Technical News | GDMFX Brokerage

[pasfx]

FOREX NEWS: THE SECOND DAY OF THE JACKSON HOLE SYMPOSIUM BRINGS US TWO IMPORTANT SPEECHES

EUR/USD

Forex News: Yesterday’s trading session was mostly controlled by the bulls although Philadelphia Manufacturing data was better than anticipated, a fact which would normally benefit the US Dollar. However, major levels were not threatened.

Technical Outlook

The current bullish move is likely to continue until 1.3295 is touched. The next potential turning point is 1.3330 but this move is considered just a retracement to the downtrend which was overextended and in need of a breather. The low at 1.3240 will act as potential support if the downtrend resumes and the next key level is located at 1.3200.

Fundamental Outlook

Today is the second day of the Jackson Hole Symposium and probably the most important one because both Fed Chairwoman Janet Yellen and ECB President Mario Draghi will deliver speeches at the Federal Reserve Bank of Kansas City. Yellen’s speech is scheduled at 2:00 pm GMT while Draghi’s will follow at 6:30 pm GMT; the main topic for both speeches will be the labor market, which is always a delicate subject that can strongly influence the market so caution is recommended.

GBP/USD

The pair ranged for almost the entire day, with a slightly bullish bias despite the fact that Retail Sales dropped during the previous month.

Technical Outlook

There is still room for the pair to move to the upside as no major resistance is near current price, but on the other hand, 1.6550 support is very close and it will most likely act as a magnet for price. A lot depends on Janet Yellen’s speech, which will probably influence heavily the US Dollar.

Technical Outlook

The United Kingdom didn’t schedule any major news releases for the day and market participants will focus on the two important speeches mentioned above.

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

Written by: Bogdan Giulvezan

 

[witaryan]

FOREX NEWS: THE POUND EXPERIENCES IRREGULAR VOLATILITY AS UK BANKS ARE CLOSED

EUR/USD

Forex News: During her speech at the Jackson Hole Symposium, Fed Chairwoman Janet Yellen mentioned improvements in the US labor market and suggested that the economy is healing while ECB President Mario Draghi signaled that the European economy is still not back on track.

Technical Outlook

The comments of the two bankers generated a sharp drop for the pair, after an almost perfect bounce off of 1.3295 level which was previous support, now turned resistance. The first lower target and support is located at 1.3200 but at the moment the pair is diverging from the Relative Strength Index as we can notice a lower low printed by price and a higher low made by the indicator. This is known as regular divergence and in this case is indicative of a potential bullish retracement. However, two important economic indicators come out today and price movement will be affected by their readings.

Fundamental Outlook

The first release of the day is the German IFO Business Climate, a confidence survey derived from the opinions of about 7,000 businesses. This large sample makes the survey a well respected one and increases its importance. The release is scheduled at 8:00 am GMT and the anticipated number is 107.1, a small decrease from the previous 108.

At 2:00 pm GMT the US New Home Sales numbers come out, with an anticipated change to 426K from the previous 406K. Better than expected numbers usually strengthen the US Dollar as they indicate that consumers are confident in economic conditions and they can afford a house.

GBP/USD

The pair was also affected by Yellen’s comments but not as much as the EUR/USD and overall we had a slow Friday, with mostly ranging price action.

Technical Outlook

We expect the pair to touch the level at 1.6550 today but we don’t anticipate a lot of movement as banks in the United Kingdom will be closed, celebrating Summer Bank Holiday. The first level of interest to the upside is 1.6600 but we might experience irregular volatility and low liquidity, making price action hard to predict.

Fundamental Outlook

As mentioned above, banks in the United Kingdom will be closed and no economic indicators will be released today but the pair will be affected by the US New Home Sales release.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: DOWNTREND’S “FATE” RESTS ON AMERICAN CONFIDENCE INDICATORS

EUR/USD

Forex News: The indicators released yesterday for both the European and American economies posted worse than expected values but not much action was seen and the pair ranged almost the entire day.

Technical Outlook

The week opened with a gap to the downside and more often than not, these gaps tend to be filled (price climbs to the point where the gap originated) so we might see a move into 1.3220. The regular divergence is still present as price is showing a lower low while the Relative Price Index is making higher lows and we have an oversold condition of the pair. These factors, combined with the strength of 1.3200 support will probably generate a bullish day.

Fundamental Outlook

The Dollar will be affected today by the release of the Durable Goods Orders, scheduled at 12:30 pm GMT and expected to increase substantially from last month’s 1.7% to 7.4%. An increased number of such orders shows that producers will have to speed up their activity to fill those orders and also that consumers are confident enough to buy long lasting goods.

At 2:00 pm GMT the US Consumer Confidence is released, showing the state of the public opinion regarding current and future economic conditions. Increased or high confidence is a leading indicator of consumer spending because usually people tend to spend more when they are confident about their economic situation. The anticipated value is 89.1 while the previous was 90.9.

GBP/USD

Despite the fact that banks in the United Kingdom were closed yesterday, the Pound managed to retrace higher after a failed break of 1.6550 support.

Technical Outlook

The week opened with a downside gap which was quickly filled after a bounce off of 1.6550 support zone but 1.6600 resistance stopped the upwards momentum. A stronger bullish move is still anticipated but if today the pair cannot break decisively the level at 1.6600, the downtrend might resume. The first lower barrier is of course 1.6550.

Fundamental Outlook

The British Bankers’ Association will announce today at 8:30 am GMT the Mortgage Approvals numbers. Lately the house market has been closely watched by the Bank of England and Mortgage Approvals are in close relation with house purchases because usually a mortgage is often used for such a purchase. More mortgages suggest that people are willing to buy houses and that loans can be obtained, facts which are beneficial for the British economy and hence for the Pound. Today’s expected number is 44.2K, a small increase from the previous 43.3.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: MARKET IN CONSOLIDATION PHASE. BREAKOUTS EXPECTED

EUR/USD

Forex News: The Durable Goods Orders showed a much better than anticipated value yesterday but the Core version of the same indicator, which excludes transportation items, posted a surprising drop and all this generated mostly sideways price action.

Technical Outlook

The bullish divergence is still present and the level at 1.3200 seems strong as the pair couldn’t break it decisively. On top of that, the weekly gap is still not closed so bullish moves are still expected but yesterday’s price action doesn’t offer a lot of hints about future direction so for the time being we are neutral on the pair, expecting a break of the consolidation pattern created around 1.3200.

Fundamental Outlook

The day ahead is very slow in terms of economic releases and the only notable indicator is the GFK German Consumer Climate scheduled at 6:00 am GMT. Its value is expected to drop slightly from the precious 9.0 to 8.9 and better than expected figures are usually beneficial for the Euro but the indicator tends to have a mild impact on the market.

GBP/USD

The British Bankers’ Association Mortgage Approvals were fewer than anticipated but the figure didn’t differ much from analysts’ expectations and it didn’t create a huge impact as a result.

Technical Outlook

The bulls failed to take price above 1.6600 minor resistance but on the other hand, the bears didn’t succeed to break 1.6550 and this shows that indecision is currently governing the pair. These two levels will be important for today’s price action and a break of either one will probably generate an extended move in that direction. A conservative approach would be to expect the retest after the initial break occurs.

Fundamental Outlook

The United Kingdom didn’t schedule any economic indicator releases for the day, thus price direction will be mainly influenced by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP – CATALYSTS FOR A BREAKOUT

EUR/USD

Forex News: The Euro managed to recover yesterday from an almost one-year low on the back of comments made by German finance minister who said that Mario Draghi’s latest speech was “over-interpreted”. This spurred interest for the single currency and took the pair into 1.3200 resistance.

Technical Outlook

Yesterday we saw a bearish break of 1.3200 support zone but developments during the day took price back into the mentioned zone for a retest. After a breakout, a retest of the recently broken level is common and usually, this retest shows if the break is sustainable or if it was just a fake. The bullish divergence is still present and the weekly gap is still not closed, so if price moves above 1.3200, we might see it climb at least until the gap is closed.

Fundamental Outlook

The German Consumer Price Index is released today at 12:00 pm GMT and analysts expect it to remain unchanged at 0.8%. German inflation contributes to overall Euro Zone inflation and lately it has been one of ECB’s major concerns; the Euro would benefit from higher values of the German CPI.

The United States will announce their Preliminary Gross Domestic Product today at 12:30 pm GMT and a minor decrease from 4.0% to 3.9% is expected. Since the GDP is an economy’s main performance gauge, better than expected values have the potential to strengthen the currency.

GBP/USD

The pair failed to break out of the tight range and instead bounced between support and resistance for the entire day as no major news affected either of the two currencies.

Technical Outlook

For today, a breakout is a high probability scenario but the direction will probably be determined by the US Gross Domestic Product. Yesterday we saw that price touched 1.6550 support and immediately moved up to test 1.6600 but failed to break this level as well. This shows indecision and the fact that price needs some sort of catalyst which will generate a break of either one of the levels mentioned.

Fundamental Outlook

The United Kingdom didn’t schedule any important news for today thus market participants will focus on the American events which are likely to trigger strong moves.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: IRREGULAR VOLATILITY DUE TO AMERICAN BANK HOLIDAY. POUND AFFECTED BY MANUFACTURING DATA

EUR/USD

Forex News: Friday’s main event was the release of the Euro Zone CPI which slowed down from 0.4% to 0.3%, just how analysts anticipated. The drop weakened the Euro and the pair finished the week with the bears in control.

Technical Outlook

Now that price surpassed 1.3150, we anticipate a move closer to 1.3100 after a potential retest of the recently broken level. However, the pair has been on an extended move to the south and the Relative Strength Index is oversold on a Daily chart, signaling that bullish pullbacks are a probable scenario. If this is the case, the first major barrier is 1.3200 which has now turned into resistance.

Fundamental Outlook

American banks will be closed today due to Labor Day and no economic indicators are scheduled for release today. As a result, the New York session might suffer from low liquidity and irregular movement. There are no major European releases either, so we may experience slow and ranging price action during the day.

GBP/USD

The Pound had another slow day Friday and no special developments took place. Price remained confined in a tight range and the anticipated breakout didn’t occur.

Technical Outlook

The resistance at 1.6600 and the support at 1.6550 managed to contain price for longer than anticipated and this was mostly due to the lack of major economic releases last week. Today the probability of a breakout is greatly increased but the direction depends mostly on the manufacturing data released by the United Kingdom.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing PMI is released. The indicator is a measure of optimism among purchasing managers from the manufacturing sector and also acts as a leading indicator of economic health. The expected value is 55.1 and a higher number is usually beneficial for the Pound.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: PRICE ACTION AFFECTED BY PURCHASING MANAGERS’ INDEXES

EUR/USD

Forex News: The Euro climbed yesterday, moving towards 1.3150 but price action lacked momentum as no major economic news came out and the market suffered from low volatility due to the fact that US banks were closed.

Technical Outlook

The bears slowed down their momentum but the downtrend is intact and a touch of 1.3150 is expected before we can see more downside movement. If 1.3150 is surpassed, the next resistance is located at 1.3200 but we might experience slow and ranging movement until the ECB meets this week. The first level of interest to the south is 1.3100.

Fundamental Outlook

The main event of the day will be the release of the American Manufacturing PMI scheduled at 2:00 pm GMT. This is a survey of about 400 purchasing managers from the manufacturing sector who are asked to rate economic and business conditions; the anticipated value is 57.0 and higher numbers usually strengthen the greenback as they suggest that optimism among purchasing managers is increasing.

GBP/USD

The Pound strengthened earlier in the day but the disappointing value of the British Manufacturing PMI stopped further bullish advances and erased some of the Pound’s gains.

Technical Outlook

The current bullish move can be considered just a retracement in a rather strong downtrend so we expect downside movement and another close encounter with 1.6550 support. The Relative Strength Index is approaching the overbought level for the first time in a long while and bearish divergence is present, a fact which favors another move south. If the pair continues upwards, it will encounter the first resistance at 1.6700.

Fundamental Outlook

AT 8:30 am GMT the British Construction PMI is released and anticipated to drop from last month’s 62.4 to 61.5. Since this is a measure of optimism among purchasing managers from the construction sector, it acts as a leading indicator of economic health and higher than anticipated numbers are beneficial for the Pound. As always, the US events will directly affect the pair as well.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: DOWNTREND RESUMED, MAJOR SUPPORT AHEAD

EUR/USD

Forex News: Speculation that the Fed will raise interest rates sooner than anticipated boosted the US Dollar and allowed it to climb versus its main counterparts. This affected our pair as well, but the impact was not tremendous and major support was not touched.

Technical Outlook

If 1.3100 support is touched, we expect bullish pullbacks into 1.3150 – 1.3200 resistance. On a Daily chart the trend has been moving straight down for an extended period and the Relative Strength Index is deep in oversold territory. These factors call for a “breather” in the form of a retracement north but the pair’s direction may be affected by the economic indicators that are released today.

Fundamental Outlook

The European Retail Sales numbers come out at 9:00 am GMT and a negative change is expected from the previous 0.4% to -0.3%. Although Retail Sales are usually a high impact indicator, this release is likely to have a muted impact because Germany and France have already released their consumer spending indicators, but higher than anticipated numbers will most likely add some strength to the Euro.

GBP/USD

The Pound weakened drastically against the US Dollar as a survey showed increased support for Scotland’s independence which will be decided through a referendum later this month. The release of the British Construction PMI was mostly overlooked by market participants.

Technical Outlook

Now that 1.6550 is clearly broken, the first support and target for the pair is located at 1.6460. The downtrend is resumed and the ranging period is hopefully over but we might see moves close to 1.6550 before 1.6460 is touched. If such a scenario occurs and 1.6550 will turn into resistance, the chances of a touch of 1.6460 will increase.

Fundamental Outlook

The UK Services PMI is released today at 8:30 am GMT and it’s expected to drop from last month’s 59.1 to 58.6, a fact which would be detrimental for the Pound. The indicator is a measure of optimism among purchasing managers from the British Services sector and also acts as a leading indicator of economic health.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: INTEREST RATES AND AN EARLY LOOK INTO AMERICAN EMPLOYMENT LEVELS SET THE STAGE FOR A WILD DAY

EUR/USD

Forex News: A cease-fire agreement between Russia and Ukraine strengthened the single currency and triggered a move up. Market participants overlooked the disappointing value of the European Retail Sales and the pair experienced a bullish day.

Technical Outlook

From a purely technical point of view, a bounce off of the current level at 1.3150 is very likely. If this bounce occurs, the next destination is 1.3100 support, but Mario Draghi’s speech and the ECB interest rate decision will decide the day’s direction and the technical aspect will be secondary.

Fundamental Outlook

At 11:45 am GMT the ECB will make public their decision regarding the interest rate which is not expected to change from the current 0.15%. A Press Conference will follow at 12:30 pm GMT and during this conference the highest volatility of the day will probably be seen. There has been a lot of talk about additional measures adopted by the ECB to stimulate economic growth and during the press conference ECB President Mario Draghi will probably answer questions on the matter. His attitude will be closely watched by market participants and will trigger sharp moves.

A privately owned company will release an early version of the US Non Farm Employment Change at 12:15 pm GMT. This data tries to mimic the government issued indicator which is released Friday and usually has a hefty impact on the market. The anticipated number is 216K and higher values usually strengthen the US Dollar but Friday’s indicator normally has a higher impact.

GBP/USD

The pair retraced higher yesterday with the help of a better than expected value of the Services PMI but bears regained control later in the day and a new low was printed.

Technical Outlook

The pair reached the important support located at 1.6460 but now it shows clear signs of slowing down. We can see multiple candles which suggest indecision and the Relative Strength Index reached oversold territory. This makes it harder for the bears to push the pair further down and increases the chances of bullish retracements but price action will be influenced by the fundamental aspect.

Fundamental Outlook

At 11:00 am GMT the Bank of England will announce the interest rate but no change is expected (currently 0.50%). Because a Statement is issued only in the case of a rate change, today we will probably not have any information about the reasons that stood behind the rate decision and this diminishes the impact of the event. However, surprises can happen and we recommend caution if trading at the time. The US events will have a direct impact on the pair’s movement throughout the day.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ECB SURPRISES THE MARKET WITH ANOTHER RATE CUT. FOCUS SHIFTS ON NON FARM PAYROLLS

EUR/USD

Forex News: The ECB unexpectedly decided to cut the interest rate to 0.05% (previously 0.15%) and Mario Draghi announced that a form of Quantitative Easing will be introduced in order to stimulate the economy. He also mentioned that other measures might be implemented if needed.

Technical Outlook

The surprise offered by the ECB drastically weakened the Euro and the effect was a massive drop of almost 200 pips. The selloff broke 1.3100 and brought the pair into the psychological support at 1.3000, solidifying the control of the bears and renewing the downtrend. Today’s direction will be heavily affected by the US Non Farm Payrolls but strictly from a technical point of view, we expect a small bounce followed by a trend continuation.

Fundamental Outlook

The day’s main event will be the release of the Non Farm Payrolls which is scheduled at 12:30 pm GMT; the expected number is 226K, an increase from last month’s 209K. Higher numbers show that more jobs were created and usually this strengthens the greenback because employment is closely correlated with consumer spending which in turn is a major part of the economy. The NFP release is known to be a huge market mover thus caution is recommended if trading at the time.

GBP/USD

The Bank of England left the rate unchanged and the event didn’t have a huge impact on the pair’s movement but US Dollar strength generated a clear break of 1.6460 support.

Technical Outlook

The downtrend is resumed and 1.6460 is clearly broken. This level will probably turn into resistance and will reject any bullish moves that may come close to it. The first major support is now located at 1.6250 (visible on a Daily chart) and the Relative Strength Index continues to move in oversold territory, a fact which favors moves to the north in the form of small retracements. The day’s direction will be heavily influenced by the American NFP release which will overshadow the technical side.

Fundamental Outlook

The United Kingdom doesn’t release major economic indicators today and all eyes will be turned towards the American employment report.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BULLISH PRESSURE MOUNTS AS RETRACEMENTS ARE STILL EXPECTED

EUR/USD

Forex News: The economic scene lacked major developments and the pair moved lower just to return higher later in the day. Yesterday’s low was broken before the bullish move and a new yearly low was printed.

Technical Outlook

Currently the pair is testing the recently broken level of 1.2920 but the downtrend doesn’t show signs of slowing down thus there’s a high probability that price will bounce lower, turning the previous support into resistance. The next major support is located at 1.2750 (better seen on a Daily chart) and the first resistance sits at 1.3000.

Fundamental Outlook

The day ahead has a lackluster news scene for the Euro and US Dollar and price action will be mostly influenced by the technical aspect.

GBP/USD

Mark Carney’s speech was postponed for a few hours yesterday but the bullish effect created by the Governor’s attitude was soon dampened by the sellers’ pressure.

Technical Outlook

The pair moved above and below the level at 1.6100 and the day was pretty volatile but neither side made any major advances. The Relative Strength Index continues to trade deep into oversold territory and the possibility of bullish moves has increased but the Pound cannot seem to recover, mostly due to the Scottish independence issue which continues to be a major influence. Minor support sits at 1.6060 while first resistance is located at 1.6160.

Fundamental Outlook

Bank of England Governor alongside members of the Monetary Policy Committee will testify on economic outlook and inflation today at 1:45 pm GMT, before the Parliament’s Treasury Committee. Their speeches will most likely have a strong impact on the Pound but the direction will be determined by their answers and attitude. Volatility will probably be high and caution is recommended.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: SHORT TERM RESISTANCE HOLDS. THE PROBABILITY OF NEW LOWS INCREASES

EUR/USD

Forex News: Yesterday the pair showed mixed price action with both the bulls and the bears battling for control. No major indicators were released and price couldn’t break minor resistance but the sellers didn’t manage to threaten support either.

Technical Outlook

Price action established the zone around 1.2960 as short term resistance and this will be the first barrier in front of higher prices. Yesterday we saw another rejection off of this level but further bullish movement is not out of the question and a break of the mentioned level will most likely bring in additional buyers. To the downside, the first level of interest sits at 1.2860 and a break would show that bears still have some steam left and that price will continue to move south, towards 1.2750.

Fundamental Outlook

The day’s direction will be influenced by Mario Draghi’s speech scheduled at 7:00 pm GMT. The ECB President will speak in Milan at the Eurofi Financial Forum 2014 and any reference regarding the current Euro Zone situation will most likely trigger a response in the market. Keep in mind that the relatively late hour of the speech may be a reason why impact could be mild; however, if Draghi’s position will be straightforward, the market impact will be strong so we recommend caution.

GBP/USD

After a touch of support, the pair headed north yesterday on the back of a hawkish attitude shown by Bank of England Governor Mark Carney during the Inflation Report Hearings.

Technical Outlook

Although we had some bullish action yesterday, the pair didn’t manage to break the short term resistance located at 1.6160. This might be a sign that downside movement is next, aiming for 1.6060 support, but we must note the position of the Relative Strength Index which is now coming out of oversold territory for the first time in a long period, a fact which favors the bulls. However, bearish price action is anticipated, considering the strong downtrend the pair is in.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for the day so price direction will be influenced by the technical factors.

Written by: Bogdan Giulvezan

 

[pasfx]

Forex News: Today’s headline – the American Retail Sales

EUR/USD

Forex News: The Euro had a bullish day yesterday but price remained between support and resistance for almost the entire duration of the trading session.

Technical Outlook

Today we expect a break of either the resistance at 1.2960 or the support at 1.2860 but the direction will be mainly influenced by the outcome of the American Retail Sales which will have a strong impact on the greenback. Major support sits at 1.2750 and we expect this level to be touched in the near future but not necessarily today.

Fundamental Outlook

As mentioned above, the American Retail Sales are released today and the outcome could influence the US Dollar heavily. The scheduled time is 12:30 pm GMT and the expected change is 0.3%, better than last month’s 0.0%. Sales made at a retail level represent the major part of the economy and the release is considered a major market mover; at the same time, the Core version of this indicator (which excludes automobiles from calculation) is released. For both versions, higher values normally strengthen the US Dollar.

GBP/USD

The Pound continues to be heavily influenced by speculation regarding Scottish independence and yesterday we saw bullish movement on the back of a new poll which showed that more people wish that Scotland remains a part of the United Kingdom.

Technical Outlook

Lately the technical aspect was overshadowed by the Scottish independence issue and this is likely to be a reason for speculation until the referendum result will be posted next week. For the time being, we can see some sort of rejection off of the resistance at 1.6750 and bearish divergence is present, so we anticipate a move lower which will probably find support at 1.6160 but a break of the current level could generate additional movement north.

Fundamental Outlook

There are no major news releases for the Pound today, thus price direction will be influenced by the US events and 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: DOWNTREND REMAINS INTACT AS RESISTANCE STILL HOLDS

EUR/USD

Forex News:The US Retail Sales didn’t have a major impact on the US Dollar although better than expected values were posted. Friday was mostly controlled by the Euro bulls but short term resistance couldn’t be broken.

Technical Outlook

Lately the level at 1.2960 is becoming more important because we already saw three failed attempts to break it. Last week ended with price very close to the mentioned level and today we expect a move away from it, possibly to the downside since we are still in a clear downtrend and the bears still have underlying strength. The year’s low at 1.2860 will be the first target but we don’t expect it to be reached within a day; on the other hand, a clear bullish break of 1.2960 will invalidate our scenario, making 1.3000 the pair’s next destination.

Fundamental Outlook

The scene is pretty calm today, with the only notable indicator being the US Industrial Production released at 1:15 pm GMT. The indicator shows the change in the value of total industrial output compared with the previous month but for today’s release no change is anticipated from the previous 0.4%. Usually, higher than expected values are beneficial for the greenback and push the pair lower.

GBP/USD

Friday the pair moved in a narrow range close to the level at 1.6250 and no substantial advances were made by either side as the American Retail Sales failed to trigger strong moves.

Technical Outlook

Price action reached a 50 period Exponential Moving Average which combined with the level at 1.6250 creates a confluent resistance zone that will be tough to break. This increases the chances of bearish price action for the day but a move above the confluence zone will probably trigger additional bullish momentum. First support sits at 1.6160 but a touch of this level is less probable to happen today even if price will resume downwards movement.

Fundamental Outlook

The United Kingdom didn’t schedule any important news releases for today and price action will be mainly influenced by the technical aspect and by the American release mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: GERMAN ZEW AND BRITISH INFLATION NUMBERS DRIVE PRICE ACTION

EUR/USD

Forex News: During the first part of yesterday’s trading session, the pair begun to move south but later on, a disappointing reading of the American Industrial Production weakened the US Dollar and allowed the Euro to push higher.

Technical Outlook

The resistance situated at 1.2960 managed to reject price once more and to stop bullish momentum. As long as the pair remains below the 50 period Exponential Moving Average and below resistance, the downtrend is intact and there are high chances of more downside movement, with the first important target being located at 1.2860.

Fundamental Outlook

An important German survey is released today at 9:00 am GMT: the ZEW Economic Sentiment. The importance of this survey comes from the fact that it is based on the opinions of German institutional investors and analysts who are well informed on the economic situation due to the nature of their jobs. The expected value is 5.2 and better than expected numbers will benefit the Euro.

At 12:30 pm GMT the American Producer Price Index is released and expected to remain unchanged at 0.1%. The indicator shows the change in prices charged by producers for their goods and services and usually, higher values strengthen the greenback.

GBP/USD

For almost the entire day the pair moved above and below the level at 1.6250, without any substantial developments. The US release went almost unnoticed and overall we had a ranging day.

Technical Outlook

We expect a day with stronger movement today and potential downtrend resumption if the bulls cannot break the confluence zone created by the 50 period Exponential Moving Average and the resistance at 1.6250. The first minor support is located at 1.6160 but today’s direction will be influenced by the fundamentals.

Fundamental Outlook

The British Consumer Price Index is released today at 8:30 am GMT and another small drop is expected, from the previous 1.6% to 1.5%. Although British inflation is not really a matter of concern at the moment because it stayed in an acceptable range, lower numbers are perceived as bearish and might drive the pair south.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FOMC CLUSTER OF EVENTS SETS THE STAGE FOR STRONG MOVEMENT

EUR/USD

Forex News: The German ZEW survey showed that optimism among professional investors and analysts increased but the value was still lower than the previous month and price ranged for the most part of the day.
2014.09.17 FOMC cluster of events sets the stage for strong

​

Technical Outlook

The pair is still trading very close the 50 period Exponential Moving Average and below resistance so the downtrend remains intact for the time being. However, the bearish momentum slowed down considerably and moves to the upside are possible but the day’s direction will be influenced by the afternoon US events and the technical side will be secondary.

Fundamental Outlook

At 12:30 pm GMT the US Consumer Price Index is released but no change is expected from last month’s 0.1%; however, higher values can benefit the US Dollar and take the pair lower. At 6:00 pm GMT a cluster of American events will most likely shake the market: the US Federal Funds Rate, the FOMC Rate Statement and Economic Projections, followed half an hour later by a FOMC Press Conference. Caution is recommended during these events as direction will depend on their outcome.

GBP/USD

The British CPI declined as analysts predicted, weakening the Pound, but later during yesterday’s trading session the US Dollar declined and the Pound erased all losses, managing even to climb higher than the opening of the day.
2014.09.17 FOMC cluster of events sets the stage for strong

​

Technical Outlook

Yesterday’s climb was mostly based on US Dollar weakness rather than Pound strength and the major resistance at 1.6250 is still not broken decisively so the picture remains fuzzy until we see a clear move above resistance, followed by a re-test of the broken level. Keep in mind that yesterday the pair almost touched 1.6160 support and immediately bounced higher, a fact which shows bull strength. Just like in the case of the Euro, today’s price direction will be heavily influenced by the fundamental side.

Fundamental Outlook

United Kingdom’s Claimant Count Change is released today at 8:30 am GMT. The indicator shows the change in the number of jobless people who apply for social help related to their unemployed condition and lower numbers than the anticipated -29.7K are usually beneficial for the Pound. At the same time a breakdown of the latest MPC votes on the interest rate will be released, showing the members’ position regarding a future rate change. Of course, the US events mentioned earlier will have a direct and probably strong impact on the pair.

Written by: Bogdan Giulvezan

 

[pasfx]

Forex News: Bulls make their presence known by threatening resistance
Posted → Technical News

EUR/USD

Forex News: After an unsuccessful attempt to break support, the pair bounced higher and continued to move in this direction for the entire day. The LTRO value was set at 82.6 Billion Euros but the time of the release was changed, taking traders by surprise.

Technical Outlook

The support zone around 1.2860 was pierced yesterday but price bounced higher soon after; however, the pair is still trading below the 50 period Exponential Moving Average and we saw a new low yesterday so the current bullish move must be considered just a simple retracement in a downtrend. A break above the 50 EMA and above 1.2960 would weaken the downtrend and open the door for a stronger move to the upside.

Fundamental Outlook

The day ahead lacks any notable economic or financial releases and we expect price action to be driven by technical factors.

GBP/USD

At the time of writing, the official results regarding the Scotland’s Independence Vote were not released but polls and surveys showed that Scottish people favored a “No” vote and probably the United Kingdom will remain with its current structure.

Technical Outlook

After the initial break of 1.6250, price re-tested the level from above and bounced higher on optimism that Scotland will remain a part of the United Kingdom. This bullish movement is likely to continue until 1.6460 is reached but if this occurs, we expect some sort of bearish reaction as probably the Relative Strength Index will enter oversold territory and the sellers still have underlying strength.

Fundamental Outlook

After a week filled with important events, the fundamental scene calms down a bit as no major events are scheduled for release.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ECB PRESIDENT TESTIFIES – VOLATILITY ALMOST GUARANTEED
Posted → Technical News

EUR/USD

Forex News: For almost the entire duration of Friday’s trading session the US Dollar gained and the pair moved south, ending the week below support. No major news came out but Euro weakness combined with Dollar strength triggered a 100 pip drop.

Technical Outlook

The bears took back control of the pair and drove price all the way down to 1.2860. The level was broken Friday but we are likely to see moves above it today, with the first resistance being represented by the 50 period Exponential Moving Average. To the downside, support is located at 1.2750 but we don’t expect this level to be touched today.

Fundamental Outlook

At 1:00 pm GMT, ECB President Mario Draghi will testify on monetary policy and this will be the day’s main event. He will speak in Brussels, before the European Parliament’s Economic and Monetary Committee and his attitude will be closely watched by traders around the world; high volatility is expected and caution is recommended.

GBP/USD

Similar to the Euro, the Pound gave back some of the previous gains and dropped for more than 200 pips Friday after climbing against the Dollar on the back of the Scottish referendum vote.

Technical Outlook

The bears’ underlying strength was made clear Friday and the break of 1.6460 resistance couldn’t be sustained by the buyers, a fact which indicates that more downside movement will follow. The first barrier in front of the sellers is located at 1.6250 support and today we are likely to see a touch of this level. However, we don’t expect a break or any other major developments as the day lacks British economic and financial releases.

Fundamental Outlook

The US Existing Home Sales are released at 2:00 pm GMT with an expected value of 5.21M. Higher numbers suggest a thriving economy and can add to the strength of the US Dollar. As already mentioned, the United Kingdom didn’t schedule any news releases today thus price action will be driven by the American events and by technical factors.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: EUROPEAN MANUFACTURING DATA IN THE SPOTLIGHT

Posted → Technical News

EUR/USD
Forex News: Mario Draghi’s speech didn’t create the expected volatility although he mentioned the fact that additional stimulus may be implemented if the current measures are not enough to fend off the risk of deflation.



Technical Outlook
The comments made by the ECB President weakened the Euro and the pair bounced lower after successfully testing 1.2860 from below. The next major target remains the support at 1.2750 and for the time being resistance is represented by 1.2860. The Relative Strength Index doesn’t show an extreme reading and price is still trading below the 50 period Exponential Moving Average so for now the downtrend is intact.

Fundamental Outlook
The French Flash Manufacturing PMI is released today at 7:00 am GMT and expected to change to 47.1. Half an hour later the German indicator with the same name will come out with an anticipated value of 51.3. Both indicators are gauges of optimism among purchasing managers from the manufacturing sector and better than expected numbers will most likely strengthen the Euro since these surveys are also leading indicators of economic health.

GBP/USD
The Pound showed some bullish behavior yesterday but for the most part it traded in a range, without any major developments taking place.



Technical Outlook
We are still expecting a touch of 1.6250 from above and even a potential break as the bears still have a lot of underlying strength. If the pair will bounce higher once this potential touch occurs, we are likely to see an extended move north, probably into the zone around 1.6460, but such a distance will not be traveled in one day unless a surprising event takes place.

Fundamental Outlook
The main Pound affecting event is the release of the Mortgage Approvals by the British Bankers’ Association, scheduled at 8:30 am GMT. The indicator offers insights into the health of the British house-market because usually a home is purchased with a mortgage, thus higher numbers than the forecast 42.9K will be beneficial for the Pound.



Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: MIXED PRICE ACTION AHEAD OF GERMAN BUSINESS CLIMATE SURVEY AND AMERICAN HOUSING DATA
Posted → Technical News

EUR/USD

Forex News: The first part of yesterday’s trading session was controlled by the bulls and the pair climbed comfortably above resistance but during the second part of the day we saw the sellers take control and push price back into the broken level.

Technical Outlook

Currently the price is hovering near 1.2860 level which was previously resistance. If the pair cannot move back below this level and instead we see rejection here, we are likely to witness an extended move north, into the resistance located at 1.2960. A move below 1.2860 would probably reignite the bears’ willingness to move the pair into 1.2750 key support.

Fundamental Outlook

At 8:00 am GMT the German IFO Business Climate survey will be released with an anticipated change from the previous 106.3 to 105.9. The importance of this survey comes from its large sample size of about 7,000 businesses; the representatives of these businesses are asked to offer their opinion regarding the current economic and business conditions as well as a 6 month outlook. Under normal conditions, higher numbers than forecast strengthen the Euro.
The American New Home Sales will be released at 2:00 pm GMT and expected to increase to 432K from the previous 412K, a fact which would be considered bullish for the US Dollar and may take the pair lower.

GBP/USD

The British Mortgage Approvals disappointed but the Pound moved higher in the beginning of the day; however, it gave back some of the previous gains and price action was rather mixed.

Technical Outlook

Yesterday’s movement doesn’t offer a lot of hints about future direction but the pair is approaching 1.6460 resistance and this level will probably act as a magnet to price. If we are going to see a touch of the mentioned level, a bounce-or-break scenario will unfold: a breakout would open the door for a touch of 1.6550 and a potential trend reversal while a bounce would most likely draw in more sellers and renew the downtrend.

Fundamental Outlook

The United Kingdom didn’t schedule any major news releases today thus price direction will be mainly influenced by the US events and by the technical aspect.


Written by: Bogdan Giulvezan