Technical News | GDMFX Brokerage

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FOREX NEWS: EUROPEAN BANKS STRESS TESTS RESULTS GENERATE CHOPPY PRICE ACTION

EUR/USD

Forex News: Friday’s price behavior was influenced by rumors regarding the European Banks stress tests and the bulls reversed an initial move below support. Although price action was choppy, the day and week ended above support.

Technical Outlook

The pair’s movement will be heavily affected by the European Banks stress tests released Sunday and some irregular volatility might be experienced throughout the day. The important levels are 1.2660 to the downside and 1.2695 (Friday’s high) to the upside. A break of either one would expose the resistance at 1.2750 or the support zone between 1.2620 and 1.2600 and could trigger an extended move in that direction.

Fundamental Outlook

The German IFO Business Climate survey is released today at 9:00 am GMT. The importance of this survey comes from its large sample of about 7,000 businesses but also from the fact that it acts as a leading indicator of optimism and economic health. The anticipated value is 104.6 and higher numbers usually have a positive impact on the Euro.

The US Pending Home Sales will be released at 2:00 pm GMT and expected to increase 1.1% from last month’s -1.0%, a fact which would strengthen the greenback.

GBP/USD

United Kingdom’s Preliminary Gross Domestic Product posted the anticipated value Friday but this was interpreted as bullish by most market participants and the Pound strengthened, finishing the week above 1.6060.

Technical Outlook

Although the pair climbed above resistance, the move doesn’t seem to be backed by strong fundamentals and could be easily reversed. If price moves below the 50 period Exponential Moving Average and below 1.6060, the first target will be represented by the minor support at 1.6000. If 1.6060 will be successfully tested from above and turns into support, price will head towards the next resistance which is located at 1.6180 but we don’t expect it to travel the entire distance unless surprising events take place.

Fundamental Outlook

The Confederation of British Industry (CBI) will announce today at 11:00 am GMT the Realized Sales. This index is a leading indicator of consumer spending because the sales made by wholesalers and retailers are directly influenced by consumers. Today’s anticipated value is 35 and numbers above it usually strengthen the Pound, suggesting increased economic activity.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: RESISTANCE AHEAD. US DATA DETERMINES THE DAY’S BIAS

EUR/USD

Forex News: Yesterday the pair’s behavior was mainly influenced by the fundamental aspect as we saw a weak Euro once a worse than anticipated value of the German IFO survey was posted, followed by US Dollar weakness when the Pending Home Sales failed to meet analysts’ expectations.

Technical Outlook

The latest momentum belongs to the Euro bulls on the back of a weak Dollar but on an hourly chart we can note the Relative Strength Index is approaching overbought territory and this may trigger some bearish price action. The 50 period Exponential Moving Average is now sitting below price and will offer support if touched from above; the first upper target is located at 1.2750 while support is represented by 1.2620 if the Moving Average is broken.

Fundamental Outlook

At 12:30 pm GMT the American Durable Goods Orders are announced, showing the change in orders for goods with a life expectancy of at least 3 years. Analysts expect a change of 0.4%, a huge difference from last month’s -18.4% and we believe that any value close to this expectation would strengthen the US Dollar.

Later in the day, at 2:00 pm GMT a US Consumer Confidence survey is released and expected to change from 86.0 to 87.4. A higher number would also benefit the US Dollar because confidence among consumers is often an indication of increased retail sales in the near future.

GBP/USD

The Pound continued to climb higher on the back of a better than anticipated value of the CBI Realized Sales and is now trading above a four-hour 50 period Exponential Moving Average. Overall yesterday the pair moved in one direction, without sharp reversals.

Technical Outlook

The peak at 1.6180 is considered the pair’s first target and also the first place where the bulls may encounter some resistance. If price will indeed reach this level and the Relative Strength Index will enter overbought territory, the chances of a bounce lower will be increased. To the downside the first support is offered by the 50 period Exponential Moving Average, followed by the level at 1.6060.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today so price action will be affected by the technical aspect and by the US indicators mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: US MONETARY POLICY IN THE SPOTLIGHT. VOLATILITY INCREASES

EUR/USD

Forex News: The Durable Goods Orders disappointed yesterday, posting a reading of -1.3% which weakened the US Dollar and allowed the pair to move straight up into major resistance. Later in the day, an optimistic value of the US Consumer Confidence survey erased some of the greenback’s losses.

Technical Outlook

On the hourly chart above, we can note the pair is having some difficulty breaking 1.2750 resistance and on top of that, the Relative Strength Index has reached overbought. Although the overbought condition is not an extreme one, we expect the pair to bounce lower, possibly for a touch of the 50 period Exponential Moving Average. If 1.2750 is broken, the next resistance is located at 1.2835.

Fundamental Outlook

The day’s main event is represented by the US interest rate announcement, together with the FOMC Rate Statement, both scheduled at 6:00 pm GMT. The rate is not expected to change from the current <0.25% but the biggest market mover will probably be the FOMC statement which will offer hints about future monetary policy and the reasons which stood behind the rate decision. A positive outlook contained by this Statement will most likely strengthen the US Dollar.

GBP/USD

Similar to the Euro, the Pound gained against the greenback and resistance was touched but a break didn’t occur. Overall we had a bullish day, with price controlled by the buyers.

Technical Outlook

Once price reached 1.6180 resistance, bullish momentum dampened and the action slowed down. Before this level can be broken, we expect small pullbacks lower and if a break will occur, the level needs to be tested from above for the pair to be considered a true one. To the downside, the first dynamic support is represented by the Exponential Moving Average while horizontal support sits at 1.6060.

Fundamental Outlook

At 9:30 am GMT the British Net Lending to Individuals value is announced; the indicator shows the sum of new credit issued to clients and higher numbers are considered bullish because they indicate a thriving economy where people are confident and willing to spend money. On the other hand, it also indicates that banks are comfortable issuing those loans. The expected value is 2.8B, a decrease from the previous 3.2B and higher than anticipated readings will most likely strengthen the Pound. Of course, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP HOLD CENTER STAGE

EUR/USD

Forex News: Before the US interest rate and FOMC Statement were released, the pair climbed above resistance after a shallow pullback but the Fed ended their bond buying program, indicating optimism and the US Dollar strengthened substantially against most of its peers.

Technical Outlook

The pair dropped more than 120 pips once the Fed decision was made public and we expect this bearish momentum to continue today. The first barrier which needs to be broken is represented by the support at 1.2620, followed by 1.2500. Although we believe the first support will be broken, we don’t expect the second one to be even touched; of course, depending on the important events scheduled for today, 1.2500 could be reached.

Fundamental Outlook

German inflation data is released today at 12:00 pm GMT (Preliminary CPI); analysts expect a negative change of -0.1% compared with last month’s 0.0% and this would weaken the Euro especially since lately the ECB tries without notable success to increase inflation in the Euro Zone.

The American Advance Gross Domestic Product will be released at 12:30 pm GMT, with an anticipated value of 3.1% compared with last month’s 4.6%. Since the GDP is an economy’s main gauge of performance, a lower than anticipated value signifies a contracting economy and could weaken the US Dollar. Half an hour later, at 1:00 pm GMT Fed Chair Janet Yellen will deliver a speech but we don’t expect it to be a major market mover; however, surprises can happen so we recommend caution nonetheless.

GBP/USD

Yesterday, prior to the US releases the pair bounced lower at resistance but massive US Dollar strength seen later in the day triggered a huge selloff, taking price below support.

Technical Outlook

The level at 1.6060 was broken decisively and the pair is trading close to 1.6000; we expect this level to be broken today and the pair to start heading towards the next support, located at 1.5900. However, the Relative Strength Index will soon reach oversold territory and this will probably trigger some bullish pullbacks but we don’t believe it will completely reverse price action.

Fundamental Outlook

The British fundamental scene is slow today and the pair’s direction will be almost completely determined by the US events and by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: MIXED PRICE ACTION AHEAD OF EUROPEAN INFLATION DATA

EUR/USD

Forex News: German inflation dropped yesterday more than analysts anticipated and the US Gross Domestic Product increased 3.5% while the anticipated value was 3.1%. Al this generated another bearish push for the pair during the first part of the day but a pullback occurred in the second part.

Technical Outlook

The bullish move seen yesterday doesn’t seem to have a clear reason and we expect the sellers to continue their assault on support today. The pair is currently testing the level at 1.2620 from below and we favor a bounce lower which will take price in close vicinity of 1.2500 key support. The Relative Strength Index is close to oversold (probably this had something to do with yesterday’s rise) but we don’t consider the position of the RSI something that could fully reverse price direction. However, if 1.2620 is broken to the upside, the next target will be represented by the 50 period Exponential Moving Average.

Fundamental Outlook

The day’s main event is the release of the European Preliminary Consumer Price Index scheduled at 10:00 am GMT. European inflation is a major concern for the ECB as their desired target is just below 2.0% and the current value of 0.3% is considered too low. For today’s release, analysts expect a rise of 0.4% and probably if this value will not be reached, the Euro will weaken, allowing the pair to descend.

GBP/USD

Although the pair moved lower when the better than expected value of the American GDP was posted, it soon began to climb, breaking 1.6000 to the upside and overall yesterday price was controlled by the bulls.

Technical Outlook

Today we expect the bearish pressure to take the pair lower, probably below 1.6000 as the latest move north is considered just a correction. If price continues to move to the upside, the 50 period Exponential Moving Average combined with the level at 1.6060 will provide resistance and the chances of bearish movement will substantially increase if that confluence zone will be reached.

Fundamental Outlook

From a fundamental point of view the entire week has been slow for the United Kingdom and the same is valid for today as no major economic or financial indicators are released. Price direction will be mainly affected 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: SUPPORT THREATENED AHEAD OF MANUFACTURING PMI RELEASES

EUR/USD

Forex News: Friday’s session was controlled by the bears and the pair remained below its resistance. This was mostly triggered by the fact that Euro Zone inflation didn’t show any clear sign of improvement, coupled with optimistic US economic data.

Technical Outlook

Once the pair touched 1.2500 support, it immediately bounced higher, showing signs of rejection; also, the Relative Strength Index is close to the 30 level which suggests a possible oversold condition. These factors make us believe that today we will see a retracement higher before the pair will make another attempt to break 1.2500 support, heading towards 1.2440.

Fundamental Outlook

At 3:00 pm GMT the US Manufacturing PMI is announced and expected to remain almost unchanged at 56.5 compared with last month’s 56.6. This is a survey of about 400 purchasing managers from the Manufacturing sector and acts as a leading indicator of optimism and economic health, thus higher numbers can strengthen the US Dollar, driving the pair lower.

GBP/USD

The pair showed choppy price action Friday as it failed to move away from the level at 1.6000. All moves were quickly reversed and neither side was in clear control.

Technical Outlook

Friday’s choppy action makes the picture unclear for today and the pair is range-bound below 1.6000. Once price moves away from this level, we can expect a touch of either 1.6060 resistance or 1.5900 support but the direction will be decided by the economic data scheduled for release.

Fundamental Outlook

The British Manufacturing PMI is released at 9:30 am GMT. As mentioned before, the PMI is a survey derived from the opinions of purchasing managers from the Manufacturing sector and indicates the levels of optimism. A value above the anticipated 51.5 has the potential to strengthen the Pound, taking the pair higher and the opposite is true for a value below expectations.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BEARS MAINTAIN CONTROL AS LONG AS RESISTANCE REMAINS INTACT

EUR/USD

Forex News: The week opened with a downside gap and on top of that, US Dollar strength generated by a better than expected American Manufacturing PMI took the pair into the support at 1.2440. However, price remained close to 1.2500 for most of the day.

Technical Outlook

The Relative Strength Index on a four hour chart is hovering near the 30 level which indicates oversold and the pair bounced higher after touching the support at 1.2440. Although these are bullish signs, the pair is in a downtrend and the strength still belongs to the bears so further advances to the south are not out of the question but 1.2440 remains the first barrier. To the upside, the 50 period Exponential Moving Average can provide resistance, as well as the current level at 1.2500.

Fundamental Outlook

The most important event of the day is the US Trade Balance scheduled for release at 1:30 pm GMT. This indicator measures the difference between imported and exported goods and a negative number suggests that imports exceeded exports; a higher number than the anticipated -40.0B can have a positive impact on the greenback as it shows increased demand for American goods and services.

GBP/USD

The British Manufacturing PMI posted a value which exceeded analysts’ expectations but this strengthened the Pound only for a brief moment and the bulls failed to capitalize on the news.

Technical Outlook

The strength generated by the positive British news found resistance at 1.6000 and the pair started to move lower for the remainder of the day but overall neither bulls nor bears managed to gain a clear advantage. However, the pair remains below resistance, without being oversold so we consider the bias remains bearish as long as 1.6000 is not breached. The first support is located at 1.5900.

Fundamental Outlook

The British Construction PMI is announced today at 9:30 am GMT and is expected to decrease slightly from last month’s 64.2 to 63.5. The indicator is a survey of purchasing managers from the construction sector and tries to gauge their optimism regarding economic and business conditions, thus a higher value can strengthen the Pound, taking the pair higher.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FIRST US EMPLOYMENT DATA OF THE WEEK COULD SHAKE THE MARKET

EUR/USD

Forex News: The bulls managed to break resistance yesterday as the Euro gained against a US Dollar weakened by a disappointing Trade Balance. Later in the evening rumors about turmoil within the ECB generated increased volatility and some strong movement.

Technical Outlook

The pair moved above the resistance at 1.2500 which has now turned into support and the short term bias is bullish. The Relative Strength Index is angled upwards, after being previously oversold and this indicates that further advances can be made, aiming towards 1.2620 resistance. The 50 period Exponential Moving Average is the first barrier in front of rising prices and a place where bullish movement can be reversed.

Fundamental Outlook

Today’s main event is the release of the ADP Non Farm Employment Change scheduled at 1:15 pm GMT. This report is put together by a privately owned company and tries to mimic the government employment data (NFP) which comes out Friday. A higher number than the expected 214K would strengthen the greenback because increased job creation suggests a thriving economy and acts as a leading indicator of consumer spending.

GBP/USD

Yesterday the pair had very slow and choppy price action, with its biggest move happening at the time of the British Construction data release. The worse than anticipated value weakened the Pound but this weakness didn’t last long and the pair continued slowly upwards.

Technical Outlook

Yesterday’s price action was inconclusive and does not offer a lot of hints regarding today’s probable direction. However, the Relative Strength Index is angled upwards, so we may see a touch of 1.6060 resistance if the bulls manage to keep price above 1.6000. The 50 period Exponential Moving Average is the first barrier and we may see a bounce lower once price touches it; if this happens, we believe 1.6000 will be broken to the downside.

Fundamental Outlook

The final British Purchasing Managers’ Index of the week is released today at 9:30 am GMT: the Services PMI. This survey acts as a leading indicator of economic health and higher numbers suggest optimism among purchasing managers from the services sector, thus the Pound tends to strengthen. The forecast is 58.5 while last month’s value was slightly higher at 58.7.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ECB’S RATE DECISION AND PRESS CONFERENCE SET THE STAGE FOR SHARP MOVES

EUR/USD

Forex News: The US Dollar strengthened yesterday even before the ADP employment data was released and a better than anticipated value for this indicator added fuel to the downwards momentum. The day was controlled by the bears and today we expect further advances.

Technical Outlook

The level at 1.2500 was broken to the downside and price didn’t even pause before moving past it, showing that the latest move has momentum and that 1.2440 is the pair’s next target. If this support is breached, the next one is located at 1.2280 but probably more than one day will pass before the pair reaches it. Today’s price direction will be mostly influenced by the ECB Press Conference so the technical side will be secondary.

Fundamental Outlook

At 12:45 pm GMT the ECB will announce their interest rate decision, with no change expected from the current 0.05% but the more important event is the ECB Press Conference scheduled at 1:30 pm GMT. ECB President Mario Draghi will read a prepared statement and then will answer journalists’ questions; this second part of the press conference is usually the one that triggers strong and often irregular movement. Caution is recommended if trading during the Press Conference.


GBP/USD

The Pound suffered losses during the first part of yesterday after a worse than expected value of the Services PMI was posted, but most of these loses were erased in the second part of the day, even if the US Dollar strengthened against other currencies.

Technical Outlook

Yesterday price bounced between the resistance at 1.6000 and the support at 1.5900, traveling the entire distance down then climbing back up close to resistance. Whichever level is breached first today will probably determine an extended move in that direction but we consider resistance harder to break because the 50 period Exponential Moving Average is in close vicinity.

Fundamental Outlook

The British Manufacturing Production numbers come out at 9:30 am GMT, showing the change in the total value of goods produced by the manufacturing sector. Last month’s value was 0.1% and the forecast for today’s indicator is 0.3%; a higher value would be beneficial for the Pound, taking the pair higher. Later in the day, at 12:00 pm GMT the Bank of England will announce the Interest Rate but no change is anticipated from the current 0.50%. However, caution is recommended as the market can react strongly to speculation about a future rate change.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FINISHING THE WEEK WITH A BANG: THE US NON FARM EMPLOYMENT REPORT

EUR/USD

Forex News: Although the ECB kept rates unchanged at a record low, the Euro weakened yesterday against most of its peers and a sharp fall was seen in our pair when ECB President Mario Draghi commented that additional stimulus measures will be used if needed.

Technical Outlook


The support at 1.2440 was breached yesterday but price soon retraced for a re-test; if the pair will rebound here, the level will turn into resistance and further down swings are anticipated. The Relative Strength Index is not signaling an extreme oversold situation and momentum belongs to the bears but the US employment report released today will strongly affect the US Dollar and will probably determine the day’s bias.

Fundamental Outlook

The main event of the day is scheduled at 1:30 pm GMT in the form of the US Non Farm Employment Change, also known as Non Farm Payrolls. This is considered the most important jobs related data coming from the United States and a higher number can strengthen the greenback substantially as more jobs indicate that consumer spending is likely to increase in the near future. The expected number is 229K, a drop from last month’s 248K. Later in the day, at 3:15 pm GMT, Fed Chair Janet Yellen will speak at a Symposium in Paris; audience questions are expected and volatility can increase so caution is recommended.

GBP/USD

The Bank of England decided to keep rates unchanged as expected but the pair had similar behavior to the EUR/USD and price moved into support after bouncing at resistance.

Technical Outlook


The 50 period Exponential Moving Average combined with the level at 1.6000 offered enough resistance for price to bounce lower and to maintain that direction for almost the entire day. On the other hand, the level at 1.5900 couldn’t be broken and we saw the pair pause there so we can’t consider either side to be in clear control. On top of that, today’s technical aspect will be secondary as the US employment data will hold center stage.

Fundamental Outlook

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

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BOUNCE AT SUPPORT: SIMPLE RETRACEMENT OR A REVERSAL IN THE MAKING?

EUR/USD

Forex News: The American Non Farm Payrolls showed a disappointing number for Friday’s release and the US Dollar weakened as a result, allowing the pair to climb above short term resistance. At the time of the release price action was choppy and some whipsaws could be seen on the lower time frames.

Technical Outlook

Although price crossed 1.2440 to the upside, the main picture still remains bearish as the pair is still below its 50 period Exponential Moving Average and below 1.2500 resistance. The first barrier the bears need to break is the current level at 1.2440 followed by 1.2360 but today we don’t expect major moves as the fundamental scene holds no special events.

Fundamental Outlook

The release of the Sentix Investor Confidence survey is the only thing that could affect the Euro today but overall we have a calm day. The survey is based on the opinions of about 2,800 investors and analysts regarding economic health, but usually it doesn’t create strong movement unless a big difference between forecast and actual number is posted. The scheduled time is 9:30 am GMT and the forecast is -6.9.

GBP/USD

Price direction was affected Friday by the US employment report and overall the pair moved similar to the EUR/USD, climbing due to a weak greenback.

Technical Outlook

Although the Dollar showed signs of weakness, the Pound bulls couldn’t break or even touch the resistance at 1.5900. From a strictly technical point of view, Friday’s climb can be attributed to bullish divergence present on a four-hour chart and can be considered a simple retracement in a downtrend. For today we expect a bounce at 1.5900, followed by a move lower but if this level will be breached, the 50 period Exponential Moving Average will be the next resistance; support sits at 1.5790, Friday’s low.

Fundamental Outlook

The United Kingdom didn’t schedule any news releases for the day so price action will be determined by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BANK HOLIDAYS MAY TRIGGER IRREGULAR VOLATILITY

EUR/USD

Forex News: The pair continued to move higher yesterday, on the back of a US Dollar weakened by Friday’s disappointing NFP result. However, resistance couldn’t be surpassed and a bounce lower was seen in the second part of the day.

Technical Outlook

The resistance located at 1.2500 combined with the 50 period Exponential Moving Average created a confluence zone which proved enough motive for the pair to start to move on a bearish path. Now 1.2440 has turned into support once again and a break would make 1.2360 the next target; we favor this scenario as the bears still have underlying strength and a downtrend is still in place.

Fundamental Outlook

American Banks will be closed today, celebrating Veterans Day and French Banks will be closed in celebration of Armistice Day. This means that no major indicators will be released and that price direction will be mainly influenced by the technical aspect.

GBP/USD

The pair spent a lot of time yesterday near the resistance at 1.5900 before finally dropping in the second part of the day as the bulls made several failed attempts to break the mentioned level.

Technical Outlook

On an hourly chart, price moved back below the 50 period Exponential Moving Average and the resistance at 1.5900 couldn’t be clearly broken although several candles pierced it. These are bearish signs which make us believe that today the sellers will be in control of the pair and will take it lower. The first potential support is located at 1.5790 but a break of this level is not anticipated although we expect price to move towards it. For the time being, the level at 1.5900 is still resistance.

Fundamental Outlook

The Pound will not be affected today by important news releases and the fact that American Banks are closed may generate irregular volatility.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BRITISH INFLATION REPORT AND CARNEY’S SPEECH TAKE CENTER STAGE

EUR/USD

Forex News: Yesterday the pair moved very slowly compared to the way it has moved during the last period and clear direction lacked. However, the bulls showed more strength and price traveled upwards for the most part of the day.

Technical Outlook

The latest move north is not very convincing and we anticipate that price will drop towards the support at 1.2360 if the resistance at 1.2440 is not broken soon. The 50 period Exponential Moving Average is above price, a fact which means that the picture remains bearish. On the other hand, a break of 1.2440 resistance would open the door for a move towards 1.2500 and would make the short term bias bullish.

Fundamental Outlook

Euro Zone’s Industrial Production is announced today at 10:00 am GMT and is expected to change 0.6% while last month’s value was -1.8%. The indicator measures the change in the value of output produced by manufacturers and a higher number suggests a thriving economy and usually strengthens the Euro.

GBP/USD

The pair had a slow day as well and probably a big role was played by the fact that yesterday US Banks were closed. For most of the day control did not clearly belong to either side but overall the bulls were more prominent.

Technical Outlook

The current direction is likely to remain unchanged until 1.5900 is touched and if that happens, we anticipate a bounce lower. On the other hand, a break of resistance followed by a successful re-test will most likely bring in more buyers and the bias will turn bullish.

Fundamental Outlook

The British Claimant Count Change is released today at 9:30 am GMT; the indicator shows how many people applied for social help due to unemployment compared with the previous month and lower numbers are beneficial for the currency. The anticipated change is -24.9K while the previous was -18.6.


At 10:30 am GMT the BoE will release the Inflation Report and Governor Mark Carney will hold a press conference discussing the report which contains an outlook for inflation for the next 2 years. Carney’s speech will probably be the day’s most important event and volatility is likely to increase at the time so caution is recommended.

Written by: Bogdan Giulvezan

 

[pasfx]

Forex News: Euro breakouts anticipated while the Pound struggles to overcome support

EUR/USD

Forex News: Euro Zone’s Industrial Production came out as anticipated, with a change of 0.6% so the event didn’t generate substantial movement. For almost the entire day the pair bounced between support and resistance, without clear direction.

Technical Outlook

The support at 1.2440 and the resistance at 1.2500 proved to be strong barriers which rejected price yesterday. However, today we expect price to move outside the range created by the two levels and to continue in the direction of the initial break. We favor the short side given the fact that yesterday the Relative Strength Index reached its 70 level twice and another bullish move would probably create bearish divergence. First support will be located at 1.2360 if 1.2440 is broken while resistance sits at 1.2620 if 1.2500 is broken.

Fundamental Outlook

The day lacks major news releases but noteworthy is the German Final Consumer Price Index which is scheduled for release at 7:00 am GMT. The expected change is -0.3%, same as last month but the Final version doesn’t hold as much importance as the Preliminary; higher values would strengthen the Euro nonetheless.

GBP/USD

The Pound weakened substantially yesterday as the Claimant Count Change posted a value of -20.4K, worse than analysts expected. This took price back below 1.5900 and generated a day controlled by the bears.

Technical Outlook

The momentum belongs to the bears once again but the important support at 1.5790 sits in front of descending prices. If this barrier can be surpassed, the next level of importance is represented by 1.5750 but we must note the position of the Relative Strength Index which touched the 30 level twice yesterday on an hourly chart. This doesn’t mean necessarily that price will bounce higher at support but it is a bullish factor which must be taken into account.

Fundamental Outlook

There are no major news releases scheduled for today thus price direction will be mainly influenced by the technical aspect.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: ALL EYES ON DRAGHI’S TESTIMONY ON MONETARY POLICY

EUR/USD

Forex News: A better than expected US Retail Sales reading initially took price lower Friday, creating US Dollar strength, but soon after the pair rebounded higher, breaking resistance.

Technical Outlook
The pair moved outside the horizontal channel by breaking the resistance located at 1.2500 and we expect the upside to prevail today but a test of the recently broken level is very probable. The Relative Strength Index is curving downwards in close vicinity of its 70 level, adding to our belief that price will touch 1.2500 before moving north. If price will not bounce higher and the level will not turn into support, we are likely to see a move towards 1.2400.

Fundamental Outlook
At 2:00 pm GMT, ECB President Mario Draghi will testify before the Committee on Economic and Monetary Affairs. The topic will be monetary policy and this makes the speech a very important one because traders around the globe will try to decipher his words in order to find clues about the next interest rate decision. Volatility is expected and caution is recommended.

GBP/USD
Friday’s trading session was characterized by mixed behavior as price dropped when the US Retail Sales came out but soon the Pound erased most of the losses and the pair moved north, finishing the week on a bullish note.

Technical Outlook
The Relative Strength Index on a four hour chart has started to move upwards and is trying to come out of oversold territory so for today’s trading session we expect price to rise, having 1.5750 as target. However, this resistance level could be a too distant target as Mondays are usually slow days if no major economic indicators are released. To the downside, potential support sits at 1.5590 and we don’t expect it to be broken.

Fundamental Outlook
The United Kingdom didn’t schedule any news releases for today but the pair will be influenced by the US Industrial Production numbers which come out at 2:15 pm GMT. The indicator tracks changes in the value of output produced by the Industrial sector and higher values than today’s anticipated 0.2% will most likely strengthen the greenback, taking the pair lower.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: BRITISH INFLATION IN THE FOCUS – POUND HIGHLY INFLUENCED BY THE CPI READING

EUR/USD
Forex News: Yesterday the sellers managed to reverse the initial bullish breakout and to bring the pair back inside the horizontal channel. ECB President Mario Draghi mentioned that added stimulus is needed to bring the economy back on the right track and this created further Euro weakness.

Technical Outlook
Although the channel created by 1.2500 resistance and 1.2400 support was broken, price returned inside, signaling that the pair might be headed towards 1.2400. The bias is slightly bearish but as long as price cannot exit the channel and remain outside, the ranging period is not over and we might see further choppy price action.

Fundamental Outlook
At 10:00 am GMT the German ZEW Economic Sentiment survey is released and expected to show a value of 0.9, an increase from last month’s -3.6. The survey tracks optimism among German professional analysts and investors and usually a higher than anticipated number strengthens the Euro.
The American Producer Price Index will be released at 1:30 pm GMT and expected to change -0.1%, same as last month. The indicator has inflationary implications because a higher price charged by producers will be eventually passed on to the retail consumer so higher values usually strengthen the US Dollar.

GBP/USD
The pair dropped yesterday after a bullish move which brought price in close vicinity of 1.5750 resistance. Almost the entire day was controlled by the bears but support was not threatened.

Technical Outlook
The outlook is once again bearish as the pair is still trading below the 50 period Exponential Moving Average after a failed attempt to move above it. The first support and potential target for the day is located at 1.5590, while resistance still sits at 1.5750 but the day’s bias will be determined by the British inflation numbers released in the morning.

Fundamental Outlook
The British Consumer Price Index is scheduled for release at 9:30 am GMT and the expected change is 1.2%, same as last month. Bank of England Governor Mark Carney recently expressed his concerns about downside risks for inflation and this could mean that a lower value of the CPI might be perceived more bearish than usual, generating Pound weakness.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: MIXED PRICE ACTION AHEAD OF THE FOMC MEETING MINUTES

EUR/USD

Forex News: Yesterday the ZEW Economic Sentiment survey showed increased levels of optimism among German analysts and professional investors, a fact that strengthened the Euro and took the pair back above short term resistance.

Technical Outlook

The period of indecision is still not over as shown by the pair’s movement lately: resistance has been broken but the bulls failed to push price higher and on the other hand, the bears couldn’t make any significant advances when price moved below 1.2500 again. Currently price is testing the level at 1.2500 which may turn into support but if it’s broken to the downside, support will be offered by the bullish trend line seen on the chart above. If price travels higher the first resistance is represented by the double top located at 1.2577.

Fundamental Outlook

The American Building Permits numbers are announced at 1:30 pm GMT and expected to increase to 1.04M from last month’s 1.02M (annualized number), a fact which would generate US Dollar strength. However, a more important event is the release of the FOMC Meeting Minutes scheduled at 7:00 pm GMT. The Minutes contain insights into the reasons which stood behind the latest interest rate decision and usually can offer hints about the bias of future monetary policy. We expect strong moves for the greenback at the time of the release and caution is recommended.

GBP/USD

The British Consumer Price Index surprised yesterday by showing an increase of 1.3% compared with analysts’ expectation of 1.2%. However, the market didn’t respond as anticipated and the Pound didn’t move strongly at the time of the release.

Technical Outlook

The 50 period Exponential Moving Average offered good resistance yesterday and pushed price lower but the picture remains mixed, with a slightly bearish bias, considering the strong downtrend. The first support is located at 1.5590 but if price can break through the Moving Average, we will probably see a climb close to 1.5750.

Fundamental Outlook

The Bank of England will make public today at 9:30 am GMT the breakdown of the latest interest rate votes. This is a good opportunity to see if more MPC members voted for a rate change or if some of them are starting to change their stance. Usually volatility is created only if some MPC members changed their view, but caution is recommended nonetheless.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: FINAL DAY OF THE TRADING WEEK RULED BY TECHNICAL FACTORS

EUR/USD

Forex News: The German Manufacturing PMI disappointed yesterday and American inflation numbers came out slightly better than anticipated but the impact was not very strong and the pair showed very choppy price action throughout the day.

Technical Outlook

The pair touched 1.2577 again but failed to move above it and then the bullish trend line was tested but it offered good enough support. The picture is mixed and neither side is in control, a situation which will most likely continue until 1.2577 resistance or diagonal support is broken. Horizontal support sits at 1.2500 and will be the pair’s first destination if the trend line is breached.

Fundamental Outlook

The day is rather calm in terms of economic news releases but ECB President Mario Draghi will speak at the 24th European Banking Congress, in Frankfurt and this can be a reason for volatility depending on the matters discussed. The event is scheduled at 8:00 am GMT and caution is recommended although the speech is not expected to be a major market mover.

GBP/USD

British Retail Sales showed a change of 0.8%, much better than the anticipated 0.4% and the Pound strengthened as a result, generating a trading day with bullish price action.

Technical Outlook

The resistance at 1.5750 wasn’t threatened yesterday and the Relative Strength Index is close to the 70 level which shows a potentially overbought condition. If price will touch 1.5750 with the RSI being overbought, we favor a bounce lower, with the 50 period Exponential Moving Average being the first support. A break of this support would open the door for a move towards 1.5590.

Fundamental Outlook

The day ahead lacks major news releases for the Pound but the only noteworthy data is the Public Sector Net Borrowing scheduled at 9:00 am GMT and expected to decrease to 6.9B from the previous 11.1B. A lower figure than the anticipated one is considered beneficial for the Pound but the indicator usually has a medium impact.

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

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: SCARCE ECONOMIC RELEASES TRANSLATE INTO A SLOW MONDAY

EUR/USD

Forex News: Last week’s strongest move occurred Friday on the back of Mario Draghi’s renewed commitment to add further stimulus in order to boost economic recovery and to raise inflation. This was perceived as bearish for the Euro and the pair moved strongly south.

Technical Outlook

The pair broke through the bullish trend line and the support at 1.2500 before stopping close to 1.2400 support. The momentum clearly belongs to the bears as the Euro is affected by inflation concerns and we expect the downside to prevail but before that can happen, some sort of retracement higher is likely to occur. The Relative Strength Index traveled below its 30 level, indicating oversold and increasing the chances of bullish pullbacks.

Fundamental Outlook

The release of the German IFO Business Climate survey is the only notable event of the day. This survey shows the optimism of about 7,000 German business owners regarding economic conditions and acts as a leading indicator of economic health. The scheduled time of the release is 9:00 am GMT and a higher number than the expected 103.0 usually has a beneficial impact on the Euro.

GBP/USD

Friday the US Dollar pushed the pair lower but the strength of the move was not convincing and a lot of the losses were erased later during the day. Overall we saw choppy price action, without substantial advances.

Technical Outlook

The pair has been moving mostly sideways lately, with single impulses which failed to be continued and were quickly reversed. The bias is slightly bearish but it is clear that momentum is not strong; however, price is trading below the 50 period Exponential Moving Average and the support at 1.5590 is likely to act as a magnet. Resistance is located at 1.5750 but we don’t expect it to be touched today.

Fundamental Outlook

There are no economic releases scheduled today for the Pound and the same is true for the US Dollar so we expect a slow day, with choppy price action.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: A BUSY DAY AHEAD: AMERICAN GDP AND BRITISH INFLATION HEARINGS IN THE FOCUS

EUR/USD

Forex News: The Euro climbed against the American Dollar yesterday as price direction was affected by a better than expected value of the German IFO Business Climate survey. Technical factors like the oversold condition of the pair also played an important role for the pair’s movement.

Technical Outlook

Although yesterday the pair climbed, the bears still have enough underlying strength to bring price down for another test of the support level at 1.2360. If the pair continues upwards, it will encounter resistance at the 50 period Exponential Moving Average but a bullish break will open the door for a touch of 1.2500 resistance. The fundamental aspect will have an important influence on today’s price action.

Fundamental Outlook

The first noteworthy event of the day is the release of the American Preliminary Gross Domestic Product scheduled at 1:30 pm GMT. A higher value than the expected 3.3% would generate US Dollar strength although this version of the GDP is less important than the Advance version.

The US Consumer Confidence is released at 3:00 pm GMT and expected to increase from the previous value of 94.5 to 95.9. A consumer that is confident in the economic situation of the country is likely to spend more and this helps the economy, thus a higher than anticipated value will add fuel to the US Dollar, driving the pair lower.

GBP/USD

The Pound also climbed yesterday although no major indicators were released. Overall we had a pretty slow day, with price action mainly influenced by the technical aspect.

Technical Outlook

The pair is moving mostly sideways lately and neither bulls nor bears are in clear control; price is sitting above the 50 period Exponential Moving Average but a clear slope of the line is not present, indicating the pair is in a ranging period. Until either 1.5750 resistance or 1.5590 support is broken, the ranging period is not over and direction changes can occur, especially if the Relative Strength Index will reach an extreme condition.

Fundamental Outlook

BOE Governor Mark Carney and other MPC members will testify on inflation today at 10:00 am GMT before the Parliament’s Treasury Committee. The hearings last for a few hours and during this time volatility and sharp moves may be experienced. Before the hearings start, at 9:30 am GMT the British Bankers’ Association will release the Mortgage Approval numbers; the forecast is 38.5K and a higher value is likely to strengthen the Pound but usually this indicator tends to have a mild impact on the market.

Written by: Bogdan Giulvezan