Technical News | GDMFX Brokerage

[pasfx]

FOREX NEWS: A FULL DAY AHEAD – VOLATILITY IS LIKELY TO REMAIN HIGH

EUR/USD

Forex News: Yesterday the pair finally decided to move with some determination and as a result, the level of 1.3700 was broken decisively. Volatility increased and hopefully it will remain this way.

Technical Outlook

The break of 1.3700 and the fact that price touched 1.3650 make the picture bearish once again, but for the short term downtrend to be renewed, we need to see a clear break of 1.3650 support. If this occurs, the next hurdle is located at 1.3560, followed by 1.3480. Medium term movement seems to favor bears more and more but we expect bullish price action once the Relative Strength Index moves below its 30 level.

Fundamental Outlook

The French and German Manufacturing PMIs are released today at 7:00 am GMT and 7:30 am GMT respectively. Both are surveys which ask purchasing managers to rate the current and future business conditions and are leading indicators or economic health; better than estimated values usually strengthen the Euro. The consensus for the French PMI is 51.1 while the German PMI has an anticipated value of 54.0.

At 2:00 pm GMT the US Existing Home Sales will be released, offering insights into the American house market. Although this is regarded as a high impact indicator, its effect can be mild at times, mostly depending on the difference between the expected value and the actual one. Today an increase is forecast, from the previous 4.59M to 4.71M.

GBP/USD

The Pound strengthened substantially on renewed speculation that a rate increase might occur in the near future and on the back of a much better than expected value of the Retail Sales (forecast 0.4%, actual 1.3%).

Technical Outlook

After the initial bullish impulse generated by the things mentioned above, the pair’s momentum started to fade away and price retraced lower. Immediately after the resistance at 1.6920 was touched, price reacted and this increases the importance of this level for short term movement; if 1.6920 resistance is broken, the door for a touch of 1.6996 is open and the uptrend may be renewed. For the time being, the most important support is located at 1.6820.

Fundamental Outlook

United Kingdom’s Gross Domestic Product is announced today at 8:30 am GMT but is expected to remain unchanged from the current 0.8%; if this is the case, the release will have a mild impact but any changes can generate strong moves because the GDP is an economy’s main performance gauge.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ALL EYES ON THE GERMAN BUSINESS CLIMATE, THE WEEK’S FINAL MARKET MOVER

EUR/USD

Forex News: Both the French and German Manufacturing PMIs showed disappointing values yesterday, lower than forecast and previous figures, generating a bearish day. The US data didn’t surprise in any way and was mostly overlooked by the market.

Technical Outlook

Although the day was almost entirely controlled by the bears, the support located at 1.3650 was not clearly broken and this means there is still chance of a bullish rally today. A break of the mentioned level would solidify the bears’ dominance and would probably take the pair into 1.3560 support but such a move might be too much for a single day. To the north, resistance is located at 1.3700.

Fundamental Outlook


The first event of the day is the release of the German Ifo Business climate, a survey with a large sample (7,000 businesses), focused on expectations for the next six months and also on the current business conditions. The time of the release is 8:00 am GMT and the expected figure is 111.0, a small decrease from the previous 111.2. The impact varies depending on the numbers posted but usually a higher value strengthens the Euro. Later in the day, at 2:00 pm GMT the US New Home Sales numbers are released and expected to increase substantially from last month’s 384K to 426K. More homes sold suggest a thriving economy and thus, can have a positive effect on the US Dollar.

GBP/USD

United Kingdom’s Gross Domestic Product matched analysts’ expectations and remained unchanged at 0.8%, a fact which was perceived as bearish for the Pound, taking the pair below 1.6880.

Technical Outlook

Yesterday price touched for the second time the resistance located at 1.6920 and immediately bounced lower, below 1.6880. This shows that bears have underlying power and that 1.6820 might be the pair’s next target. However, we must keep in mind the fact that form a long term perspective, the pair is in an uptrend, so a touch of the mentioned support will most likely trigger a move higher.

Fundamental Outlook

The United Kingdom didn’t schedule any major news releases today so price action will be mainly affected by the US 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

 

[pasfx]

FOREX NEWS: BANK HOLIDAYS INCREASE THE CHANCES OF SLOW PRICE ACTION

EUR/USD

Forex News: A weaker than forecast value of the German Ifo Business Climate combined with an increased number of New Home Sales in the United States created bearish price action Friday and took the pair below 1.3650 support.

​

Technical Outlook

The European Parliamentary Elections which took place Sunday are likely to influence today’s price behavior but the direction or the extent of their impact is hard to determine. The Relative Strength Index on a Daily chart is showing a mildly oversold condition and this increases the chance of moves north. If this is the case, 1.3650 will most likely act as resistance, followed by 1.3700.

Fundamental Outlook

Today US Banks will be closed due to Memorial Day and no economic data will be released. As for the Euro, the only event that can affect it is the speech of ECB President Mario Draghi. He is scheduled to speak at 8:00 am GMT in Portugal, at the European Central Bank Forum. Strong moves will be generated, especially if the President will speak about ECB’s next step regarding monetary policy.

GBP/USD

Both Thursday and Friday were bearish days and we saw the pair drop all the way from 1.6920 to 1.6820. Price traveled without whipsaws until it finally reached support and volatility subsided due to the end of the trading week.

Technical Outlook

Price showed some rejection off 1.6820 support but it looks like the bulls’ strength starts to fade away from a medium term perspective (four hour chart). The Relative Strength Index is not indicating an oversold condition so a break of 1.6820 is possible today but on the other hand, we might experience a slow day due to lack of economic releases.

Fundamental Outlook

Banks in the United Kingdom will be closed today, celebrating Spring Bank Holiday; no economic releases are scheduled for the Pound. Volatility might be thin and irregular movement is a distinct possibility.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ACTION PICKS UP, BACKED BY ECONOMIC RELEASES

EUR/USD

Forex News: Volatility for the EUR/USD pair is dropping to almost record lows, making price action slow and choppy. Yesterday US Banks were closed, contributing to the type of movement we mentioned above, but overall we had a bullish day.

Technical Outlook

The pair rallied yesterday to touch 1.3650 but we consider this to be just a retracement generated by the oversold condition of the Relative Strength Index (Daily and four hour chart) and we believe that price cannot continue much higher. The first hurdle for the bears to overcome is the minor support created at 1.3615 while 1.3650 still holds as resistance, followed by 1.3700.

Fundamental Outlook

The United States will announce their Durable Goods Orders today at 12:30 pm GMT and the forecast is a major drop from the previous 2.9% to -0.5%. Such a drop, or any lower value, would indicate a slowdown of manufacturing activity and would weaken the US Dollar. At 2:00 pm GMT the US Consumer Confidence will be released, with an increase anticipated: 83.2 from the previous 82.3. Confidence among consumers is often an indication of future consumer spending and better than anticipated numbers usually strengthen the US Dollar.

GBP/USD

The pair also had a very narrow range yesterday, mostly due to the fact that both U.S. and British Banks were closed. Bulls controlled the day but no special developments took place.

Technical Outlook

Yesterday’s slow price action doesn’t offer a lot of clues regarding future direction but for the time being, the support at 1.6820 is still holding and the rejection seen here can easily take price into 1.6880 resistance once again. A break of 1.6820 would open the door for a touch of 1.6750 and maybe a full scale reversal of the long term uptrend.

Fundamental Outlook

The British Bankers’ Association will announce today at 8:30 am GMT the Mortgage Approvals (previous 45.9K; estimated 45.2K). This is a leading indicator of house market demand because normally a house is purchased with the help of a mortgage; also, houses are usually purchased in times of economic expansion so higher numbers for today’s release are beneficial for the Pound.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BEARS GAIN STRENGTH. SUPPORT LEVELS THREATENED

EUR/USD

Forex News: The pair experienced a bearish day as the US Dollar strengthened on the back of a better than anticipated value of the US Durable Goods Orders and as a result the minor support we mentioned yesterday (1.3615) was touched again.

Technical Outlook

Although we saw yesterday a stronger move compared with the previous days, the pair is still moving slower than normal and it looks like traders are waiting for a determining factor which will trigger sharper drops or rallies. Of immediate interest remains 1.3615, followed by 1.3560 (visible on a Daily chart) as support while resistance is located at 1.3650.

Fundamental Outlook

We have a rather slow day ahead, with the only noteworthy economic release being the German Unemployment Change scheduled at 7:55 am GMT and expected to increase from -25K to -14K. Increasing unemployment levels suggest that economy might be contracting and usually this affects negatively the Euro, driving the pair lower.

GBP/USD

British Mortgage Approval numbers fell during the previous month as yesterday’s indicator showed and this fact, combined with an increased number of US Durable Goods Orders, generated a sharp drop for the pair.

Technical Outlook

Following a perfect bounce off 1.6880 resistance, price dropped through 1.6820 support and we consider the next target to be 1.6750. Keep in mind that the Relative Strength Index is rapidly approaching its 30 level which suggests an oversold condition so we believe 1.6750 will not be broken in the first attempt, especially if at the time of the touch, the mentioned oversold condition is present.

Fundamental Outlook

The United Kingdom didn’t schedule any major news releases for today so price action will be mainly influenced by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FOCUS SHIFTS ON THE UNITED STATES AS EUROPEAN BANKS TAKE A BREAK

EUR/USD

Forex News: German Unemployment rose during the previous month as shown by yesterday’s release, helping the bears to break 1.3615 minor support. Almost the entire day was controlled by sellers and it seems like the bulls’ power is waning almost completely.

Technical Outlook

The Euro is weakened lately by disappointing economic data and by speculation that ECB might cut rates on their next meeting; all this tilts the balance in favor of the bears and we consider that further downside movement is in order. The first support and target for the pair is 1.3560 and we consider it can be touched today but a lot depends on the US data that is due for release.

Fundamental Outlook

German and French banks are closed today due to Ascension Day so European economic releases will lack completely. However, an important US event takes place: the release of the Preliminary Gross Domestic Product which usually has a hefty impact on the US Dollar and can strengthen it if better values are posted. The event is scheduled at 12:30 pm GMT and the expected figure is -0.6%, a decrease from the previous 0.1%. At 2:00 pm GMT the US Pending Home Sales are announced and expected to decrease from 3.4% to 1.1%; if this decrease comes true, the US Dollar will suffer because the housing market is an important part of the US economy.

GBP/USD

The Pound was affected yesterday by speculation that an interest rate hike is still far away but the technical aspect also played an important role in the sharp drop which broke through support.

Technical Outlook

The bears dominate medium and short term momentum and extended moves to the downside have a high chance of happening. Nonetheless, we must pay attention to the oversold condition showed by the Relative Strength Index and must be wary of retracements higher which are likely to occur after such a sharp drop as the one experienced yesterday. With that in mind, our bias is negative and we anticipate a touch of 1.6680 support while the previous important support (1.6750) might turn into resistance.

Fundamental Outlook

Today is another day which lacks important economic releases for the Pound so price direction will be influenced by the US events and by the technical aspect.

Written by: Bogdan Giulvezan

 

[agusfx]

FOREX NEWS: AN INCREASED CHANCE OF RETRACEMENTS BUT OVERALL BIAS REMAINS NEGATIVE

EUR/USD

Forex News: The American Gross Domestic Product showed economic slowdown by posting yesterday a value of -1.0%, lower than analysts’ forecast and lower than the previous value. This damped the market’s appetite for the US Dollar and bearish movement came to a stop.

Technical Outlook

Although the Dollar was negatively affected by the GDP release, the bulls didn’t manage to make substantial advances and 1.3615 wasn’t broken to the upside. The pair moved slow yesterday, in a 40 pip range, a fact which doesn’t offer a lot of hints about future direction, but since the bulls couldn’t break 1.3615 even if disappointing data came out for the greenback, the pair will most likely resume downwards movement, making another attempt to touch 1.3560.

Fundamental Outlook

Early at 6:00 am GMT the German Retail Sales come out with an anticipated change of 0.4% compared with last month’s -0.7%. Sales made at a retail level represent the major part of overall German consumer spending and higher values usually strengthen the Euro.

GBP/USD

The bears’ momentum was hindered by disappointing US data and as a result, yesterday’s price action was mixed, with some reversals which were difficult to trade, especially on the lower time frames.

Technical Outlook

The break of 1.6750 that occurred two days ago tipped the balance of power clearly in favor of the bears and today or in the days to come we are likely to see more downside movement. The Relative Strength Index is still in oversold territory and this increases the chances of bullish movement but a touch of 1.6680 is very possible.

Fundamental Outlook

The entire week has been slow in terms of economic releases for the Pound and today is no exception as no indicators are released. Price action will be mainly affected by the technical aspect of the market.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INFLATION AND MANUFACTURING DATA IN THE SPOTLIGHT

EUR/USD

Forex News: Friday the bulls made their presence known by taking the pair into 1.3650 resistance. The move was mostly triggered by technical reasons, backed by market indecision due to the approaching of the ECB rate decision.

Technical Outlook

For the last couple of weeks the pair’s movement has been sluggish and low volatility was present. The move north seen Friday is not considered an attempt of the bulls to take control of the pair, but rather just a normal retracement in a slow downtrend. If the pair travels above 1.3700, it would signify that bulls still have underlying power and would open the door for further upside movement, but until that happens, the medium term downtrend is intact and we are likely to see a touch of 1.3585.

Fundamental Outlook

Germany will announce today at 12:00 pm GMT their Consumer Price Index. The CPI is the prime measurement of inflation and for today’s release a change of 0.1% is anticipated, while the previous value was -0.2%. Higher German inflation is considered beneficial for the entire Euro Zone and hence, for the single currency itself. At 2:00 pm GMT the US Manufacturing PMI is released and the anticipated value is 55.7, compared with the previous 54.9. Better numbers suggest optimism among purchasing managers from the manufacturing sector and usually boost the greenback.

GBP/USD

The pair retraced higher Friday but the move was not generated by surprise announcements or by economic data and instead we attribute it to technical reasons.

Technical Outlook

The oversold condition of the Relative Strength Index signaled in advance a possible bullish move and now price is sitting above the important 1.6750 level. If the bears can manage to take the pair quickly back below this level, the chance of an encounter with 1.6680 support will increase. Otherwise, we are likely to see a touch of 1.6820 in the near future.

Fundamental Outlook

United Kingdom’s Manufacturing PMI is released today at 8:30 am GMT and expected to decrease almost insignificantly from the previous 57.3 to 57.1. A bigger decrease than expected would negatively affect the Pound and would allow the pair to travel south. The US indicator mentioned earlier will have a direct impact on the pair as well.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INFLATION DATA CLOSELY WATCHED AS THE ECB RATE DECISION APPROACHES

EUR/USD

Forex News: The Euro was affected yesterday by a worse than expected German Consumer Price Index while the US Dollar benefited from a slightly better Manufacturing PMI, facts which triggered a slow but bearish day.

Technical Outlook

For the time being 1.3650 resistance is holding as seen from yesterday’s bounce lower. The pair continues to have a small range but we are still favoring moves to the downside and a break of 1.3585 en route to 1.3560. It seems like market participants are waiting for the ECB decision regarding the Interest Rate and maybe until it is released, we will not see strong, unidirectional movement.

Fundamental Outlook

Euro Zone’s Consumer Price Index is released today at 09:00 am GMT and it could be the only reason for increased volatility. As mentioned on other occasions, the ECB is closely watching inflation levels as they are highly correlated with the Interest Rate decision. Today’s forecast is 0.7%, no change from the previous value but a higher number will most likely be beneficial for the Euro.

GBP/USD

United Kingdom’s Manufacturing PMI showed a value that came close to analysts’ forecast and the impact on the pair was light but price traveled below 1.6750 nonetheless.

Technical Outlook

Yesterday’s price action was sluggish but some bearish pressure can be seen through the fact that 1.6750 was broken again. This shows that bulls cannot sustain higher prices and that bears might continue downwards price action, with the first target being 1.6680. However, today’s direction might be affected more than usual by British economic data.

Fundamental Outlook

At 8:30 am GMT the British Construction PMI is announced and it’s expected to increase from 60.8 to 61.2. The indicator is based on the opinion of about 170 purchasing managers from the Construction sector and acts as a leading sign of optimism and economic health so better than expected numbers are beneficial for the Pound.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: PRICE CONFINED IN A TIGHT RANGE. BREAKOUTS ARE EXPECTED

EUR/USD

Forex News: The pair bounced between support and resistance yesterday, following a lower than expected Euro Zone Consumer Price Index value. The session was mostly dominated by the bulls but for the time being, speculation about the ECB decision has a high impact on the market.

Technical Outlook

The support at 1.3585 is still holding and the same is true for the resistance at 1.3650 as we are experiencing the almost perfect example of a ranging market. Even if support or resistance is broken today, an extended move in the direction of the break has a low probability of occurring as traders seem reticent to commit to either side of the market. The economic data released throughout the day will most likely have a hefty impact.

Fundamental Outlook

Today is the first day of the G7 Meetings which are attended by central bankers and finance ministers from the member states. Depending on the matters discussed (which include the Russian – Ukrainian crisis), increased volatility is likely to be present. At 12:30 pm GMT the ADP Non Farm Employment Change is released, showing changes in employment numbers. The report is released by a privately owned company and tries to mimic the Government issued data which comes out 2 days later. The estimated figure is 217K while the previous number is 220K and usually, higher values are beneficial for the US Dollar.

GBP/USD

United Kingdom’s Construction PMI showed a disappointing value yesterday and reversed an early rally which took price above 1.6750 resistance.

Technical Outlook

Price is hugging the level of 1.6750 and movement is slow, especially for a major pair. This price action holds no clues for future direction and the same applies to the Relative Strength Index which is moving sideways. Of immediate interest is the current level of 1.6750 and probably the first strong move away from it will dictate the next short term direction.

Fundamental Outlook

At 8:30 am GMT the United Kingdom releases the Services PMI which is a leading indicator of economic health focused on the services sector and based on the opinions of purchasing managers. The expected value is 58.3, a decrease from the previous 58.7 and higher values usually strengthen the Pound. As always, the US events will have a direct impact on the pair.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A CRUCIAL DAY FOR THE SHARED CURRENCY: ECB EXPECTED TO CUT THE INTEREST RATE

EUR/USD

Forex News: The market lacked direction yesterday on the back of mixed economic data released by the United States and as a result neither 1.3650 nor 1.3585 was broken. Trading was difficult on the lower time frames and a lot of direction changes took place.

Technical Outlook


Indecision still governs the pair’s movement and market participants are holding back, waiting for today’s ECB decision regarding the Interest Rate. The major levels to watch are 1.3650 as resistance and 1.3560 as support, followed by 1.3480. Today’s direction will be highly affected by the event mentioned above and the technical side of the market will be secondary.

Fundamental Outlook

Without a doubt the day’s main event is the ECB interest rate decision which is scheduled at 11:45 am GMT and the Press Conference that follows 45 minutes later. The rate is expected to drop from 0.25% to 0.10%, a fact which will most likely be perceived as bearish for the single currency and will generate a huge fall. During the Press Conference, Mario Draghi’s attitude will be closely watched by market participants and his answers to the journalists’ questions will most likely trigger additional movement.

GBP/USD

United Kingdom’s Services PMI released yesterday showed a value very close to analysts’ forecast but the impact favored the bulls who managed to reverse a previous drop and to take the pair into 1.6750 once more.

Technical Outlook

If the pair is going to continue the ranging movement, we are likely to see another bearish move which will encounter support at 1.6700 and at 1.6680. Yesterday’s break above 1.6750 couldn’t be continued by bulls so neither side of the market is in clear control. Today’s fundamental scene will play a very important role and will overshadow the technical aspect.

Fundamental Outlook

At 11:00 am GMT the Bank of England will announce their Interest Rate but no change is expected from the current 0.50%. A surprise change is not likely and this means that volatility will be increased just briefly. However, whipsaws can occur so we recommend caution if trading at the time.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ECB CUTS RATES. FOCUS SHIFTS ON THE US NON FARM PAYROLLS

EUR/USD

Forex News: The ECB decided yesterday to cut the interest rate to 0.15% and made a historical move by becoming the first central bank to introduce a negative deposit rate of -0.10%. Following a sharp drop which touched 1.3500 zone, the Euro erased losses and traveled the entire distance back up.

Technical Outlook

The pair’s reaction to the ECB decision is surprising and some analysts speculate that Euro dropped too far, too fast and this fact triggered the consequent move up. However, this is just speculation and the fact remains that ECB introduced a negative deposit rate and dropped the interest rate to 0.15%; these factors are likely to weaken the Euro during the next period and the first lower target is 1.3560 followed by the lowest point reached yesterday: 1.3502.

Fundamental Outlook

The day’s main event is the release of the US Non Farm Employment Change which is considered the most important report regarding job creation in the United States. The impact on the market is a huge one almost always, because employment levels are highly correlated with consumer spending which represents a major part of overall economic activity. The release is scheduled at 12:30 pm GMT and a drop is forecast, from the previous 288K to 212K.

GBP/USD

Bank of England left the Interest Rate unchanged, as expected and overall we experienced a bullish day although price made an attempt to break 1.6750 to the downside but failed.

Technical Outlook

The bulls are starting to shift the balance of power in their favor and 1.6820 seems to be the first upside target. On an hourly chart the Relative Strength Index is approaching overbought territory, a thing which increases the chance of bearish moves but does not nullify the possibility of a break of resistance. Support remains strong at 1.6750.

Fundamental Outlook

The United Kingdom has a slow day ahead in terms of economic data but the US employment report will have a hefty impact on the pair and we expect strong movement to be generated by its release.

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

Written by: Bogdan Giulvezan

 

[agusfx]

Forex News: Irregular price action as economic releases lack almost completely

EUR/USD

Forex News: Friday was a day characterized by another major whipsaw experienced at the time of the Non Farm Payrolls release. The number of new jobs was close to what analysts had forecast but the market had a mixed reaction.

Technical Outlook

The bullish impulse was reversed in close vicinity of the resistance located at 1.3680 and a big four hour pin bar was printed. This type of candle indicates rejection and a potential move lower which will encounter the first support at 1.3585. A move above 1.3680 will nullify the effect of the pin bar and will make 1.3730 the first target. Considering the latest movement, our current bias is neutral until further developments.

Fundamental Outlook

Today French and German Banks are closed in observance of Whit Monday, a fact that will potentially generate irregular volatility and sluggish price action. On top of that, no US economic data is released so the chances of a slow Monday are increased.

GBP/USD

The Non Farm Payrolls release had a similar impact on the Cable and we saw a move up, countered immediately by the bears; at the moment price is sitting below resistance.

Technical Outlook

For the time being the level of 1.6820 is offering good resistance and rejects all bullish moves. The Relative Strength Index is close to the 70 level and further bullish movement will probably take it into overbought, thus increasing the chances of a move south. If price doesn’t manage to break this level today, we are likely to see a shift of power towards the bears, with 1.6750 support being the next destination.

Fundamental Outlook

The United Kingdom didn’t schedule any major news releases for today so price action will be mostly driven by the technical aspect of the market.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BEARS ATTEMPTING TO DRAG BOTH PAIRS LOWER

EUR/USD

Forex News: The bears stepped in with conviction yesterday and managed to take the pair into 1.3585 support. Major economic releases lacked but price had unidirectional movement for almost the entire day.

Technical Outlook

It looks like the mixed reaction caused by last week’s ECB decision is starting to wear off and the market is finally choosing a direction. Of immediate importance is the support at 1.3585 which is still not broken decisively and until that happens, the probability of upside moves remains high. The support at 1.3560 is still active but its importance is diminished as recent price action has been influenced more by 1.3585 and 1.3500. The latter is also the next target once the current level is broken.

Fundamental Outlook

The French Industrial Production numbers are released today at 6:45 am GMT and expected to increase from the previous -0.7% to 0.3%. The indicator tracks changes in the total value of output produced by the industrial sector during the analyzed month and higher numbers suggest economic expansion, thus strengthening the Euro. However, the impact is mild, especially if the real value is close to analysts’ forecast.

GBP/USD

The bulls made another attempt yesterday to break 1.6820 but failed and as a result the rest of the day was controlled by the bears.

Technical Outlook

Lately the pair is trading almost sideways, in close vicinity to 1.6820 resistance and the bulls lack the determination needed to break this level. Considering this, our bias is slightly negative, anticipating a move south that will touch 1.6750 but a lot depends on the economic data released today by the United Kingdom.

Fundamental Outlook

At 8:30 am GMT the UK Manufacturing Production is released and anticipated to decrease slightly from last month’s 0.5% to 0.4%. Since manufacturing is an important part of Great Britain’s economic activity, better numbers can strengthen the Pound and the opposite is true for lower numbers. Later in the day, at 2:00 pm GMT, an estimate of the UK Gross Domestic Product is announced; the last estimate was 1.0% and values that surpass this figure will strengthen the Pound.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BEARS GAIN CONFIDENCE BUT BULLISH RETRACEMENTS ARE EXPECTED

EUR/USD

Forex News: The bears continued yesterday the momentum which started a day before and successfully broke the support located at 1.3585. The economic data released throughout the day was in line with analysts’ expectations but didn’t have a huge impact on price action.

Technical Outlook

The sellers are in control of the pair at the moment with both 1.3585 and 1.3560 being broken. Now the support at 1.3500 is the next lower target but on a four hour chart the Relative Strength Index is dangerously close to the 30 level which indicates an oversold condition. We expect retracements north which can encounter resistance at the two levels mentioned earlier (broken support may turn into resistance) and once the retracement is complete, bearish price action can resume.

Fundamental Outlook

The day ahead lacks important economic releases for both the Euro and the US Dollar so direction will be mainly influenced by the technical aspect of the market.

GBP/USD

United Kingdom’s Manufacturing output showed a figure which matched the forecast and the impact on the Pound wasn’t tremendous. However, mostly due to technical reasons, our predicted target of 1.6750 was reached yesterday.

Technical Outlook

The pair paused at 1.6750 support and we are now faced with another bounce-or-break scenario. The Relative Strength Index is not showing an extreme reading so it doesn’t help a lot in predicting if we will see a break or a bounce; the next levels of interest are 1.6700 to the downside and 1.6820 to the upside but the Pound’s direction will depend a lot on the unemployment data released today.

Fundamental Outlook

AT 8:30 am GMT the Claimant Count Change will be announced by the UK Office for National Statistics. The indicator shows the change in the number of unemployed people who asked for social help during the previous month and usually higher numbers indicate that economic activity has decreased. Today’s forecast is -25.0K, almost unchanged from last month’s -25.1K and the Pound will be weakened if numbers above the forecast are shown.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US DATA IN THE SPOTLIGHT

EUR/USD

Forex News: Yesterday’s trading direction was mostly affected by the disappointing value of the US Retail Sales which weakened the greenback and allowed the pair to climb. The high-to-low range was small however and it seems like the pair cannot regain its normal volatility.

Technical Outlook

The climb seen yesterday took the Relative Strength Index away from oversold, opening the door for a resumption of bearish movement. A good place where price can start to move south is represented by the resistance at 1.3585, assuming the current level of 1.3560 is broken. A move above 1.3585 would tip the scales in favor of the bulls.

Fundamental Outlook

The US Producer Price Index is released today at 12:30 pm GMT, showing the change in prices charged by producers as compared to the previous month. The forecast is for a drop from 0.6% to 0.1%, a fact which would weaken the US Dollar.

The second important indicator of the day comes from the United States as well, in the form of the Consumer Sentiment, scheduled for release at 1:55 pm GMT. This is a survey of about 500 consumers, conducted by the University of Michigan and is often regarded as a leading indicator of consumer spending. The anticipated value is 83.2, an increase from the previous 81.9 and higher numbers are beneficial for the US Dollar.

GBP/USD

The effect of the American Retail Sales was seen on this pair as well and for almost the entire trading session the bulls were in control of price action.

Technical Outlook

The resistance at 1.6820 was broken on the back of US Dollar weakness and it seems like the bulls are making a run for 1.6880 which is the next resistance and immediate upper target. If this level will be reached, the Relative Strength Index will most likely move above its 70 level, signaling an overbought condition and increasing the chance of bearish moves. During the day, 1.6820 may act as support.

Fundamental Outlook

The United Kingdom doesn’t release today any major economic indicators and price direction will depend mostly on the US data and on the technical aspect.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EUROPEAN INFLATION DATA – THE DAY’S ONLY NOTABLE RELEASE

EUR/USD

Forex News: Friday bearish movement resumed but price action was not very fast or volatile; however, the pair traveled below 1.3560 and the Euro continued to weaken.

Technical Outlook

Recent price action created minor support at 1.3520 and this will be the first barrier in front of further downside movement but the bearish momentum seems to slow down lately, a fact which signifies that the pair might re-visit 1.3560 resistance. The Relative Strength Index doesn’t show an extreme reading and it’s rather neutral but Eurozone’s CPI is release today and this can be a deciding factor for the day’s direction.

Fundamental Outlook

At 9:00 am GMT the European Consumer Price Index is announced and anticipated to remain unchanged at 0.5%. Inflation is still a concerning matter and lower values will most likely weaken the Euro, considering the fact that ECB’s inflation target is just below 2.0% and the current CPI is far from this target.

GBP/USD

Bank of England Governor Mark Carney commented that a rate hike may be discussed sooner than anticipated, a fact which triggered enormous Pound strength and took the pair into the year’s high.

]

Technical Outlook

Price came within a few pips of a multi-year’s high located at 1.6996, putting the bulls in clear control of the pair. However, this control could be lost if 1.6996 (1.7000) is not broken during the next days and we must note the severe overbought condition signaled by the Relative Strength Index on a four hour chart. This increases the chance of a retracement lower which may find support at 1.6920.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today and price action will be mainly affected by technical factors.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EURO IN CONSOLIDATION PATTERN, POUND REACHES NEW HIGHS. ECONOMIC DATA DECIDES DIRECTION

EUR/USD

Forex News: The pair didn’t travel a substantial distance during yesterday’s trading session and 1.3560 resistance was re-visited. Euro Zone’s CPI came out with the anticipated value and the release didn’t create a lot of volatility.

Technical Outlook

The pair is in a consolidation zone between1.3585 and 1.3520 and a breakout is imminent. The medium term trend is bearish so there’s a higher probability of a break of support than of resistance. If 1.3520 is broken, the next important level is located at 1.3500 followed by 1.3480 while to the upside price will encounter resistance at 1.3650 if 1.3585 will be broken.

Fundamental Outlook

An important German survey is released today at 9:00 am GMT: the ZEW Economic Sentiment. This indicator is based on the opinions of about 275 German professional investors and analysts who are asked to rate the current and future economic conditions. The forecast is an increase from 33.1 to 35.2, a fact which would strengthen the Euro and drive the pair higher.

At 12:30 pm GMT the American Consumer Price Index is announced and expected to decrease from 0.3% to 0.2%, a fact which would be detrimental for the US Dollar since the CPI acts as the main gauge of inflation.

GBP/USD

The Pound continued to climb, fueled by speculation about a potential rate hike performed by the BoE and 1.7000 was breached as a result.

Technical Outlook

Immediately after piercing the multi-year top created at 1.6996, the pair returned below it, a fact which shows that resistance is still holding and it will take more than one attempt to break it. Also, the Relative Strength Index is starting to descend towards the 70 level, coming from overbought territory, a fact which favors the bears and increases the chance of a touch of 1.6920.

Fundamental Outlook

Price direction will be influenced today by the release of United Kingdom’s CPI which is scheduled at 8:30 am GMT. Inflation is anticipated to drop from the previous 1.8% to 1.7% and if analysts’ expectations come true or even lower numbers are posted, the Pound is likely to lose some steam. As always, the US events will have a direct impact on the pair’s direction.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FOMC RELEASES A CLUSTER OF MARKET-MOVING DATA

EUR/USD

Forex News: The pair failed to break free of the current consolidation pattern which governs price action despite the fact that German ZEW posted worse than expected values and the American CPI showed an increase.

Technical Outlook

Some US Dollar strength was seen yesterday at the time of the CPI release, making the pair bounce lower off the resistance located at 1.3585. The downtrend line seen in the picture above created a confluence zone but although all the ingredients for a break of support were present, the pair had a rather slow day. We expect the latest momentum to be continued today and the pair to break 1.3520 support, but a lot depends on the US events released in the second part of the day.

Fundamental Outlook

At 6:00 pm GMT the Federal Funds Rate (not expected to change from the current <0.25%) is announced within the FOMC Statement and will be followed half an hour by a Press Conference which will contain commentary regarding the monetary policy and possibly future rate direction. The FOMC will also release at 6:00 pm GMT their Economic Projections regarding inflation and economic conditions for the next two years. This cluster of events is likely to generate a lot of strong movement and we recommend caution if trading at the time.

GBP/USD

United Kingdom’s Consumer Price Index showed yesterday that inflation dropped more than analysts had forecast and this weakened the Pound. However, the losses incurred were almost immediately recovered, creating a major whipsaw on the lower time frames.

Technical Outlook

Although we saw yesterday some choppy price action, the resistance at 1.6996 is still holding and the Relative Strength Index is moving down, coming from overbought territory. These factors favor a move south, towards the potential support area located at 1.6920. A move above 1.7000 would invalidate the Double Top formation and would resume the uptrend, making 1.7040 the first target.

Fundamental Outlook

The Bank of England will announce today at 8:30 am GMT the breakdown of the MPC members’ votes regarding the latest interest rate decision. This is a good opportunity for traders to assess the stance of the BoE on the interest rate and to see if the MPC members have a difference of opinion. Later in the day, the pair will be directly affected by the US events mentioned above.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: THE CALM AFTER THE STORM?

EUR/USD

Forex News: The FOMC cluster of events generated huge volatility yesterday but unfortunately the price movement was almost untradeable at the time because of huge whipsaws and choppy up and down movement.

Technical Outlook

Yesterday’s price action holds absolutely no technical clues about future movement but the fact still remains that 1.3585 resistance couldn’t be broken decisively. This increases the chance of a bearish trend resumption but moves above the mentioned level will make 1.3680 the next potential target.

Fundamental Outlook


The Eurogroup Meetings start today and are attended by finance ministers of countries where Euro is the main currency; the President of the ECB will also participate and the discussions which will take place will have an impact on the Euro’s future direction. Later in the day, at 2:00 am GMT the Philly Fed Manufacturing Index is released, showing the opinions of about 250 manufacturers from the Philadelphia district regarding the current level of business conditions. The expected figure is 14.3, a decrease from the previous 15.4 and usually lower numbers are detrimental for the US Dollar.

GBP/USD

The pair was also highly affected by the US events but price action was slightly more docile than EUR/USD. We had another encounter with 1.6996 and a bounce off 1.6920 in what was a hectic trading session.

Technical Outlook

We saw yesterday a clear rejection at 1.6920 which has now turned into support, a fact which makes 1.6996 the next destination for the pair. At the moment the bullish momentum is renewed by the immediate bounce at support and it seems like the Pound is headed for new highs. A break of support would invalidate this scenario.

Fundamental Outlook

At 10:00 am GMT the CBI Industrial Order Expectations are announced and anticipated to rise from 0 to 3. The indicator is a survey that asks British manufacturers to rate the expected volume of orders during the next three months and usually expectations above 0 indicate optimism and strengthen the Pound.

Written by: Bogdan Giulvezan