Technical News | GDMFX Brokerage

[pasfx]

FOREX NEWS: HIGH PRICES CALL FOR A BEARISH RETRACEMENT

EUR/USD

Forex News: The pair broke resistance yesterday and almost the entire day was controlled by the bulls. The US Dollar weakened on Fed comments that interest rates will be kept at low levels for “considerable time”.

Technical Outlook

Despite the ECB’s decision to lower rates, the Euro is not weakening against the US Dollar and we are likely to see a touch of 1.3680 resistance now that 1.3585 is decisively broken. However, today we anticipate a move lower which will clear the overbought condition indicated by the Relative Strength Index. If this move occurs, 1.3585 will most likely turn into support.

Fundamental Outlook

The day lacks major economic events for both the Euro and the US Dollar but the ECOFIN Meetings take place and can generate strong moves, depending on the matters discussed.

GBP/USD

The CBI Industrial Order Expectations announced yesterday posted a much better than anticipated value and the Pound continued its climb, breaching 1.7040 resistance.

Technical Outlook

If the bulls can sustain such a high price, the only level of interest to the upside is yesterday’s high and other than that we are in “uncharted” territory as far as resistance is concerned because the pair didn’t surpass 1.7040 since 2009. The Pound shows tremendous strength but retracements are to be expected considering the extended bull-run and the overbought condition signaled by the Relative Strength Index on a four hour chart.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases but a noteworthy indicator is the Public Sector Net Borrowing announced at 8:30 am GMT and expected to increase from 9.6 billion to 11.8 billion. The indicator measures the level of debt held by the government and a negative number indicates a surplus, while a positive number suggests deficit; however, lower than anticipated values will be beneficial for the Pound.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: HIGH PRICES CALL FOR A BEARISH RETRACEMENT

EUR/USD

Forex News: The pair broke resistance yesterday and almost the entire day was controlled by the bulls. The US Dollar weakened on Fed comments that interest rates will be kept at low levels for “considerable time”.

Technical Outlook

Despite the ECB’s decision to lower rates, the Euro is not weakening against the US Dollar and we are likely to see a touch of 1.3680 resistance now that 1.3585 is decisively broken. However, today we anticipate a move lower which will clear the overbought condition indicated by the Relative Strength Index. If this move occurs, 1.3585 will most likely turn into support.

Fundamental Outlook

The day lacks major economic events for both the Euro and the US Dollar but the ECOFIN Meetings take place and can generate strong moves, depending on the matters discussed.

GBP/USD

The CBI Industrial Order Expectations announced yesterday posted a much better than anticipated value and the Pound continued its climb, breaching 1.7040 resistance.

Technical Outlook

If the bulls can sustain such a high price, the only level of interest to the upside is yesterday’s high and other than that we are in “uncharted” territory as far as resistance is concerned because the pair didn’t surpass 1.7040 since 2009. The Pound shows tremendous strength but retracements are to be expected considering the extended bull-run and the overbought condition signaled by the Relative Strength Index on a four hour chart.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases but a noteworthy indicator is the Public Sector Net Borrowing announced at 8:30 am GMT and expected to increase from 9.6 billion to 11.8 billion. The indicator measures the level of debt held by the government and a negative number indicates a surplus, while a positive number suggests deficit; however, lower than anticipated values will be beneficial for the Pound.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EUROPEAN MANUFACTURING AND US HOUSE-MARKET DATA AHEAD

EUR/USD

Forex News: The main trend Friday was bearish, partially generated by a light overbought state of the market. There were no important economic releases and price action was relatively smooth.

Technical Outlook

Price failed to finish the trading day below 1.3585 and the bulls have been showing some pressure lately, stopping the bearish momentum at 1.3520. However, neither bulls nor bears are in clear control and today’s direction will be determined by price behavior around the current level of interest (1.3585). A bearish break will make 1.3520 the next target while a bounce higher will most likely take the pair back into 1.3640 resistance zone.

Fundamental Outlook

At 7:00 am GMT the French Manufacturing PMI is announced but no change is expected from the previous value of 49.6; half an hour later the German Manufacturing PMI is released and expected to change from 52.3 to 52.7. Both are leading indicators of economic health based on the opinions of purchasing managers from the Manufacturing sector and higher numbers are usually beneficial for the Euro.

The United States will release at 2:00 pm GMT the Existing Home Sales numbers which are expected to increase from 4.65M to 4.74M. The indicator has a slightly greater importance than the New Home Sales (will be released a day after) because existing homes represent the majority of total sales. Higher numbers usually strengthen the US Dollar.

GBP/USD

Friday the pair retraced lower, a normal behavior, considering the extended move upwards and the overbought condition signaled by the Relative Strength Index; however, the bears didn’t manage to break important levels.

Technical Outlook

The move south seen Friday is considered just a retracement, not a reversal; a good place for price to start moving upwards again is 1.6996 which was previous resistance and now may become support. A bearish break of the mentioned level would indicate that high prices become harder and harder for bulls to sustain and would weaken the current uptrend, making 1.6920 the next medium-term destination. Resistance now sits at 1.7063.

Fundamental Outlook

The United Kingdom doesn’t release any major economic indicators today and price action will be mostly influenced by the technical aspect and by the US data mentioned above.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EURO CONFINED IN A RANGE, POUND WEAKENED BY DOVISH COMMENTS

EUR/USD

Forex News: The pair had another difficult to trade day as price first climbed and then dropped below the opening price on the back of better than expected US economic data. Currently the support at 1.3585 is being re-tested from above but the pair is in a ranging state.

Technical Outlook

Price action continues to trade sideways and all moves in one direction are quickly reversed. The current level of 1.3585 is important for short term movement and a break would open the door for additional sellers to enter the market and to take the pair into the more important support located at 1.3520. Minor resistance sits at 1.3640 – 1.3645 but the market is ranging and we are neutral until an important level is breached.

Fundamental Outlook

Two important US events represent today’s headlines: at 12:30 pm GMT the Durable Goods Orders are announced with a negative change anticipated, from the previous 0.6% to -0.1%. At the same time the Final version of the Gross Domestic is released and although its impact is lower than the Advance GDP, volatility can still be generated as the GDP is an economy’s main performance gauge. The expected change is -1.7%while the previous was -1.0%. Lower numbers for either indicator can determine a weakening of the US Dollar.

GBP/USD

The Pound weakened throughout the day against the US Dollar as Mark Carney showed a dovish attitude towards a potential rate hike and dampened any speculation that BOE will raise rates sooner than anticipated.

Technical Outlook

The potential support level at 1.6996 was easily broken yesterday on the back of Pound weakness generated by Carney’s comments and now it seems like the pair is headed for 1.6920 support. Before that happens, a re-test of 1.6996 is very probable. If this re-test is successful and price bounces lower, the chances of a reversal will increase and resistance will be located at 1.6996 once again. Throughout the day keep an eye for an oversold condition of the Relative Strength Index on the four-hour chart.

Fundamental Outlook

Today the United Kingdom doesn’t release any major economic data so price action will be mainly influenced by the technical side and by the US events mentioned above.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: CARNEY’S SPEECH – DOVISH OR HAWKISH?

EUR/USD

Forex News: The American currency weakened yesterday against its counterparts as disappointing values were posted for both the Durable Goods Orders and the Gross Domestic Product. As a result the pair touched resistance at 1.3640 and the day was controlled by the bulls.

Technical Outlook

The pair continues to move extremely slowly compared to its normal behavior and although yesterday the bulls showed clear signs of dominance, future direction is uncertain. The current level of resistance may push price lower or it may bring in more buyers if a break is recorded, so today’s price action revolves around a “bounce or break” scenario. Next resistance is located at 1.3680 while support sits at the uptrend line, followed by 1.3585.

Fundamental Outlook

Today lacks major announcements for both the Euro and the US Dollar and the pair’s direction will be mostly affected by technical factors.

GBP/USD

US Dollar weakness was seen against the Pound as well and the pair made a push for 1.6996. However, the bulls lacked the necessary strength to break resistance and price remained below it.

Technical Outlook

At the moment we are seeing rejection at 1.6996 (1.7000) resistance and it seems like the bulls failed to renew the uptrend. This suggests that moves lower may follow and that 1.6920 support might be the next destination. A climb above 1.7000 will invalidate this scenario but Mark Carney’s speech will be the day’s headline and will probably have a strong impact on price action.

Fundamental Outlook

AT 9:30 am GMT the Bank of England will release the Financial Stability Report which contains an assessment of potential risks to the current financial system and an in-depth analysis regarding financial stability in the UK. At the same time, BOE Governor Mark Carney will hold a press conference and will deliver a speech focused on the mentioned Report. His attitude will most likely have a great impact on the Pound and will be the day’s main market mover.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: GERMAN INFLATION NUMBERS MAY PUT AN END TO RANGING MOVEMENT

EUR/USD

Forex News: The US Dollar continued to weaken yesterday against its major counterparts and the Euro was no exception; after an unsuccessful attempt to break resistance, price moved south to touch 1.3585 support but finished the day above it.

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Technical Outlook

The pair is still ranging, without choosing a direction and this gives greater importance to the oversold condition of the Relative Strength Index and to the support located at 1.3585. We anticipate a bounce higher and a move back above the uptrend line but today’s important financial data will be the determining factor.

Fundamental Outlook

The main event of the day is the German Consumer Price Index which is released at 12:00 pm GMT and anticipated to change from the previous -0.1% to 0.2%, a fact which would be beneficial for the Euro as German inflation accounts for a big part of European inflation.

GBP/USD

Mark Carney’s speech regarding the Financial Stability Report was perceived as hawkish by market participants and the pair climbed yesterday above 1.7000.

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Technical Outlook

At the moment the pair looks like it’s making an attempt to touch 1.7063 once again. The Pound was strengthened by more speculation about a rate hike which may come before the end of the year and the greenback is weakened by a worse than expected GDP so things look bullish and we anticipate a touch of the mentioned level. First support is located at 1.6996 (1.7000), followed by 1.6920.

Fundamental Outlook

United Kingdom’s Final version of the Gross Domestic Product will be announced today at 8:30 am GMT. Although the Final version is the last and tends to have a milder impact on price action compared to the Advance version, we can still expect sharp moves at the time of the release, especially if the actual figure will differ from analysts’ prediction of 0.8%. Since this is the main gauge of an economy’s performance, higher values usually strengthen the Pound and the opposite is true for lower numbers.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US DOLLAR AFFECTED BY EMPLOYMENT DATA AND YELLEN’S SPEECH

EUR/USD

Forex News: The pair resumed its sideways movement and volatility lacked almost completely; the US Manufacturing PMI posted a value close to forecast and this added to the lack of direction.

Technical Outlook

Price came close to the recently broken level of 1.3675 but couldn’t break it or bounce off of it and instead the pair just stalled there. For today we still anticipate a continuation of the recent bullish move which may generate a touch of 1.3730, but the Relative Strength Index is still close to the 70 level which indicates an overbought condition and might hinder further advances. Support sits at 1.3675 followed by 1.3640.

Fundamental Outlook

Two important US events will shape today’s direction: at 12:15 pm GMT, Automatic Data Processing, a privately owned US company will release the Non Farm Employment Change. This report must not be mistaken for the Government-issued indicator which will be released tomorrow but its importance is still high because it offers an early look into the US employment situation. Better numbers than the anticipated 206K will most likely strengthen the US Dollar, taking the pair lower.

At 3:00 pm GMT, Fed Chair Janet Yellen will speak in Washington, DC at the International Monetary Fund. As always, her speeches can be a reason for increased volatility and sharp moves so we recommend caution if trading at the time.

GBP/USD

Yesterday’s main market mover was the British Manufacturing PMI which showed an unexpected increase and boosted demand for the Pound as investors perceived it as a sign that interest rates might rise sooner than expected.

Technical Outlook

The Pound is constantly breaking multi-year highs and the bulls are in total control of the pair. However, this doesn’t nullify the possibility of bearish retracements, especially considering the overbought condition indicated by the Relative Strength Index on a four-hour and on a Daily chart. If retracements occur, a good level where bullish movement may resume is 1.7095.

Fundamental Outlook

United Kingdom’s Construction PMI is released today at 8:30 am GMT and expected to decrease from last month’s 60.0 to 59.7. Construction is an important part of the United Kingdom’s economy and better than anticipated numbers can strengthen the currency but the impact is usually lower than the one of the Manufacturing PMI.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A HIGHLY VOLATILE DOUBLE-FEATURE: ECB PRESS CONFERENCE AND AMERICAN NFP

EUR/USD

Forex News: US Employment data released yesterday showed that job creation increased more than expected according to the privately owned company that put together the report. The US Dollar benefited and managed to gain against the Euro.

Technical Outlook


Currently the pair is testing the confluence zone created by the uptrend line and the support level at 1.3640 and the last push above 1.3675 wasn’t enough to bring in more buyers and to generate a continued bullish move. The main levels to watch remain 1.3730 as resistance and 1.3520 as support but today’s technical aspect will be overshadowed by the fundamentals.

Fundamental Outlook

The ECB Interest Rate will be announced at 11:45 am GMT but no change is expected and the main event of the day will be a double feature: the ECB Press Conference and the US Non Farm Employment Change. Both events take place at the same time, 12:30 pm GMT. Mario Draghi is likely to give traders more hints about future monetary policy during his speech at the Press Conference; as always, his attitude and answers to journalists’ questions will be closely watched by market participants and the Euro will be highly affected.

The US Non Farm Payrolls are usually released Friday but this time they are released a day earlier due to Independence Day which is celebrated tomorrow. The market is likely to move very strongly at the time so we recommend caution.

GBP/USD

The United Kingdom continues to post positive economic data and this was confirmed once more yesterday when the Construction PMI showed a better than expected value. As a result the Pound strengthened and posted a new high at 1.7176.

Technical Outlook

Although we had another bullish day, the momentum seems to fade away slowly and the Relative Strength Index starts to descend. Retracements are still anticipated but the fundamental scene is filled with important events which will highly influence price action. First potential support is located at 1.7140 while yesterday’s high is considered resistance.

Fundamental Outlook

At 8:30 am GMT the Services PMI is released but its impact is usually lower than the one of the other two indexes released Tuesday and Wednesday. However, higher values than the anticipated 58.1 can strengthen the Pound and take the pair higher. An extra importance will have the US employment numbers released later in the day.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A HIGHLY VOLATILE DOUBLE-FEATURE: ECB PRESS CONFERENCE AND AMERICAN NFP

EUR/USD

Forex News: US Employment data released yesterday showed that job creation increased more than expected according to the privately owned company that put together the report. The US Dollar benefited and managed to gain against the Euro.

Technical Outlook


Currently the pair is testing the confluence zone created by the uptrend line and the support level at 1.3640 and the last push above 1.3675 wasn’t enough to bring in more buyers and to generate a continued bullish move. The main levels to watch remain 1.3730 as resistance and 1.3520 as support but today’s technical aspect will be overshadowed by the fundamentals.

Fundamental Outlook

The ECB Interest Rate will be announced at 11:45 am GMT but no change is expected and the main event of the day will be a double feature: the ECB Press Conference and the US Non Farm Employment Change. Both events take place at the same time, 12:30 pm GMT. Mario Draghi is likely to give traders more hints about future monetary policy during his speech at the Press Conference; as always, his attitude and answers to journalists’ questions will be closely watched by market participants and the Euro will be highly affected.

The US Non Farm Payrolls are usually released Friday but this time they are released a day earlier due to Independence Day which is celebrated tomorrow. The market is likely to move very strongly at the time so we recommend caution.

GBP/USD

The United Kingdom continues to post positive economic data and this was confirmed once more yesterday when the Construction PMI showed a better than expected value. As a result the Pound strengthened and posted a new high at 1.7176.

Technical Outlook

Although we had another bullish day, the momentum seems to fade away slowly and the Relative Strength Index starts to descend. Retracements are still anticipated but the fundamental scene is filled with important events which will highly influence price action. First potential support is located at 1.7140 while yesterday’s high is considered resistance.

Fundamental Outlook

At 8:30 am GMT the Services PMI is released but its impact is usually lower than the one of the other two indexes released Tuesday and Wednesday. However, higher values than the anticipated 58.1 can strengthen the Pound and take the pair higher. An extra importance will have the US employment numbers released later in the day.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INDEPENDENCE DAY AFFECTS THE US DOLLAR. IRREGULAR TRADING EXPECTED

EUR/USD

Forex News: ECB President Mario Draghi indicated during yesterday’s Press Conference that interest rates will remain low, a fact which weakened the Euro. On the other hand, the US Dollar strengthened once the Non Farm Payrolls showed much better numbers than analysts’ forecast and these two factors generated a bear-controlled day.

Technical Outlook

The confluence zone created by the bullish trend line and the level of 1.3640 was broken decisively yesterday, a fact which would normally generate an extended move down. However, lately the pair is moving in a very difficult to predict fashion and lacks volatility, except for some isolated bursts. If the support at 1.3585 will be broken, the next logical target is 1.3520 but if this support is not broken today, we might see another move up which will encounter resistance at the recently broken trend line.

Fundamental Outlook

The day’s only noteworthy release is the German Factory Orders, scheduled at 6:00 am GMT and expected to drop significantly from 3.1% to -0.8%, a fact which would further weaken the Euro. The United States celebrate Independence Day and no economic indicators will be released. Also, American banks are closed and this might translate into irregular volatility.

GBP/USD

The Pound suffered from a lower than anticipated value of the Services PMI and the greenback strengthened on the back of positive employment data; as a result, the anticipated bearish retracement occurred and the pair touched support.

Technical Outlook

Yesterday’s touch of 1.7095 support resulted in a bounce higher so we expect to see a move that will test the recent high formed at 1.7176. The last bearish move cleared the overbought condition of the Relative Strength Index, a fact which sets the stage for further bullish moves; however, we must wait and see if the Dollar strength generated by the NFP will continue throughout today and if this is the case, price will most likely touch 1.7095 once again.

Fundamental Outlook

The United Kingdom doesn’t release any major economic data today and we expect a slow trading session, considering also the fact that US banks are closed.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: OPENING THE WEEK WITH RANGING PRICE ACTION

EUR/USD

Forex News: Friday the bears continued to take price lower and touched support at 1.3585 but the day lacked volatility, mostly due to the fact that the United States celebrated Independence Day and US banks were closed.

Technical Outlook

Today we are faced with a bounce-or-break scenario and the support at 1.3585 plays the main role. A bearish break would set the stage for a touch of the more important support located at 1.3520 but if sellers cannot maintain the momentum seen last week, we are likely to see a move back up into the zone around 1.3640. The Relative Strength Index is moving close to the 30 level which indicates an oversold market and slightly increases the chances of a bounce higher.

Fundamental Outlook

The day lacks major economic releases and the only notable indicator is the German Industrial Production scheduled at 6:00 am GMT. The indicator shows changes in industrial output but it is considered to have low impact on the Euro; however, higher numbers than the anticipated 0.3% usually strengthen the single currency.

GBP/USD

The Pair had a ranging day Friday but the bulls managed to surpass the previous high by a few pips before price started to move south. No major developments took place and Independence Day generated low trading volume.

Technical Outlook

We consider there’s a high chance of another encounter today with the high located at 1.7180 but a real break is less likely to occur. To the down side, the first major support is located at 1.7095 but such a distance is too much to travel on a Monday that lacks major fundamental announcements. We anticipate a ranging day, with slow price action.

Fundamental Outlook

The United Kingdom didn’t schedule any major economic releases for today so price direction will be mostly influenced by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US DOLLAR STILL WEAK AGAINST ITS COUNTERPARTS. FOMC MINUTES IN THE SPOTLIGHT

EUR/USD

Forex News: Price moved north yesterday after bouncing for a second time off of 1.3585 support and the Euro bulls proved they are not yet ready to admit defeat. The rise was partly generated by a surprisingly better value of the German Trade Balance.

Technical Outlook

Latest price action indicates that the next destination of the pair is the resistance located at 1.3640 as price tried on two separate occasions to break 1.3585 but failed. However, if the bears manage to tip the scales in their favor by breaking 1.3585, the pair’s next target will become 1.3520 support. Our bias is mainly neutral on the pair as the daily range is about 30 pips and price movement is extremely slow.

Fundamental Outlook

The main event of the day is the release of the FOMC Meeting Minutes scheduled at 6:00 pm GMT. The document will offer insights into the reasons that stood behind the FOMC members’ vote regarding the US interest rate and will probably give some hints about future monetary direction. Usually this event creates strong movement so we recommend caution if trading at the time.

At 7:30 pm GMT, ECB President Mario Draghi will deliver a speech in London at the Tommaso Padoa-Schioppa Memorial Lecture. Although the speech is not directly related to ECB’ monetary policy, Draghi’s public appearances can always influence the Euro strongly and caution is recommended as well.

GBP/USD

The Pound lost ground against the US Dollar during the first part of yesterday’s trading session as the UK Manufacturing Production showed a totally disappointing decrease of -1.3%. Later in the day however, the bulls erased most of the losses.

Technical Outlook

Yesterday we saw an immediate rejection when price touched the support zone created at 1.7095, a fact that shows that bulls still have a lot of underlying strength and could very well take the pair into 1.7180 area. Despite bad UK economic data, the US Dollar cannot take the Pound lower and for the time being, support is holding so the chances of a new high have increased.

Fundamental Outlook

Today the United Kingdom didn’t schedule any market moving economic indicators so price direction will be influenced by the FOMC Meeting Minutes and by technical factors.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: THE GREENBACK CONTINUES TO LOSE GROUND. RESISTANCE LEVELS THREATENED

EUR/USD

Forex News: Yesterday, before the FOMC Meeting Minutes, the pair rose to touch resistance as the US Dollar continued to lose ground against the Euro. The Minutes had a mixed impact and took the pair higher after an initial drop.

Technical Outlook

The bulls have the opportunity to break 1.3640 resistance and to take the pair into 1.3675. Since we are trading in a range-bound market, support and resistance levels tend to have a greater importance than in a trending market so if price stalls at 1.3675 and the Relative Strength Index becomes overbought, we anticipate a bearish pullback.


Fundamental Outlook

The ECB will release their Monthly Bulletin today at 8:00 am GMT; the document will contain an economic outlook and economic expectations from the Bank’s perspective and also reveals the data which was analyzed when the ECB made the Interest Rate decision. The event is considered to have a medium impact on the Euro unless surprising data is revealed.

GBP/USD

The pair touched support once again but the release of the FOMC Meeting Minutes generated a push north and currently the pair is headed towards 1.7180 top.

Technical Outlook

The US Dollar doesn’t seem to have an answer for Pound’s strength and the bears cannot break a single support level. Every time the pair touches the support at 1.7095, it bounces upwards but on the higher time frames, price is overbought and retracements lower are a distinct possibility. Until 1.7180 or 1.7095 is broken, out bias is neutral on the pair.

Fundamental Outlook

The Bank of England announces today the Interest Rate but no change is anticipated from the current 0.50% and probably the event will just create irregular volatility at the time of the release. If any hints are offered about future rate increases or if speculation takes over the market, we will probably see strong movement for the Pound. The scheduled time is 11:00 am GMT and we recommend caution if trading.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: THE LACK OF IMPORTANT ECONOMIC RELEASES SETS THE STAGE FOR SLOW PRICE ACTION

EUR/USD

Forex News: The Euro lost its appeal for investors as a Portuguese bank missed debt payments and generated concerns for the region’s economic recovery. As a result, the pair bounced lower at resistance and support is threatened again.

Technical Outlook

The resistance zone located at 1.3640 – 1.3650 held perfectly yesterday and stopped the previous rally, generating a swift move into the support located at 1.3585. The same bounce-or-break scenario will be played out today: a bearish break will open the door for a touch of 1.3520 while a bounce higher will make 1.3640 the first upper target once more. A breakout is anticipated, considering that for the entire week the pair traded in this narrow range, but the direction is unclear.

Fundamental Outlook

We have a slow day ahead, with no major economic news scheduled for release by either Europe or the United States. Price action is expected to be ranging unless unscheduled events occur.

GBP/USD

Bank of England decided to keep the interest rate at a record low of 0.50%, a fact that was anticipated by market participants and as a result, it didn’t create any market volatility.

Technical Outlook

The bulls didn’t manage to take price as high as 1.7180 and yesterday the pair’s direction was bearish; however, 1.7095 wasn’t threatened and price remained inside the channel created by the two mentioned levels. As we stated before, the pair is overbought on the higher time frames and this increases the chance of a bearish move, but we maintain our neutral stance until a break of either support or resistance occurs.

Fundamental Outlook

The day is calm for the Pound as the United Kingdom didn’t schedule for release any high-impact indicators. Price direction will be mainly affected by technical factors.


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


Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FULL DAY AHEAD. HIGH-PROFILE EVENTS AND HEAVY MOVEMENT EXPECTED

EUR/USD

Forex News: The Euro adopted a bullish path yesterday on the back of speculation that the ECB might use more stimulus measures such as a lending program which will boost consumer credit.

Technical Outlook

The pair moved higher, in close vicinity of 1.3640 resistance but according to the ranging style which governs the market lately, it bounced lower. The main levels to watch remain1.3640 as resistance and 1.3585 as support but considering today’s main events, we anticipate a breakout; however, the direction will be totally dependent on the outcome of these events.

Fundamental Outlook

Germany will announce at 9:00 am GMT the ZEW Economic Sentiment will be released, showing the level of optimism among German institutional investors and analysts who are highly informed about economic conditions due to the nature of their jobs. The anticipated value is 28.9, a decrease from the previous 29.8 and lower numbers usually weaken the Euro.

The US Retail Sales are released at 12:30 pm GMT; the indicator measures the change in sales made at retail outlets and its release is considered to have a high impact. The expected value is 0.6% compared with the previous 0.3% and higher numbers are beneficial for the US Dollar.

Fed Chair Janet Yellen will testify today at 2:00 pm GMT in Washington before the Senate Banking Committee; the topic is the Semiannual Monetary Policy Report and the speech is likely to be a major market mover, especially during its the second part when members of the Committee will ask questions and Janet Yellen will answer them.

GBP/USD

The Pound finally retraced yesterday and managed to break the closest support. The move south is attributed to high prices that were overextended and in need of a breather.

Technical Outlook

The break of the support located at 1.7095 is not a reason to believe the uptrend has finished but rather a signal that bullish momentum is fading. The chances of moves upwards remain high and a good place for uptrend resumption is 1.7063 (which is potential support, not confirmed yet), followed by 1.7010. The day’s fundamental events will have a very high impact on price action.

Fundamental Outlook

United Kingdom’s Consumer Price Index will be announced today at 8:30 am GMT. The indicator shows the price that consumers have to pay for the goods they purchase and is the main gauge of inflation; any increases above the expected 1.6% can further strengthen the Pound, taking the pair higher.

BOE Governor Mark Carney will testify at 9:00 am GMT about the Financial Stability Report at the House of Commons Treasury Committee Hearing. The testimony can have a huge effect on Pound’s movement, depending on the Governor’s attitude and answers so we recommend caution if trading at the time. Of course, the US events mentioned above will have a direct and high impact on price action.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US DOLLAR IN THE SPOTLIGHT FOR YELLEN’S SECOND TESTIMONY

EUR/USD

Forex News: Germany posted yesterday a disappointing number for the ZEW Economic Sentiment, showing that optimism regarding economic conditions is declining. On top of that, Fed Chair Janet Yellen stated that the economy continues to improve and the US Dollar added to the previous gains.

Technical Outlook

The support at 1.3585 was broken yesterday on the back of Euro weakness coupled with greenback strength but the level still needs to be re-tested to confirm the break. This re-test is usually seen easier on a lower time frame and if it is successful, we anticipate a touch of the next support, located at 1.3520. A move back above 1.3585 would make 1.3640 the first target and would suggest that the ranging period is still not over.

Fundamental Outlook

The US Producer Price index is released at 12:30 pm GMT, showing the change in prices paid by producers for their goods and services, compared to the previous month. The indicator has inflationary implications because a higher price charged by producers will be eventually passed on to retailers and ultimately, to the consumer. The expected change is 0.2% compared with last month’s -0.2% and higher numbers are considered beneficial for the greenback. Later in the day, at 2:00 pm GMT Fed Chair Yellen will testify before the House Financial Services Committee, an event considered to have a high impact on the US Dollar.

GBP/USD

The Pound scored another major victory against the greenback as United Kingdom’s CPI showed an unexpected increase from 1.5% to 1.9%. As a result, the pair printed a new multi-year high at 1.7191.

Technical Outlook

Although we have a new high, the resistance located around 1.7180 held yesterday and even rejected price lower; at the moment, that resistance is just pierced, not broken and we expect a new descent into 1.7095 support zone as the market is still overextended. A daily close above 1.7180 would be considered a true break of resistance and would indicate that higher prices will follow.

Fundamental Outlook

The day’s main event for the Pound is the release of the Claimant Count Change, an indicator which tracks changes in the number of unemployed people claiming social help due to their lack of jobs. A higher number suggests economic contraction and usually weakens the Pound; the release is scheduled at 8:30 am GMT and the expected change is -27.1K while the previous was -27.4K.


Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ALL EYES TURN TOWARDS EUROPEAN INFLATION INDICATORS

EUR/USD

Forex News: The US Dollar continued to advance against the Euro as Fed Chair Janet Yellen maintained a hawkish attitude and the US Producer Price Index change surpassed analysts’ expectations. Price is nearing support but no attempts were made to break it.

Technical Outlook

An important support for medium term price action is ahead: 1.3520 and we are faced with another bounce-or-break scenario. However, this time we slightly favor a bounce north, mostly because the Relative Strength Index has passed the 30 level downwards, suggesting oversold conditions and from a medium term perspective, the pair has been ranging. If the current support is broken, the next destination is likely to be 1.3480 (visible on a Daily chart).

Fundamental Outlook

The day’s main event will be the release of the European Consumer Price Index scheduled at 9:00 am GMT and expected to remain unchanged at 0.5%. ECB’s inflation target is just below 2% and the current CPI value is considered too low, thus an even lower value would be detrimental for the Euro.

At 2:00 pm GMT the Philly Fed Manufacturing Index comes out, showing the opinions of about 250 manufacturers from the Philadelphia district regarding current economic and business conditions. The expected value is 15.6, a decrease from the previous 17.8 and lower numbers usually weaken the greenback.

GBP/USD

The pair had a mixed trading day yesterday and price remained confined between support and resistance despite signs of improving job market in the United Kingdom.

Technical Outlook

Price is still on its way to 1.7095 following a bounce off 1.7180 resistance zone. The Relative Strength Index doesn’t show an extreme reading so there is no major reason to believe that bulls will take back control of the pair unless the US economy will show surprising figures.

Fundamental Outlook

The United Kingdom has a calm day ahead in terms of economic releases so all eyes will turn towards the United States events.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: SUPPORT LEVELS AHEAD. A BOUNCE-OR-BREAK SCENARIO UNFOLDS

EUR/USD

Forex News: The pair touched 1.3520 support yesterday but the European CPI remained unchanged and price stalled. The US Manufacturing Index for the Philadelphia district posted a surprisingly good value but the release just briefly strengthened the US Dollar.

Technical Outlook

The bears’ run seems exhausted and the Relative Strength Index is starting to climb out of oversold territory, a fact which suggests that support is still too strong for the sellers to break and that a bounce up might be next. However, yesterday’s ranging price action leaves the door open for both a bounce and a break. First resistance is located at 1.3585 while support sits at 1.3480 (if the current level is broken).

Fundamental Outlook

The sole release that can trigger sharp moves is the US Consumer Sentiment which is a leading indicator of consumer spending because usually when people are optimistic about the country’s economic conditions, they tend to spend more. The release is scheduled at 1:55 pm GMT and the expected figure is 83.5, a rise from the previous 82.5; if analysts’ forecast is surpassed, we are likely to see US Dollar strength.

GBP/USD

The Pound wasn’t affected by major news releases yesterday and the pair continued to move down towards 1.7095 as predicted. The US release helped the bears achieve this target.

Technical Outlook

For medium term movement, the support located at 1.7063 is very important but the first barrier in front of falling prices is the current level of 1.7095. A break of both these levels would indicate that the pair is ready for a bigger retracement and that the uptrend is starting to fade away. A bounce higher could potentially generate a climb back into 1.7180 area of resistance.

Fundamental Outlook

Ahead we have another day that lacks major United Kingdom news, thus price direction will be mainly affected by the technical factors and by the US release.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A LACKLUSTER FUNDAMENTAL SCENE TRANSLATES INTO A SLOW MONDAY

EUR/USD

Forex News: Friday’s trading session was characterized by a major reversal of what seemed to be a clear break of support. The US Consumer Sentiment survey showed a small decrease but the release didn’t have major impact on the pair.

Technical Outlook

Once price entered the zone created between 1.3520 and 1.3480 it was immediately rejected higher. This fact shows that bulls still have underlying strength and that a break of support is a low probability occurrence. The Relative Strength Index continues to move upwards, coming from an oversold condition and for today, we expect higher prices but a slow, ranging day is also a distinct possibility since no major economic indicators are released.

Fundamental Outlook

The German Bundesbank will release their Monthly Report at 10:00 am GMT, containing statistical data and analysis of current and future financial conditions. The event tends to have a higher impact if Bundesbank’s viewpoint differs from the one shown by the ECB.

GBP/USD

The pair had mixed direction Friday as the bears controlled the first part of the day but the Pound erased almost all losses during the second part. Support was tested but price was price higher after a brief dip below.

Technical Outlook

The fact that price was rejected after trying to break 1.7063 may very well be a sign that bulls are ready to resume upwards movement and to take the pair into 1.7180 once again. Even if such a move occurs, we don’t believe the entire distance will be traveled in one day and at the moment 1.7095 sits in front of rising prices. We anticipate a ranging day, with price moving above and below the level which was just mentioned.

Fundamental Outlook

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: MARKET PICKS UP DIRECTION AHEAD OF US INFLATION DATA

EUR/USD

Forex News: Yesterday’s trading session was mostly characterized by indecision and we saw the pair move higher just to drop immediately to touch support again. Overall the direction was mixed and price had ranging behavior.

Technical Outlook


For today we expect a more directional price action as the pair will probably break away from the current level of 1.3520. However, the direction of the move will be mostly influenced by the US economic data due to be released today, because the technical side of the market doesn’t hold any special clues. Yesterday’s high (1.3550) will potentially act as resistance while 1.3520 – 1.3500 zone still acts as support.

Fundamental Outlook

The day’s main event is the release of the US Consumer Price Index, scheduled at 12:30 pm GMT. A small change is expected from the previous 0.4% to 0.3%, a fact which would suggest that inflation has slowed down and could potentially weaken the US Dollar. AT 2:00 pm GMT the US Existing Home Sales numbers are released, showing the change in the annualized number of houses sold during the last month. If the number of houses sold increases, this often means that the buyers will spend additional money for furniture, house appliances, electronic devices, etc., thus spurring consumer spending. It also indicates that people are confident in economic conditions since a house is purchased usually when the economy is thriving. Today’s expected number is 4.98M, an increase from last month’s 4.89M.

GBP/USD

The lack of major economic releases generated a ranging day for the GBP/USD as well. Price moved between 1.7095 and 1.7063 without being able to break free for the entire day.

Technical Outlook

If the bears can take price below 1.7063 and at least one four-hour candle will close below this level, we are likely to see a touch of 1.7010 support next. A move above 1.7095 will open the door for uptrend resumption and possibly a touch of 1.7080 resistance zone (even if this comes true, the distance is too big to be traveled in a single day).

Fundamental Outlook

AT 10:00 am GMT the Confederation of British Industry will announce the Industrial Orders Expectations. This is a survey based on the opinions of about 550 manufacturers which shows the expectations of order volume for the next 3 months. Analysts’ forecast is a decrease from the previous 11 to 9, a fact which would be detrimental for the Pound if it were to come true.

Written by: Bogdan Giulvezan