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Gdmfx - Daily News

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FOREX NEWS: ECB PRESIDENT DRAGHI TESTIFIES. BEWARE OF SUDDEN VOLATILITY SPIKES


EUR/USD


Forex News: Friday the pair moved higher on the back of better than expected numbers for the European Purchasing Managers’ Indexes but the key resistance at 1.2000 pushed the pair lower and erased all gains, so the session ended close to where it started.

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Technical Outlook

Friday’s price action doesn’t offer a lot of clues for the next move and overall the pair remains in a range, without clear direction. Strong resistance is located at 1.2000 and to the downside, if the pair can move below the 50 EMA, it might drop into 1.1900. Today’s price action will probably be affected by the German Federal Elections that took place Sunday, so the technical side will be secondary.

Fundamental Outlook

Today at 1:00 pm GMT, ECB President Mario Draghi will testify in Brussels before the European Parliament Economic and Monetary Affairs Committee, about monetary developments and the economy. This has the potential to be a high-impact event, so caution is recommended.

The day’s other notable event is the release of the German IFO Business Climate, which is a survey derived from the opinions of about 7,000 businesses, focused on economic optimism and outlook for the next 6-months. The time of the release is 8:00 am GMT and the expected value is 116.0, a small increase from the previous 115.9.


GBP/USD

British Prime Minister May delivered a speech Friday in Florence, mentioning that the U.K. will be leaving the single market and the customs union. This was the main reasons for the weakening of the Pound but support wasn’t breached.

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Technical Outlook

The last 4-hour candle shows a long wick in its lower part, which is a sign of rejection. Also, price is bouncing off of the confluence zone created by the 50 period Exponential Moving Average and the horizontal support at 1.3450. Strictly from a technical point of view, all this suggests that price will probably bounce higher but the fundamental side (represented by Prime Minster May’s stance) indicates that lower prices will follow. Look for a break of the confluence zone because if it occurs, more sellers will probably join.

Fundamental Outlook

The United Kingdom didn’t schedule any important releases for today, thus the pair’s direction will be mainly decided by the technical aspect.

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FOREX NEWS: RANGE-BOUND TRADING CONTINUES BUT BEARISH PRESSURE INCREASES


EUR/USD


Forex News: Following the German Federal Elections, the Euro depreciated against the US Dollar and the pair had a bearish session yesterday, moving below support. However, price is still confined in a range and a clear trend is not in place.

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Technical Outlook

The short term momentum belongs to the bears and the pair is trading below the 50 period Exponential Moving Average but 1.1875 support is still holding at the time of writing. Once this level is broken, we expect a quick move into 1.1840, which is a more important level and a break would suggest that a downtrend may be developing. To the upside the first resistance is 1.1900, followed by the 50 period EMA.

Fundamental Outlook

The U.S. Consumer Confidence is today’s first event, scheduled at 2:00 pm GMT. The survey has a large sample size (about 5,000 households) and tries to gauge the respondents’ opinions regarding current and future economic conditions. The expected reading is 119.6 and usually a higher number shows optimism, strengthening the US Dollar but the impact is generally medium.

At 4:45 pm GMT, Fed Chair Yellen will speak in Cleveland at the National Association for Business Economics Annual Meeting. The title of the speech is "Inflation, Uncertainty, and Monetary Policy" and audience questions are expected, so depending on her answers, we may see increased volatility on USD pairs.


GBP/USD

The pair remained in a range during yesterday’s trading session, mostly due to the lack of economic releases. No major developments took place and price action was choppy.

SJkSDxK.jpg

Technical Outlook

The pair is still capped by the resistance at 1.3616 and the support at 1.3450, with the 50 period EMA in close vicinity. Until we see a clear break of this horizontal channel, the direction will be unclear and the pair will continue to show range-bound behavior. A strong break of the confluence zone created by the 50 EMA and 1.3450 support would weaken the uptrend, thus increasing bearish pressure.

Fundamental Outlook

It’s a slow day for the Pound from an economic standpoint, without any notable releases. This may be another reason for ranging price action.

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FOREX NEWS: US DOLLAR GAINS TRACTION, BREAKS KEY SUPPORT LEVELS


EUR/USD


Forex News: Yesterday’s trading session belonged to the bears, on the back of increasing demand for US Dollars and anxiety coming from the German political scene. Key support was broken and the pair reached its lowest point in 5 weeks.

1vpfaaM.jpg

Technical Outlook

After a very small bounce at 1.1840 support, the pair broke the level and moved lower, approaching the minor support around 1.1775. This is not a key level but combined with the oversold position of the Relative Strength Index and the Stochastic, it might trigger a bounce higher. It must be noted that yesterday’s move established the first lower low after a long while and this is a sign that the long term uptrend (seen on Daily charts) has weakened. After a potential retracement north, the pair will be likely headed towards 1.1700 zone.

Fundamental Outlook

At 12:30 pm GMT the US Durable Goods Orders come out, showing changes in the total value of orders for goods with a life expectancy of at least 3 years. Higher values suggest increased economic activity (producers will increase activity to fill the orders) and usually strengthen the US Dollar but to a limited extent (medium impact). The forecast is a change of 1.1% from the previous -6.8%.


GBP/USD

US Dollar strength was seen against the Sterling as well yesterday and the pair broke the important level at 1.3450, as well as the 50 period Exponential Moving Average, setting the stage for a stronger move south.

nlJCxCo.jpg

Technical Outlook

After a small bounce, the pair moved out of the horizontal channel, breaking the confluence zone represented by 1.3450 support and the 50 EMA. This shows that the US Dollar is gaining momentum and makes the short term bias bearish. The pair seems headed towards the next target, located at 1.1330 but it is clear that price is in an uptrend from a longer term perspective so most likely we will see moves to the upside in the future. A quick move above 1.3450 and the 50 EMA would suggest that the initial break of support was fake and would invalidate the bearish scenario.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for today, so the pair’s direction will be decided by the technical aspect and the U.S. economic data.

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FOREX NEWS: FULL DAY AHEAD: GERMAN INFLATION, U.S. GDP AND MARK CARNEY’S SPEECH


EUR/USD


Forex News: The US Dollar posted another win over the Euro in yesterday’s trading session, by breaking 1.1775 minor support and approaching the more important level at 1.1713. Part of the greenback’s strength was due to a better than expected reading for the U.S. Durable Goods Orders.

jrdqAbY.jpg

Technical Outlook

The balance of power is clearly tilted towards the US Dollar but from a longer term perspective (daily charts), the pair is still in an uptrend (it must be noted that the uptrend is now weakened, as the pair has moved below the 50 days EMA). This uptrend combined with the oversold position of the Relative Strength Index and the long wicks of the last few candles, suggests that we are likely to see a bounce higher from the current support zone at 1.1713 – 1.1700. We have important data coming out today and this will play a big role for direction.

Fundamental Outlook

At 12:00 pm GMT the German Preliminary Consumer Price Index comes out, showing changes in the price that German consumers pay for the goods and services they purchase. The CPI acts as the main gauge of inflation and higher numbers usually strengthen the Euro.

At 12:30 pm GMT the U.S. Final Gross Domestic product will be released and expected to show a reading of 3.0%, same as previous. This is the main gauge of economic performance, thus higher numbers usually generate strength for the US Dollar.


GBP/USD

Yesterday the pair remained below the previous support at 1.3450 and below the 50 period Exponential Moving Average for the entire trading session but in the afternoon some of the gains were erased and small bounces occurred.

tLAq3Bi.jpg

Technical Outlook

Yesterday’s price action shows that the break of 1.3450 support wasn’t fake, so now we can expect to see a longer period of downside movement, with 1.3300 as first target. The break of the confluence zone (1.3450 and the 50 period EMA) is an important victory for the bears but there’s still enough buying pressure in the market so we cannot rule out a re-test of 1.3450 or even a break.

Fundamental Outlook

At 8:15 am GMT, BOE Governor Carney will deliver an opening speech in London at the Bank of England's conference celebrating 20 years of independence. As a rule of thumb, all speeches of heads of central banks should be treated with caution but of course the exact impact is not known.

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FOREX NEWS: BULLISH PRESSURE MOUNTS AHEAD OF EUROPEAN CPI


EUR/USD


Forex News: The German Preliminary CPI came out as expected, showing a change of 0.1% and the United States Final GDP posted a change of 3.1%, slightly higher than the forecast 3.0%. However, the data wasn’t a strong market mover and the pair climbed mostly on technical reasons.

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Technical Outlook

The Relative Strength Index and the Stochastic were oversold and price came very close to 1.1713 support. Also, the pair is still in an uptrend from a Daily chart perspective so all these reasons contributed to a bounce at support. The current move will likely retrace to re-test the level at 1.1775; if the level holds and turns into support, we will probably see an extended move north, with 1.1840 as first target. We don’t expect significant moves above 1.1840 unless surprising developments take place. If the pair moves below 1.1775, we expect a move into 1.1713 – 1.1700.

Fundamental Outlook

The European Flash Estimate Consumer Price Index will be today’s highlight for the Euro. This is the main gauge of inflation and usually has a high impact on the single currency, with higher numbers strengthening it. The time of release is 9:00 am GMT and the expected change is 1.6% compared to the previous 1.5%.


GBP/USD

The pair approached 1.3330 support but the bears ran out of steam and the Pound erased the previous losses, climbing into 1.3450 resistance. Mark Carney’s speech did not create huge volatility and went mostly unnoticed.

NWqkQrH.jpg

Technical Outlook

The pair is facing an important hurdle represented by the resistance at 1.3450 and the 50 period Exponential Moving Average. If this confluence zone is broken, it will show that the Pound is regaining its previous strength and would also indicate that we are headed into higher territory. On the other hand, a bounce lower from here will make 1.3330 the first target.

Fundamental Outlook

The Final version of the British GDP will be released today at 8:30 am GMT, and expected to show a 0.3% change, same as previous. This is the last version and thus it tends to have the lowest impact but it’s an important indicator nonetheless so it shouldn’t be overlooked.

At 2:00 pm GMT BOE, Governor Mark Carney will deliver closing remarks at the Bank of England's conference celebrating 20 years of independence. Considering that yesterday’s opening speech didn’t create huge volatility, probably the same will happen today but of course, this kind of speeches should always be treated with caution.

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FOREX NEWS: BREAKOUTS IN THE MAKING. MANUFACTURING DATA EYED FOR NEXT DIRECTION

EUR/USD

Forex News: Friday the pair continued higher above 1.1775 and approached the 50 period Exponential Moving Average despite a weaker than anticipated Eurozone Consumer Price Index. Overall price action was choppy and volatility was relatively low.

d70VUyO.png

Technical Outlook

The latest bullish impulse lacks strong momentum and candles are showing long wicks, which is a sign of indecision. That being said, it is very possible to see a climb into the confluence zone created by the 50 period EMA and the horizontal resistance at 1.1840 but it will be tough for the Euro bulls to punch through that mark. We expect to see a bounce lower from 1.1840 but overall, volatility will probably remain low.

Fundamental Outlook

The U.S. Manufacturing PMI is today’s only highlight in terms of economic releases. This is a survey of purchasing managers from the Manufacturing sector that tries to gauge their opinions about business conditions and overall health of the sector. The time of release is 2:00 pm GMT and the expected reading is 57.9; higher numbers are beneficial to the US Dollar but the impact is medium.


GBP/USD

The first part of Friday’s trading session was bearish, with the pair descending into the support at 1.3350. The British GDP numbers came out below expectations, contributing to the initial drop but the pair recovered in the second part of the session.

yzCpCQs.png

Technical Outlook

Price is trapped between the 50 period Exponential Moving Average and the support at 1.3350. This is a relatively tight range and today we expect a breakout but the direction is not clear. However, rejection is clearly seen at support (two candles with long lower wicks) and the pair is in an uptrend from a longer term perspective, so the balance is slightly tilted towards the bulls.

Fundamental Outlook

The British Manufacturing PMI is scheduled for release at 8:30 am GMT and expected to show a figure of 56.3. Same as the U.S. PMI discussed earlier, this survey acts as a gauge of optimism and economic health, with higher numbers being beneficial for the currency.

Edited by GDMFX

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FOREX NEWS: GERMANY CELEBRATES UNITY DAY. IRREGULAR VOLATILITY EXPECTED

EUR/USD

Forex News: Yesterday the pair showed surprisingly high activity, characterized by bearish momentum and a clear break of 1.1775. The U.S. Manufacturing Index showed a better than anticipated reading but the release wasn’t the main reason for the drop.

 

YF5foPG.png

 

Technical Outlook

The strong move through 1.1775 indicates that price is likely to continue on a downward path, at least until 1.1713 – 1.1700 is reached and we expect that to happen today. It’s very possible to see a re-test of the recently broken level at 1.1775 but as long as that level remains intact, the bias remains negative. A break of the mentioned support would further solidify the control of the bears for the medium term.

 

Fundamental Outlook

German banks will be closed today in celebration of German Unity Day and no major economic data will be released. The United States economic calendar is also light, meaning that we will probably have a slow trading session.

 

 

GBP/USD

The British Manufacturing PMI came out below expectations, a fact which triggered a downslide below 1.3350 and very close to the support at 1.3250. Overall yesterday was a strongly bearish session, with the sellers in almost complete control.

 

Es5g4lr.png

 

Technical Outlook

Yesterday the pair showed strong bearish momentum, advancing more than 100 pips to the downside but sharp moves are usually followed by a retracement or at least a period of sideways movement. On top of that, the Relative Strength Index is now oversold and the pair has reached a support level at 1.3250. All these factors point towards a potential bounce higher but even if this is true, we don’t expect to see a move above 1.3350 because the current bias is bearish.

 

Fundamental Outlook

At 8:30 am GMT the British Construction PMI will be released, showing the opinions of purchasing managers from the Construction sector about business conditions and the health of said sector. The survey has a medium impact, but higher numbers usually strengthen the Pound; the expected reading for today is 51.2.

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FOREX NEWS: US DOLLAR IN THE LIMELIGHT: FIRST LOOK AT UNITED STATES EMPLOYMENT

EUR/USD

 

Forex News: Yesterday the pair bounced higher after an initial break of 1.1713 support. Most of the session was bullish but this behaviour was somewhat expected.

 

nUw0164.png?1

 

Technical Outlook

 

After the bounce at 1.1713 – 1.1700, the pair climbed but encountered resistance at 1.1775. The Relative Strength Index was oversold, which was an early warning that a move like this will soon follow but the overall bias remains bearish and we expect to see a bounce lower from the current level. If this resistance is broken, the pair will probably climb into the 50 period EMA but a lot will depend on the economic data released today.

 

Fundamental Outlook

 

Today at 12:15 pm GMT we take a first look at the jobs situation in the United States with the release of the ADP Non-Farm Employment Change. The report tracks changes in the number of employed people, excluding the farming sector and Government. The impact is lower than the NFP released Friday but higher numbers than the anticipated 151K strengthen the US Dollar nonetheless.

 

At 5:15 pm GMT, ECB President Mario Draghi will deliver opening remarks at the Inauguration of the ECB Visitor Center. Two hours later, at 7:15 pm GMT, Fed Chair Janet Yellen will deliver a speech at a community banking conference hosted by the Federal Reserve Bank of St. Louis. These speeches may have little impact but on the other hand, they could generate increased volatility, so caution is recommended.

 

GBP/USD

The British Construction PMI came out below market expectations but this didn’t do much for the bears and the pair failed to break 1.3250, instead moving almost sideways, a behavior normal after a big drop.

 

KAJv1Sy.png?1

 

Technical Outlook

The Relative Strength Index is still in oversold territory and the support at 1.3250 proved strong yesterday although it was breached on several occasions. The pair still needs to move higher before more significant advances south will take place but unless surprises happen, the level at 1.3350 will not be breached today. If a bounce up takes place, 1.3300 is a good psychological level from where downside movement may resume. A break of 1.3250 will make 1.3160 the first target.

 

Fundamental Outlook

The British Services PMI is today’s only highlight, scheduled at 8:30 am GMT. This is a survey of purchasing managers that tries to gauge their opinions about business conditions in the sector and usually has a medium-to-low impact in the Pound. Today’s expected reading is 53.3 and higher numbers are beneficial for the currency.

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FOREX NEWS: RANGE-BOUND TRADING LIKELY COMING TO AN END. BREAKOUTS IMMINENT

EUR/USD

Forex News: The pair had a slower day than expected, mostly because the U.S. employment numbers came very close to analysts’ forecast. Price remained close to 1.1775 resistance, without a clear bias.

gxn8tu0.jpg?1

Technical Outlook

The pair shows some rejection around 1.1775 and the medium term bias is bearish, so this points toward a bounce from resistance and a move into the support at 1.1713 – 1.1700. If the pair moves above 1.1775, it will encounter the 50 period Exponential Moving Average, which is another place where downside movement may resume. A break of these two resistance levels would show that bullish pressure is increasing and would make 1.1840 the first target.

Fundamental Outlook

We have a relatively slow day ahead, with the most notable highlight being the release of the U.S. Factory Orders, which is an indicator that shows the change in the value of orders placed with manufacturers. A higher number suggests increased economic activity and usually strengthens the greenback but the impact is often low. The time of the release is 2:00 pm GMT and the expected change is 1.0% (previous -3.3%).
 
GBP/USD

The Pound-Dollar had a very slow day, hovering near the support at 1.3250 for the entire session. The British Services PMI showed a value slightly above expectations but it wasn’t enough to generate strong movement.

JGpCDen.jpg?1

Technical Outlook

Yesterday’s price action doesn’t hold any clues for today’s direction but we still consider that a stronger retracement to the north is needed before 1.3250 can be broken. The first upside barrier is the psychological resistance at 1.3300, followed by 1.3350 and the 50 period Exponential Moving Average; these are good places where bearish movement may resume but it’s also possible to see a break of 1.3250 before these marks are hit.

Fundamental Outlook

The Pound will not be affected by important economic releases today, so the technical aspect will be the main factor that will decide the pair’s direction.

 

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FOREX NEWS: US DOLLAR GAINS MOMENTUM. NON-FARM PAYROLLS EYED FOR NEXT MOVE


EUR/USD

Forex News: Yesterday the pair failed to break the resistance at 1.1775 and bounced lower as a consequence, reaching the target at 1.1713. The U.S. economic data released during the day was positive, thus aiding the drop.

 

D14uakH.jpg?1

Technical Outlook

Currently the pair is testing the support zone between 1.1713 – 1.1700, fuelled by a positive US Dollar sentiment. From a short-to-medium term perspective price is in a range, and it bounced many times from this zone, so we cannot rule out another rejection. However, the technical side will be overshadowed by the fundamental today and we expect to see choppy/ranging price action until the NFP release. If the current support is broken, the next target will become 1.1660, followed by 1.1600 and to the upside 1.1775 remains first resistance.

Fundamental Outlook

At 12:30 pm GMT the U.S. Non-Farm Payrolls report, which is considered the most important employment data in the U.S., will be released. The report shows changes in the total number of employed people, excluding the farming industry and usually has a very high impact on the greenback, mostly because consumer spending is directly correlated with employment. The expected change is 82K (previous 156K) and higher numbers are beneficial for the economy.
 
GBP/USD

The Pound dropped again yesterday, mostly on rumours that British Prime Minister May will be asked to resign her position. Two support levels were broken and the bears remained in control throughout the day.

0wZVRSq.jpg?1

Technical Outlook

The recent drop was fuelled by fundamental reasons but from a technical point of view, the Relative Strength Index is oversold, suggesting that a climb will soon follow, with increased chances of that happening if 1.3100 is reached. However, today’s price action will also be affected by the important NFP release, so the technical side will remain secondary.

Fundamental Outlook

There are no scheduled economic releases for today but any news coming from the British political scene will probably have a high impact on the Pound. Also, the U.S. employment data will have a direct impact on the pair.

Edited by GDMFX

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FOREX NEWS: US DOLLAR VULNERABLE AFTER DISAPPOINTING NFP NUMBERS. UPSIDE PRICE ACTION TO FOLLOW


EUR/USD


Forex News: Friday, after an initial drop below 1.1700, the pair started to climb, mostly on US Dollar weakness triggered by the disappointing Non-Farm Payrolls report. Overall price action was choppy and volatility remained low until the NFP release.

o1xGqV0.jpg

Technical Outlook

The current move up may extend into the 50 period Exponential Moving Average because the US Dollar is affected by worse than expected employment data but we don’t expect to see a move above the 50 EMA or above 1.1775. To the downside 1.1700 is the first barrier but the overall picture is unclear and we may get a ranging session due to the lack of economic releases.

Fundamental Outlook

Today United States banks will be closed in observance of Columbus Day and no major economic data will be released. On the Euro side we don’t have anything important either and this will probably contribute to a slow day.


GBP/USD

Although the US Dollar suffered from a disappointing NFP report, the Pound couldn’t erase the previous losses and instead the pair just paused from the drop seen throughout last week.

QzZFmkN.jpg

Technical Outlook

The last few candles are showing long wicks in their lower side and the pair is clearly oversold, as indicated by the Relative Strength Index which has been moving below its 30 level for quite a long while. Today we expect to see a climb into the previous support at 1.3100, which has now turned into resistance but overall we may see a ranging session, with price trapped between 1.3100 and 1.3000.

Fundamental Outlook

The United Kingdom didn’t schedule any important economic releases for the day so the technical side will probably decide direction.

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FOREX NEWS: POUND IN THE SPOTLIGHT: BRITISH MANUFACTURING AND GDP NUMBERS


EUR/USD


Forex News: The pair remained in a relatively tight range yesterday and no special developments took place, mostly because the economic calendar lacked any important announcements.

cytAg1G.jpg

Technical Outlook

Price is still trading below the 50 period Exponential Moving Average and above the support at 1.1700, which puts the pair in a range from a short term point of view. Today we expect to see a break of either one of these technical levels and the direction of the break will probably decide the direction for the day. Overall price is still making lower highs and lower lows, so we favour the short side as long as price is below the 50 EMA.

Fundamental Outlook

The ECOFIN Meetings will start today, attended by Finance Ministers from the EU member states. The Meetings are closed to the press but a formal statement will be released at the end of the day and sometimes participants talk to reporters during the day. Usually the Meetings don’t have a huge market impact but caution is recommended nonetheless.


GBP/USD

The pair had a bullish day, with price climbing above 1.3160 and then returning below the level. The move was mostly caused by the overextended condition of the pair.

S3ULSib.jpg

Technical Outlook

Yesterday we saw a retracement that is normal after the strong drop seen during the past week, but the overall direction remains down and we expect to see a bounce from the current level. As an alternate scenario, the move up may continue and reach the 50 period Exponential Moving Average but we don’t expect a break.

Fundamental Outlook

The British Manufacturing Production will be the day’s highlight, scheduled for release at 8:30 am GMT. The indicator shows changes in the total value of goods produced by manufacturers and usually has a hefty impact on the Pound, with higher numbers strengthening it. The expected reading is 0.3% compared to the previous 0.5%.

At 12:00 pm GMT the National Institute of Economic and Social Research (NIESR) will release a GDP Estimate and although this is not Government data, it can have a notable impact on the Pound. The previous estimate was 0.4% and higher numbers strengthen the currency.

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FOREX NEWS: ALL EYES ON THE US DOLLAR FOR THE FOMC MEETING MINUTES


EUR/USD


Forex News: Yesterday the pair climbed above the 50 period Exponential Moving Average, extending the bullish move and printing a higher high. Overall price is still in a range but with a bullish bias.

tO35Y29.jpg

Technical Outlook

The move above the 50 EMA will probably bring in additional buyers, taking the pair into the resistance zone around 1.1840. If the pair does reach that mark, we expect to see a move south but as long as price stays above the 50 EMA, our short term bias is bullish. The balance of power will tilt towards the bears if price descends below 1.1775 and below the Moving Average.

Fundamental Outlook

At 6:00 pm GMT the FOMC will release the Minutes of their latest rate Meeting and some hints about a future rate hike are expected. If the document will reveal that the Fed is preparing to hike one more time this year, the US Dollar will probably respond by strengthening.


GBP/USD

Yesterday price climbed above 1.3160, partly due to better than expected British Manufacturing numbers. The pair is approaching the 50 EMA but the move lacks strong momentum.

UvPsTr7.jpg

Technical Outlook

The first destination for the pair seems to be the 50 EMA, followed soon after by the resistance at 1.3250. If the 50 EMA holds, we expect to see a drop through 1.3160 and closer to 1.3100 but otherwise, 1.3250 will become the first target, which if surpassed, will open the door for further upside movement. The FOMC Meeting Minutes released today will be a deciding factor for price direction.

Fundamental Outlook

There are no economic releases scheduled for the Pound today so all eyes will be on the US Dollar for the FOMC Minutes release.

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FOREX NEWS: FED OFFICIALS FEAR LOW INFLATION. ANOTHER HIKE THIS YEAR STILL POSSIBLE


EUR/USD


Forex News: The pair continued on a bullish path before the FOMC Meeting Minutes release, which revealed that some Fed officials fear that low inflation is not “only transitory”. The greenback weakened at the time of the release but volatility remained relatively normal.

Kt5EojA.jpg

Technical Outlook

It looks like the Dollar’s next move will be decided by inflation data but for the time being, the American currency lacks strength and the pair is climbing. However, price is currently at a resistance zone created by 1.1840 and 1.1875, with the Relative Strength Index in overbought territory. This calls for a bounce lower, which will probably occur once 1.1875 is hit. As long as the mentioned level remains intact, our bias is bearish, expecting a bounce lower.

Fundamental Outlook

The U.S. Producer Price Index will be today’s most notable release for the US Dollar, scheduled at 12:30 pm GMT. The indicator tracks changes in the price that producers charge for their goods and it has inflationary implications because a higher producer price usually leads to a higher consumer price. Today’s expected change is 0.4% (previous 0.2%) and numbers above forecast strengthen the greenback.

At 2:30 pm GMT, ECB President Draghi will speak about monetary policy in Washington DC, at the Peterson Institute for International Economics. The impact cannot be anticipated but caution should always be used when heads of central banks speak publicly.


GBP/USD

The pair remained in a range for most of yesterday’s trading session and the FOMC Minutes created a small climb due to US Dollar weakness. Overall no special developments took place and price action was slow.

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Technical Outlook

Currently the pair is drifting without clear direction, meaning that we can see either a move up or down. The 50 period Exponential Moving Average is also flat, adding to the uncertainty, so until we see a clear break of 1.3250 or 1.3160, our bias is neutral. The Relative Strength Index is not showing an overextended condition but the Stochastic is overbought and crossing down; this is not a strong bearish signal but combined with the inability to move above the 50 EMA, it may suggest that lower prices will follow.

Fundamental Outlook

The Pound has another light day ahead, so the technical aspect and the U.S. data will be the main price drivers.

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FOREX NEWS: U.S. INFLATION EYED FOR NEXT MOVE. POSSIBLE RATE HIKE IMPLICATIONS


EUR/USD


Forex News: After reaching the resistance at 1.1875, the pair bounced lower, due to the technical reasons outlined yesterday but also due to upbeat US Dollar sentiment triggered by positive economic data.

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Technical Outlook

The overbought condition of the Relative Strength Index combined with the resistance level at 1.1875 generated a bounce lower, which is likely to extend into the 50 period Exponential Moving Average. However, if price returns above 1.1840, we will most likely see another test of 1.1875 but we don’t expect major advances north until a deeper retracement occurs.

Fundamental Outlook

Today we have two very important releases scheduled at 12:30 pm GMT: the U.S. Consumer Price Index (expected change 0.6%) and the U.S. Retail Sales (expected change 1.7%). The former is the main gauge of inflation and is especially important now because some Fed officials see inflation as too low and this could potentially affect their decision to hike later this year.

Sales made at retail levels represent the major part of consumer spending and in turn, a big part of overall economic activity, thus higher numbers usually strengthen the currency.


GBP/USD

The Pound weakened during yesterday’s session on concerns that Brexit negotiations are not going as smooth as they should and this combined with positive U.S. data triggered a drop below support.

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Technical Outlook

The pair broke 1.3160 and now it looks like it’s testing the level from below. If price remains below 1.3160 and below the 50 period Exponential Moving Average, we expect to see a move into 1.3100. The oscillators are starting to gain downside momentum and the Pound is affected by Brexit negotiations, so the bias is negative but a lot will depend on the U.S. data released throughout the day.

Fundamental Outlook

The economic calendar for the Pound is light today, without any major releases, so the technical aspect and the U.S. data will be the main price drivers.

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FOREX NEWS: U.S. INFLATION DISAPPOINTS, US DOLLAR STILL RESILIENT


EUR/USD


Fores News: The pair spiked higher Friday when the U.S. Consumer Price Index showed a value below expectations. However, most of the US Dollar losses were soon erased and the pair finished the week below resistance.

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Technical Outlook

As long as the pair is trading above the 50 period Exponential Moving Average, the bias is still bullish but it must be noted that recently the resistance at 1.1875 was touched twice and each time price dropped. This shows that bearish pressure is increasing and the bulls lack the necessary strength to take price higher, at least for the time being. If resistance is not broken early in the session, we expect a drop through the 50 EMA and into 1.1775.

Fundamental Outlook

The day’s only notable release is the Empire State Manufacturing Index, which is a survey of about 200 manufacturers from the New York state. The respondents are asked to rate the level of business conditions and the survey acts as a leading indicator of optimism and economic health. The time of release is 12:30 pm GMT and the expected reading is 20.3 but the survey has a limited impact.


GBP/USD

The pair showed choppy price action Friday and ended the session close to where it started it. The US Dollar weakened at the time of the CPI release but erased most of the losses soon after. 

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Technical Outlook

Friday the bulls attempted to take price higher but failed and this resulted in a candle with a long upper wick, which is a sign of rejection, so we expect a move lower for today. However, the pair will most likely remain between the resistance at 1.3350 and the support at 1.3250 for the entire trading session or at least for a big part of it.

Fundamental Outlook

The Pound has a light economic calendar today, so the technical aspect will decide the pair’s direction. The lack of economic data releases may also trigger a slow day.

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FOREX NEWS: FULL DAY FOR THE POUND: INFLATION DATA AND BOE GOVERNOR’S TESTIMONY


EUR/USD


Yesterday the pair moved below the 50 period Exponential Moving Average and approached the support at 1.1775 but overall the session was pretty slow. The Empire State Manufacturing Index posted a value of 30.2, higher than the expected 20.3 and this helped the US Dollar to some extent.

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Technical Outlook

Although the pair descended below the 50 EMA, it lacks momentum and seems like neither side is in control. However, if the support at 1.1775 is not broken soon, this will show that the balance is tilting towards the bulls and 1.1840 will become the first target. Until an important level is broken, our view is mostly neutral.

Fundamental Outlook

The German ZEW Economic Sentiment will be released today at 9:00 am GMT and will show the opinions of about 300 German professional analysts and investors regarding a 6-month economic outlook for the German economy. Usually a higher number than the expected 20.3 is beneficial for the Euro but the impact is often low if the actual number matches the forecast.


GBP/USD

The pair remained in a tight range for most of yesterday’s trading session mostly due to the lack of economic data releases for the Pound.

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Technical Outlook

Although yesterday the pair moved sideways for the most part of the session, in the afternoon we saw a drop into 1.3250 and into the 50 EMA, followed by a bounce higher. This shows that 1.3250 is still a good support level, thus a break will show increased bearish pressure. As long as the pair is trading between 1.3250 and 1.3350, our bias is neutral but a lot will depend on the British economic data.

Fundamental Outlook

Today is an important day for the Pound, due to the release of the British Consumer Price Index, which is the main gauge of inflation and is closely watched by the BOE when deciding interest rate changes. The time of release is 8:30 am GMT and the expected reading is 3.0% (previously 2.9%). Higher numbers usually strengthen the Pound because high inflation eventually leads to a rate hike.

At 10:15 am GMT, BOE Governor Mark Carney will testify in London, before the Treasury Select Committee. This testimony may have a strong impact on the Pound, so we recommend caution until volatility settles down.

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FOREX NEWS: US DOLLAR REGAINS ITS SWAGGER. SUPPORT BROKEN AND LOWER PRICES TO FOLLOW


EUR/USD


Forex News: The Euro weakened yesterday after a disappointing German ZEW survey and this allowed the pair to break support and to move south for almost the entire trading session.

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Technical Outlook

The pair is trading below the 50 period Exponential Moving Average and below 1.1775 so the short term outlook is bearish, making us anticipate a move closer to 1.1700. However, it must be noted that the last few candles are showing long wicks in their lower part and the Relative Strength Index is approaching oversold, which are signs of rejection. This means that the pair will probably retrace higher before reaching 1.1700 but as long as it remains below the 50 EMA, the bias is bearish.

Fundamental Outlook

At 8:10 am GMT, ECB President Mario Draghi will deliver opening remarks at the ECB Conference held in Frankfurt. The impact on the currency will depend on his attitude and matters discussed but cannot be anticipated beforehand. However, volatility is likely to surge and caution is always advised when heads of central banks speak publicly.

At 12:30 pm GMT the U.S. Building Permits will be released, showing how many construction permits for residential buildings were released during the previous month. This is a gauge of future construction activity and usually the greenback is positively affected by a number above forecast, which for today is 1.25 Million (annualized number).


GBP/USD

The Pound pushed slightly higher at the time of the British CPI release (3.0% change, as anticipated) but it came under heavy selling pressure and dropped for more than 100 pips, breaking the key handle at 1.3250. 

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Technical Outlook

The pair broke with ease the confluence zone created by 1.3250 and the 50 period EMA, showing increased bearish pressure. However, at the time of writing, the drop is showing rejection at 1.3160 so a move up cannot be ruled out. That being said, our bias remains bearish as long as price is trading below the 50 EMA and below 1.3250, so we expect a drop to 1.3100 or even lower.

Fundamental Outlook

The main event for the Pound today will be the release of the Average Earnings Index, which shows changes in the price that employers pay for labour. Higher wages lead to increased consumer spending and this in turn strengthens the Pound, so the indicator has a hefty impact. The time of release is 8:30 am GMT and the expected change is 2.1%.

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