survey of about 400 purchasing managers, focused on their opinions regarding business conditions in the manufacturing sector. The release is scheduled at 2:00 pm GMT and an increase is expected, from the previous 53.7 to 54.3, a fact which would strengthen the greenback.

GBP/USD

Yesterday the US Gross Domestic Product posted a much worse than anticipated value which allowed the Pound to take the pair into the resistance located at 1.6880.

Technical Outlook

The bulls scored another major victory by taking price into the resistance at 1.6880, a quote that was last seen in November 2009. Such a high price is hard to sustain and we will most likely see retracements lower but keep in mind that bulls control the pair and further advances are not out of the question. The next resistance is located at 1.7040 while support sits at 1.6820.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing PMI comes out, with an anticipated value of 55.4, an almost insignificant increase from the previous 55.3. The survey is based on the opinions of about 600 purchasing managers and its effect on the Pound can be a hefty one if a higher than anticipated figure will be posted. As always, the pair’s movement will be affected by the US events as well.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US NON FARM PAYROLLS – HUGE MOVEMENT AHEAD

EUR/USD

Forex News: The Euro continued to climb yesterday on speculation that the ECB will not introduce any form of quantitative easing, but later in the day a better than expected value of the US Manufacturing PMI brought price back down. However, all this up and down movement took place in a very small range, probably due to low volume generated by Labor Day.

Technical Outlook

The resistance at 1.3900 wasn’t threatened but bullish moves are expected today, mainly because the momentum favors the buyers. The Relative Strength Index didn’t reach an overbought state so the market is not considered overextended and price can continue upwards. Today is an important day for the US Dollar and the main focus will be on the Non Farm employment report which usually generates huge moves so technical aspects will be overshadowed by this release.

Fundamental Outlook

The US Non Farm Employment Change (also known as Non Farm Payrolls) is released today at 12:30 pm GMT. The estimated figure is 216K, an increase from the previous 192K and if this forecast comes true, we will most likely see US Dollar strength because the NFP is widely regarded as the most important gauge of employment in the United States and is also a leading indicator of consumer spending.

GBP/USD

Manufacturing in the UK showed a surprising improvement yesterday, strengthening the Pound and allowing the pair to climb to 1.6920. Overall we had a mixed trading day with several changes of direction seen on the lower time frames.

Technical Outlook

Yesterday’s high located at 1.6920 will most likely act as resistance today if the pair decides to climb back up again, but from a strictly technical point of view, we expect a move lower which will most likely find support at 1.6880. If this generates a bounce, 1.6920 will become the first bullish target but price action will be heavily influenced by the release of the NFP.

Fundamental Outlook

The British Construction PMI is released today at 8:30 am GMT and expected to decrease slightly from the previous 62.5 to 62.2. Since this is a leading indicator of economic health, higher numbers usually strengthen the Pound but its release often has a lesser impact compared to the Manufacturing PMI (released a day earlier). However, the headline of the day remains the US Non Farm Employment report.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US NON FARM PAYROLLS – HUGE MOVEMENT AHEAD

EUR/USD

Forex News: The Euro continued to climb yesterday on speculation that the ECB will not introduce any form of quantitative easing, but later in the day a better than expected value of the US Manufacturing PMI brought price back down. However, all this up and down movement took place in a very small range, probably due to low volume generated by Labor Day.

Technical Outlook

The resistance at 1.3900 wasn’t threatened but bullish moves are expected today, mainly because the momentum favors the buyers. The Relative Strength Index didn’t reach an overbought state so the market is not considered overextended and price can continue upwards. Today is an important day for the US Dollar and the main focus will be on the Non Farm employment report which usually generates huge moves so technical aspects will be overshadowed by this release.

Fundamental Outlook

The US Non Farm Employment Change (also known as Non Farm Payrolls) is released today at 12:30 pm GMT. The estimated figure is 216K, an increase from the previous 192K and if this forecast comes true, we will most likely see US Dollar strength because the NFP is widely regarded as the most important gauge of employment in the United States and is also a leading indicator of consumer spending.

GBP/USD

Manufacturing in the UK showed a surprising improvement yesterday, strengthening the Pound and allowing the pair to climb to 1.6920. Overall we had a mixed trading day with several changes of direction seen on the lower time frames.

Technical Outlook

Yesterday’s high located at 1.6920 will most likely act as resistance today if the pair decides to climb back up again, but from a strictly technical point of view, we expect a move lower which will most likely find support at 1.6880. If this generates a bounce, 1.6920 will become the first bullish target but price action will be heavily influenced by the release of the NFP.

Fundamental Outlook

The British Construction PMI is released today at 8:30 am GMT and expected to decrease slightly from the previous 62.5 to 62.2. Since this is a leading indicator of economic health, higher numbers usually strengthen the Pound but its release often has a lesser impact compared to the Manufacturing PMI (released a day earlier). However, the headline of the day remains the US Non Farm Employment report.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: TENSIONS IN UKRAINE. WEAKNESS SHOWN BY THE US DOLLAR

EUR/USD

Forex News: Friday was a difficult day for intraday traders as the US Non Farm Payrolls showed an improvement of the US jobs situation but the pair moved higher after an initial sharp drop. Some of this movement is attributed to heightened tensions and violence in Ukraine.

Technical Outlook

The pair printed a large pin bar on the support level at 1.3830 and this is indicative of a continued move upwards. The first resistance and target for the pair is 1.3900 but we must keep in mind that US employment is picking up and this may generate US Dollar strength which will be seen in the market once the Ukraine crisis calms down. If this is the case, 1.3830 will act again as support, followed by 1.3790 if a break occurs.

Fundamental Outlook

The Euro Group Meetings take place today, attended by Finance Ministers, The ECB President and other important personalities. Volatility will most likely be present until the meetings conclude so we recommend extra caution. At 2:00 pm GMT the US Non Manufacturing PMI will be released, with an estimated value of 54.3. This is a survey which shows the optimism of purchasing managers from the non-manufacturing sector and better than anticipated values can strengthen the US Dollar but the indicator usually has a lower impact than the Manufacturing PMI.

GBP/USD

A lower value of the United Kingdom Construction PMI weakened the Pound early Friday morning and took the pair lower but after the US Non Farm Payrolls release, the pair sharply climber back up, nullifying an initial bearish impulse.

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Technical Outlook

The pair barely touched the resistance located at 1.6820 and price immediately started to move north. This shows the underlying strength of the bulls and the fact that more upwards movement is likely to occur today. However, if the pair cannot climb quickly above 1.6880, we will probably see another touch of 1.6820 support.

Fundamental Outlook

United Kingdom’s banks will be closed today, celebrating May Day and no economic or financial data will be released, but the Euro Group Meetings and the US Non Manufacturing PMI will have an impact on price action.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: HIGH PRICES BECOME HARD TO SUSTAIN


EUR/USD

Forex News: Finally the pair started to move stronger yesterday as the Spanish Unemployment Change showed much better figures than anticipated. The surprising value of -111.6K (estimated -49.1K) turned this indicator, which is usually overlooked by market participants, into a major market mover.

Technical Outlook

Yesterday’s impulse is likely to be continued during the days to come but the condition of the Relative Strength Index which is trading above the level of 70 must be taken into consideration. The overbought state of the pair, as indicated by the RSI favors retracements, but as we know, the market can remain overbought for a long time before price actually starts to fall. If retracements do occur, 1.3900 will act as support while resistance is located at 1.3965, followed by the psychological level of 1.4000.

Fundamental Outlook

The German Factory Orders will be announced today at 6:00 am GMT, showing the monthly change in the value or orders placed with manufacturers. Although the indicator usually has a medium impact on the market, better numbers than the anticipated 0.3% can strengthen the Euro. A more important event is scheduled at 2:00 pm GMT: the testimony of Fed Chair Janet Yellen, in Washington DC. She will testify before the Joint Economic Committee of Congress and will answer questions which are not known in advance, a fact which will most likely generate strong moves, depending on her attitude and answers.

GBP/USD

The bulls had a tremendous day yesterday as they managed to take price about 130 pips higher on the back of a better than anticipated value of the UK Services PMI.

Technical Outlook

Yesterday’s huge climb renewed the uptrend and made 1.7040 the next target for the pair (visible on a Monthly chart). However, the current price is very high and this makes it hard to sustain; the Relative Strength Index is overbought on hourly, four-hour and daily charts and this enhances the probability of bearish moves. The first potential support is located at 1.6920.

Fundamental Outlook

Today the United Kingdom doesn’t release any major economic indicators, so traders will focus more on the technical aspect and on Janet Yellen’s testimony.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INTEREST RATES AND PUBLIC SPEECHES. VOLATILITY IS ALMOST CERTAIN

EUR/USD

Forex News: Price action slowed down considerably yesterday compared to the previous day and we saw a small retracement lower which didn’t manage to touch 1.3900. Janet Yellen’s speech generated some volatility but was mostly overlooked by market participants.

Technical Outlook

The picture remains bullish and moves north are favored after a touch of 1.3900. The Relative Strength Index is just coming out of overbought territory, heading down and that’s why we anticipate a touch of 1.3900 before price can resume upwards movement, headed for 1.3965. However, a lot depends on the ECB stance that will be presented today during the Press Conference.

Fundamental Outlook

At 11:45 am GMT the European Central Bank will announce if any changes were made to the Interest Rate (currently 0.25%) and at 12:30 pm GMT, ECB President Mario Draghi will hold a Press Conference during which he will answer journalists’ questions and will talk about future monetary policy direction. The Rate is not expected to change but the ECB Press Conference is considered one of the most important events for Euro’s short term movement so we recommend extra caution if trading during it. Fed Chair Janet Yellen will testify today before the Senate Budget Committee and this is another reason for increased volatility but the market’s reaction remains to be seen.

GBP/USD

Similar to the Euro, the Pound retraced yesterday but the bearish move lacked strength and the market was mostly in a ranging state, with a lot of choppy price action.

Technical Outlook

The Pound is showing tremendous strength lately and yesterday’s bearish movement was not convincing, but a touch of 1.6920 is not out of the question. If this touch occurs, it will most likely trigger a bounce higher and the first barrier in front of rising prices is the latest top created at 1.6996, followed by 1.7040 resistance.

Fundamental Outlook

The Pound will be affected today by the release of the Official Bank Rate which usually creates volatility even if no change takes place. The event is scheduled at 11:00 am GMT and no change is anticipated from the current 0.50%. Yellen’s testimony later in the day will have an impact as well.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A REVERSAL IN THE MAKING?

EUR/USD

Forex News: The bears took control of the pair yesterday as ECB President Mario Draghi offered clear hints about an Interest Rate cut in June if the risk of deflation still persists. His comments took the pair almost 150 pips lower after a previous climb which nearly touched the psychological resistance at 1.4000.

Technical Outlook

Without a doubt, Mario Draghi’s stance favors the bears for the medium term outlook. Today we expect a continuation of yesterday’s move and we are biased towards a touch of 1.3830. The Relative Strength Index on a four hour chart doesn’t indicate an oversold condition so price can move lower before a retracement higher occurs. To the upside, the first level of interest is 1.3900.

Fundamental Outlook

The German Trade Balance (difference in value between imports and exports) will be released today at 6:00 am GMT and it’s expected to increase from 15.7B to 16.9B. Figures that surpass estimates are considered bullish for the Euro, but the indicator is not a high impact one and its release may go unnoticed by the market.

GBP/USD

The Bank of England did not modify the Interest Rate, as anticipated and the pair traded mostly sideways, without clear direction.

Technical Outlook

The pair moved yesterday in a small range and neither bulls nor bears made clear statements of power but we maintain our belief that 1.6920 will be touched before bullish moves can occur. Once that happens, a bounce-or-break scenario will be in play: a bounce will indicate trend resumption and another encounter with the top created at 1.6996, while a break will make 1.6880 the first lower target.

Fundamental Outlook

United Kingdom’s Manufacturing Production numbers are released today at 8:30 am GMT. Manufacturing is an important part of the British economy and higher values than the estimated 0.3% (previous was 1.0%) can push the Pound higher. Later in the day, at 2:00 pm GMT, an estimate of the UK Gross Domestic Product will be announced. The current value is 0.9% and any higher number can push the pair north.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: SLUGGISH PRICE ACTION AS THE MARKET CALMS DOWN

EUR/USD

Forex News: The bearish impulse created Mario Draghi’s comments about a possible rate cut in June continued throughout Friday’s trading session and the pair moved substantially lower, breaking two important support levels.

Technical Outlook

The support at 1.3830 and the one at 1.3790 were broken decisively Friday, scoring an important victory for the bears. These levels are likely to turn into resistance now and the next lower target is 1.3700, but the Relative Strength Index reached oversold territory on a four hour chart and this makes us believe that we will witness a consolidation period. Price will most likely stall or even retrace slightly higher today, before an attempt at breaking 1.3700 will be made.

Fundamental Outlook


The only notable indicator is the US Federal Budget Balance which is announced at 6:00 pm GMT. The estimated figure is 112.6B, compared to last month’s -36.9B and such an increase would be beneficial for the US Dollar so we would most likely see lower prices.

GBP/USD

Manufacturing Production in the UK came out better than anticipated, but lower than the previous value so a slowdown can be seen and this, coupled with a stronger US Dollar, triggered a sharp fall.

Technical Outlook

Friday’s strong drop found good support in close vicinity of 1.6820, but we consider that a touch of this level is going to happen today. However, a break is less likely, mostly because no major economic indicators are released today and the Relative Strength Index on a four hour chart is signaling an oversold condition. Potential resistance is located at 1.6880 but keep in mind that bears are in control of short term movement and a touch of this level will probably result in another move south.

Fundamental Outlook

The United Kingdom doesn’t release any major indicators today but the US Dollar and consequently the pair will be affected by the US Budget Balance release.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US RETAIL SALES BRING BACK VOLATILITY


EUR/USD

Forex News: The pair’s movement slowed significantly yesterday and price traded in a narrow range of less than 30 pips. A lot of this was due to the lack of economic data, combined with the fact that usually after strong movement, the market slows down for a while.

Technical Outlook

We expect action to pick up today and the market to resume the downwards movement seen last week, aiming for 1.3700 support. However, the Relative Strength Index continues to stay below the 30 level so the market is still oversold, increasing the chances of a move up which will most likely find resistance at 1.3790; the next resistance is located at 1.3830 but a touch of this level is not probable today.

Fundamental Outlook

The first important event of the day is the release of the German ZEW Economic Sentiment which is scheduled at 9:00 am GMT and expected to decrease from the previous 43.2 to 41.3. Since this is a gauge of optimism among German investors and analysts, better than estimated numbers can push the Euro higher. A more important indicator is released at 12:30 pm GMT: the US Retail Sales. The anticipated change is 0.5%, compared to last month’s 1.2% and usually higher values strengthen the greenback because sales made at a retail level represent a major part of the entire economic activity.

GBP/USD

This pair was slightly more active during yesterday’s trading session but overall we had ranging price action, characterized by an attempt of the bulls to take price above 1.6880.

Technical Outlook

The failed attempt to break the resistance located at 1.6880 took the Relative Strength Index out of oversold territory, showing that bears still have underlying strength and that a new move south is in order. The target for this move is most likely 1.6820 and from a strictly technical point of view, it can be reached today but the US Retail Sales can prove to be a deciding factor.

Fundamental Outlook

The United Kingdom didn’t schedule economic data releases today so all eyes will be on the United States for the Retail Sales release.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: POUND AFFECTED BY A CLUSTER OF EVENTS; EURO LIKELY TO RETRACE

EUR/USD

Forex News: Yesterday’s main market mover was the German ZEW Economic Sentiment which posted a very disappointing value of 33.1 while the anticipated one was 41.3. This huge gap between estimated and actual figure weakened the Euro substantially and took the pair into major support.

Technical Outlook

Price fell without first touching the resistance at 1.3790, a fact which indicates clear bear strength and signals a potential reversal of the long term bullish trend. However, the Relative Strength Index spent a considerable amount of time below the 30 level, a fact which indicates an oversold market and gives a heads-up for a move higher. This oversold condition, combined with the fact that price reached an important support level makes us believe that today the pair will either retrace higher or move in a ranging fashion.

Fundamental Outlook

The headline today is the release of the US Producer Price Index, scheduled at 12:30 pm GMT and expected to decrease from the previous 0.5% to 0.2%. The indicator tracks changes in the price charged by producers for their goods and services and it often signals fluctuations in inflation because a higher price charged by producers will be eventually passed on to the consumer. For today’s release, a figure that surpasses estimates is viewed as beneficial for the US Dollar.

GBP/USD

The bears dominated yesterday’s trading session and the disappointing value of the US Retail Sales didn’t do much to help the bulls. The support at 1.6820 was missed by a few pips and overall the pair had a normal trading day, without sharp reversals.

Technical Outlook

The pair’s direction will be heavily affected today by the fundamental aspect but from a strictly technical point of view, price is likely to penetrate the area between 1.6820 and 1.6750. The momentum still belongs to the bears and attempts to break resistance are quickly reversed; a break above 1.6880 would tip the balance in favor of the bulls but for the time being, there are no clear signs of buying pressure.

Fundamental Outlook

At 8:30 am GMT, United Kingdom’s Claimant Count is released, showing the change in the number of unemployed people; the expected figure is -30.7K a small decrease from the previous month’s -30.4K and since the indicator is a gauge of unemployment, lower numbers are beneficial for the Pound. At the same time, UK’s Unemployment Rate is announced, with a small decrease expected, from 6.9% to 6.8% (again, lower numbers strengthen the Pound).

An hour later, at 9:30 am GMT the Bank of England will publish the Inflation Report, containing inflation projections and an economic outlook for the next 2 years. At the same time Governor Mark Carney will hold a Press Conference during which he will discuss the Report. This entire cluster of events can trigger huge volatility and sharp moves so caution is recommended.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: CONSUMER PRICE INDEXES STEAL THE HEADLINES ONCE AGAIN


EUR/USD

Forex News: As expected, the pair had a calm and mostly sideways trading session yesterday. The bulls didn’t manage to take price significantly higher but at least they prevented the bears form making further advances.

Technical Outlook

Although price retraced slightly yesterday, the move wasn’t enough to clear the oversold condition of the Relative Strength Index, a fact which makes further drops more difficult. Adding to this, bullish divergence is also present (price made a lower low while the RSI only printed a double bottom) so from a strictly technical perspective, moves north are in order. If these moves occur, they must be seen as retracements in a short term downtrend, not necessarily reversals.

Fundamental Outlook

Market participants eagerly await the release of the Euro Zone Consumer Price Index which is scheduled at 9:00 am GMT. This is Euro Zone’s main inflation gauge and the ECB is closely watching it before deciding if monetary stimulus measures will be adopted at their June meeting. The risk of deflation is present and a lower value of the CPI than the estimated 0.7% can weaken the Euro; the opposite applies for a higher value. United States’ CPI will be announced today as well, but its importance is lower than the one of the European CPI; the release is scheduled at 12:30 pm GMT and the anticipated value is 0.3%.

The Philly Fed Manufacturing Index is perceived as a high impact indicator which shows the opinions of manufacturers from the Philadelphia district regarding economic and business conditions. The indicator is released at 2:00 pm GMT with an expected figure of 13.9, a decrease from the previous 16.6; higher values are considered bullish for the US Dollar.

GBP/USD

The Bank of England Inflation Report was less hawkish than expected and no hints about a near-future rate hike were given. The market perceived this as a dovish attitude of the BoE and as a result the pair had another bearish trading session.

Technical Outlook

The pair pierced through the support located at 1.6820 and even touched 1.6750. We expect bullish moves today even if the control belongs to the bears and we base this opinion on the fact that the current move is reaching an overextended phase and the Relative Strength Index is constantly touching the 30 level. Resistance sits at 1.6820 and if a touch of this level occurs, price is likely to bounce lower.

Fundamental Outlook

The Pound has a calm day in terms of economic data releases so price action will be mostly affected by the technical aspect and by the US indicators mentioned above.

Written by: Bogdan Giulvezan

 

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FOREX NEWS: A CALM END TO A WILD WEEK?

EUR/USD

Forex News: The data released yesterday was mixed but more hints about a rate cut emerged as ECB officials signaled that the Bank is preparing a package of monetary policy measures. The Euro dropped but later in the day it managed to erase all Dollar gains, creating a massive reversal.

Technical Outlook

It looks like the bulls have renewed their interest for the pair, a fact which is normal considering the oversold condition of the market and the bullish divergence present on the four-hour chart. Once this retracement is complete, we expect price to resume downwards movement for another break of 1.3700 en route to 1.3640. The first level of interest that could provide resistance is located at 1.3745.

Fundamental Outlook

The greenback will be affected today by the release of the US Building Permits, an indicator which shows changes in the annualized number of permits issued during the preceding month. An increase suggests a thriving economy, considering that houses are usually built in times of good economic conditions. The release is scheduled at 12:30 pm GMT and the estimated number is 1.01M compared to the previous 1.0M.


The last important indicator of the week comes out at 1:55 pm GMT: the US Consumer Sentiment. This is a survey which acts as a leading indicator of consumer spending and has the ability to strengthen the US Dollar if better numbers than the anticipated 84.7 are posted.

GBP/USD

The bears unsuccessfully attempted yesterday to break the support at 1.6750 but the bulls managed to finish the day higher, on the back of US Dollar weakness.

Technical Outlook

Yesterday’s bullish move can be seen as a retracement in a short term downtrend but from a Daily chart perspective, we are still in an uptrend and the pair just touched the uptrend line drawn from November last year. In other words, the picture is not clear and different time frame charts say different things. What is certain is that support is still holding at the moment and the confluence zone created by the uptrend line and 1.6750 will be tough to break but if price moves below it, the bears will score a major victory.

Fundamental Outlook

The Pound has a calm day ahead as no major indicators are released by the United Kingdom; price direction will be influenced by the technical aspect and by the US events.

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

Written by: Bogdan Giulvezan

 

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FOREX NEWS: WEIDMANN’S SPEECH – THE SINGLE HIGHLIGHT OF THE DAY

EUR/USD

Forex News: Friday price moved in a small range and neither bulls nor bears managed to make a clear statement of power. US economic data was mixed but it didn’t have a major impact on the pair.

Technical Outlook

Lately the pair is moving above and below 1.3700 but if the bulls will manage to reverse the short term downtrend seen last week, the minor resistance that was created at 1.3730 will be the first barrier they need to break. To the south, first support sits at 1.3640 but the chances for it to be broken today are slim, considering the fact that usually Mondays are slow days, especially if no major economic data is released.

Fundamental Outlook

The only event which can trigger strong movement today is the speech of German Bundesbank President Weidmann which is scheduled at 7:00 am GMT. He will speak at a Symposium organized in Frankfurt and if he reveals hints about the ECB’s next move, the market will react strongly as he is believed to be one of the most influential members of the ECB Governing Council.

GBP/USD

The last day of the previous week was almost entirely controlled by the bulls and price traveled to touch the resistance at 1.6820. A disappointing figure for the US Consumer Sentiment played an important role in Friday’s climb.

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Technical Outlook

The pair finished the week right on 1.6820 level but for the moment we cannot know for sure if this was due to price resistance or simply because the trading week ended and the market closed. This question will probably be answered today and we will see if 1.6820 has turned into resistance or if price will continue towards 1.6880. To the downside, 1.6750 remains strong support for the time being.

Fundamental Outlook

We expect slow price action today since there are no important American or British economic releases, but maybe Weidmann’s speech will have a ripple effect which will influence this pair as well.

Written by: Bogdan Giulvezan

 

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FOREX NEWS: INFLATION-RELATED INDICATORS INCREASE VOLATILITY

EUR/USD

Forex News: Trading was rather slow yesterday, with the Euro climbing steadily throughout the day. Bundesbank President Weidmann said that ECB will be closely watching Forex rates before making a policy decision but the comment was mostly overlooked by market participants.

Technical Outlook

The resistance at 1.3730 wasn’t broken decisively yesterday but some bullish pressure can be seen. We consider this latest move up just a retracement and we expect today another attempt at breaking 1.3700. If price moves below this level, the immediate target is located at 1.3650 but a bounce higher would signify that bears are starting to run out of steam and that more bullish action will follow.

Fundamental Outlook

The German Producer Price Index is released today at 6:00 am GMT and expected to increase from the previous -0.3% to 0.0. Changes in the price charged by producers for their goods and services will be have an influence on the price paid by consumers for those goods and services; in other words, the PPI affects inflation and this makes it an important indicator which can strengthen the Euro if higher values are posted.

GBP/USD

Some Pound strength was seen yesterday and the pair moved above 1.6820 as a result, but the bulls didn’t make any substantial advances and we had a small high-to-low range.

Technical Outlook

If the pair continues upwards, the first resistance is located at 1.6880 but by the time price gets there, the Relative Strength Index may reach an overbought condition, thus increasing the chances of a bounce lower. To the south, major support is located at 1.6750 but the fundamental aspect will play a major role today and will most likely decide direction.

Fundamental Outlook

At 8:30 am GMT, United Kingdom will release the CPI which is the main gauge of inflation and plays a big role in Bank of England’s decision regarding interest rates. A higher value is considered bullish for the Pound while a lower one may drag the currency lower; today’s estimated value is 1.7%, an increase from the previous 1.6%.


Written by: Bogdan Giulvezan

 

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FOREX NEWS: FED AND BOE RELEASE MEETING MINUTES – STRONGER MOVES EXPECTED

EUR/USD

Forex News: The German Producer Price Index showed a decrease and this largely contributed to bearish movement seen throughout the first part of yesterday’s trading session. However, the Euro recovered some of the early losses during the second part of the day.

Technical Outlook

The market is governed by indecision at the moment but bearish pressure is present to some extent, although movement lacks strength and direction is changed many times. Yesterday’s price action was slow and this makes an accurate technical prediction more difficult but we notice the fact that the resistance located at 1.3730 is still holding and the day’s main move was bearish. Until a clean break of 1.3700 support or 1.3730 minor resistance occurs, the picture remains uncertain.

Fundamental Outlook

The FOMC will release today at 6:00 pm GMT the Meeting Minutes, containing details about their latest meeting and insights into the reasons which influenced their monetary policy decision. Any hints about future interest rates or monetary easing will trigger sharp movement and hopefully will take the pair out of the state of indecision seen lately.

GBP/USD

Yesterday the Pound was heavily affected by the Consumer Price Index which showed an increase from the previous 1.6% to 1.8%, surpassing the estimated 1.7% and generating a bullish trading session.

Technical Outlook

Overall the pair had movement which was difficult to trade, mostly because after the first surge generated by the CPI release, price dropped sharply, wiping out some of the Pound’s gains and probably a lot of stop loss orders as well. Nevertheless, price is still trading above 1.6820 and the next target is 1.6880 where a bounce-or-break scenario will unfold. Support sits at 1.6820, followed by 1.6750.

Fundamental Outlook

The main event for the Pound will be the release of United Kingdom’s Retail Sales scheduled at 8:30 am GMT. The estimated value is 0.4% compared with the previous 0.1% and better figures strengthen the Pound as they suggest increased economic activity. At the same time the BoE Meeting Minutes come out, containing a breakdown of the MPC members’ votes on the interest rate. Depending on how members voted, traders can assess the Bank’s stance regarding the interest rate and can speculate on future rate values.

Written by: Bogdan Giulvezan