Gdmfx - Daily News

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FOREX NEWS: OVERSOLD LEVELS WARN OF POTENTIAL PULLBACKS. GERMAN CPI IN THE SPOTLIGHT


EUR/USD

Forex News: Friday’s trading session belonged to the bears and the pair continued on a downward path. The U.S. Advance GDP posted a value above expectations (actual 3.0%, forecast 2.6%) and this contributed to the drop.



Technical Outlook

The pair broke out of the range that it was in and the bias is clearly bearish but strong moves usually retrace after the initial momentum fades. Also, the Relative Strength Index is oversold and moving up and all this means that we will probably see a bounce above 1.1610. Once this retracement completes, we expect the bears to step in again, taking price at least into 1.1575.

Fundamental Outlook

The German Preliminary Consumer Price Index will be today’s main event, showing changes in the price that Germans pay for the goods and services they purchase. This is the main gauge of inflation and the German economy accounts for a major part of the entire Eurozone economy, so we can expect a hefty impact on the currency, with higher numbers strengthening it. The forecast is 0.1% and the time of release is 1:00 pm GMT.


GBP/USD

The US Dollar was boosted Friday by the better than expected U.S. Gross Domestic Product and the pair continued lower, breaching support. Later in the day we saw a bounce up, generated in part by profit taking.



Technical Outlook

Although the latest momentum is bearish, the pair is not in a downtrend and the support at 1.3100 is not broken. This suggests that price will probably continue upwards until 1.3160 is reached and possibly into the 50 period EMA but as long as these two resistances remain intact, our bias is bearish, anticipating a break of 1.3100.

Fundamental Outlook

The Net Lending to Individuals will be released today at 9:30 am GMT, and expected to show a reading of 5.5 Billion. The report shows changes in the total value of credit issued to individuals and has a positive impact on the Pound if it posts a higher than expected reading; however, the impact is usually low-to-medium.

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FOREX NEWS: PAIRS ON THE RISE, OVERALL BIAS STILL NEGATIVE


EUR/USD

Forex News: The Euro pushed the pair above immediate resistance yesterday, although the German CPI came out slightly below expectations. However, the move was mostly technical and was anticipated due to the oversold condition of the pair.



Technical Outlook

Even if yesterday the pair moved upwards, the strength still favours the bears and we expect to see a continuation of the move seen the other week. If price continues higher, the first resistance will be encountered at 1.1670 but the extent of the climb should be limited and there’s a great probability for price to fall through 1.1610 – 1.1600 and into 1.1575.

Fundamental Outlook

Today at 10:00 am GMT we take a look at Eurozone inflation with the release of the European Consumer Price Index but we don’t expect a huge impact mostly because the German CPI, which accounts for a big part of overall inflation, was already released yesterday. However, higher numbers than the forecast 1.5% will probably strengthen the single currency.

At 2:00 pm GMT the US Dollar will be affected by the Consumer Confidence, which is a survey that gauges consumers’ opinions regarding the overall economic situation. Higher numbers than the forecast 121.1 show optimism and usually strengthen the US Dollar but to a limited extent.


GBP/USD

Yesterday’s session was controlled by the bulls, who managed to take the pair above the resistance at 1.3160 and above the 50 period EMA. The move was mostly technical and was predicted by the failed break of 1.3100.



Technical Outlook

As mentioned before, the pair is not in a downtrend and all moves in one direction are reversed, which is a characteristic of a ranging market. If the buyers can maintain the pair above the 50 period EMA, we will probably see a move into 1.3280 resistance but a quick move below the EMA and below 1.3160 would show that the balance of power is tilting towards the short side, so we will probably see another attempt to break 1.3100.

Fundamental Outlook

There’s nothing major on the Pound’s calendar for today, so the pair’s direction will be decided by the U.S. data and the technical aspect.

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FOREX NEWS: US DOLLAR IN THE LIMELIGHT: FOMC RATE STATEMENT AND FIRST LOOK AT EMPLOYMENT DATA


EUR/USD

Forex News: The pair remained relatively quiet for the most part of yesterday’s trading session and no special developments took place. The U.S. Consumer Confidence survey posted a value above expectations but the impact was low.



Technical Outlook

The move up seen this week is still considered a normal retracement after a strong drop that took the Relative Strength Index into oversold territory. Our bias remains bearish as long as the pair is still trading below the 50 period Exponential moving Average but we don’t exclude a climb into 1.1670; however, the pair’s direction will be heavily affected by the fundamental side today.

Fundamental Outlook

At 12:15 pm GMT we take a first look at U.S. employment data with the release of the ADP Non-Farm Employment Change, which is a report that tries to mimic the more important Non-Farm Payrolls released by the Government Friday. The forecast is 191K and usually a higher change has a positive impact on the US Dollar.

Later in the day, at 6:00 pm GMT the FOMC will issue their Rate Statement, containing the rate decision and the reasons that determined it. No rate change is expected for today but if we will get any hints about the timing of the next hike, the US Dollar will probably have a strong reaction, so caution is advised.


GBP/USD

The pair continued higher yesterday, mostly backed by increased demand for the Pound due to rate hike expectations. Price remained above the 50 period EMA and pushed towards the resistance at 1.3280.



Technical Outlook

It’s very likely to see a touch of 1.3280 resistance, based on the positive sentiment that’s currently surrounding the Pound. However, if the pair reaches that level, probably the Relative Strength Index will become overbought or will touch its 70 level and this will increase the chances of a bounce lower. Overall the pair is still in a range and today we have important data for both currencies, so the technical side will be somewhat secondary.

Fundamental Outlook

The British Manufacturing PMI will be released today at 9:30 am GMT, showing the opinions of about 600 purchasing managers from the manufacturing sector about overall economic conditions in said sector. A higher number than the expected 55.9 usually strengthens the Pound, taking the pair higher and the opposite is true for a lower number.

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FOREX NEWS: BANK OF ENGLAND EXPECTED TO HIKE. POUND LOADED AND READY TO SPIKE IN VOLATILITY


EUR/USD

Forex News: The pair remained relatively calm throughout yesterday’s trading session and the FOMC decided to maintain the rate unchanged as it was widely expected, so the impact was mild. However, price reached support on the back of upbeat information contained in the Rate Statement.



Technical Outlook

The pair has created short-time resistance around 1.1655 – 1.1660 and is now testing the support at 1.1610, with the oscillators showing a bearish bias. This means that the bullish pullback may be over and that we will see a break of the current support, followed by a move into the low at 1.1575; however, a bounce from 1.1610 – 1.1600 will most likely take the pair into the 50 period Exponential Moving Average. Our bias remains bearish and we consider the move up just a normal retracement after a big drop.

Fundamental Outlook

The U.S. Unemployment Claims will be today’s only highlight, scheduled at 12:30 pm GMT and expected to show a number of 235K. The indicator has a low-to-medium impact, mostly because it is released weekly so the changes are not significant; however, a higher number of unemployed individuals usually weakens the currency, due to consumer spending implications.


GBP/USD

Yesterday the Pound bulls took price above the resistance at 1.3280 on the back of a better than expected British Manufacturing PMI but the US Dollar made a comeback later in the session and brought the pair below the previously mentioned level.



Technical Outlook

Price shows rejection at 1.3320 and has moved below the previous resistance at 1.3280 after an overbought condition showed by the Relative Strength Index. These are clear bearish signs, which suggest that we will likely see an encounter with the 50 period Exponential Moving Average. That being said, today’s price action will be heavily affected by Bank of England’s rate decision, thus the technical aspect will be secondary.

Fundamental Outlook

Today is a huge day for the Pound, mainly because the Bank of England is expected to hike the interest rate from the current 0.25% to 0.50%. If this happens, we will likely see increased volatility and strength for the Pound.

The announcement is scheduled at 12:00 pm GMT and at the same time the BOE will release their Inflation Report, containing economic and inflation projections for the next 2 years. Half an hour later, at 12:30 pm GMT, BOE Governor Carney will hold a press conference, discussing the Inflation Report. This is another reason for increased volatility, so caution is strongly advised.

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FOREX NEWS: US DOLLAR PREPARES FOR THE BIGGEST RELEASE OF THE WEEK: U.S. NON-FARM PAYROLLS


EUR/USD

Forex News: The pair behaved erratically yesterday and dropped below 1.1600 support just to jump higher immediately after. Price remained below the 50 period Exponential Moving Average but this type of price action calls for caution.



Technical Outlook

The last candle seen on the chart shows that volatility is high but the market is still unsure about the next direction. As long as the pair is trading below the 50 period EMA and below the resistance zone between 1.1670 – 1.1700, our bias remains bearish but as mentioned before, caution is advised because a clear direction cannot be predicted. Also, today’s technical aspect will be secondary to the fundamental due to the important NFP release.

Fundamental Outlook

The main event of the day is without a doubt the release of the U.S. Non-Farm Payrolls, a report that shows changes in the total number of employed people, excluding the farming industry. This is widely regarded as the most important U.S. jobs data and has a strong impact on the greenback almost every time. Today’s release is scheduled at 12:30 pm GMT and the expected change is 311K (previous -33K); higher numbers usually strengthen the greenback and show increased economic activity.


GBP/USD

The Bank of England decided to hike the interest rate to 0.50% but this was somewhat priced into the market, so the Pound was more affected by the forward guidance offered by the Bank, saying that “very gradual” increases are expected.



Technical Outlook

The strong move seen yesterday and the break of 1.3100 support could mean that the ranging period is over and that we will see a more directional behaviour in the future. For the short term we expect to see a touch of 1.3030 support where a retracement will probably occur. Of course, the pair’s movement today will be heavily affected by the U.S. employment data.

Fundamental Outlook

At 9:30 am GMT the British Services PMI is released, showing the opinions of purchasing managers about business and economic conditions in the services sector. A higher number than the anticipated 53.3 usually strengthens the currency but the impact is mild if the actual number matches expectations.

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FOREX NEWS: US DOLLAR THREATENS SUPPORT DESPITE NFP COMING OUT BELOW EXPECTATIONS


EUR/USD

Forex News: The U.S. Non-Farm Payrolls released Friday failed to meet the market expectation of 312K but still showed a higher number than previous. This initially created a spike up, which was soon reversed and the pair ended the trading week on support.



Technical Outlook

Price action is choppy lately and the pair hasn’t made any clear moves after the drop into 1.1575. Currently it is stuck inside the horizontal channel created by 1.1610 support and 1.1670 resistance and until we see a clean break, we can expect more of the same choppy movement. However, the Euro bulls failed to take price above the 50 period EMA and the current momentum is bearish, with the US Dollar boosted by the Non-Farm Payrolls numbers. This makes us anticipate a break of current support, followed by a move into 1.1575. 

Fundamental Outlook

We don’t have anything of note on the economic calendar for the Euro and US Dollar today but the Eurogroup Meetings take place and this may be a reason for increased volatility. However the Meetings are closed to the press and usually don’t have a huge impact unless some important decisions are made.


GBP/USD

The pair spiked above 1.3100 Friday at the time of the NFP release but the gains were soon erased after the market digested the numbers, so the session ended below resistance, very close to the opening of the day.



Technical Outlook

There is still bearish pressure on the pair and rejection at 1.3100 resistance was clearly seen Friday, so for today we expect a touch of 1.3030 support but the oscillators are not showing enough bearish momentum (Stochastic is oversold, RSI is approaching that territory). This means that a touch of 1.3030 will be probably followed by a bounce up; if that level is breached, then 1.3000 will be the next place where the pair may start to move up. A break of these levels will probably trigger an extended period of downside movement and would mark the end of the ranging phase.

Fundamental Outlook

The Pound will not be affected today by economic data releases, so the technical aspect will be the deciding factor for the pair’s direction.

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FOREX NEWS: PAIRS DRIFTING WITHOUT CLEAR DIRECTION. ECB’S DRAGHI AND FED’S YELLEN SET TO DELIVER SPEECHES


EUR/USD

Forex News: Monday’s trading session had a bearish bias but overall action was slow and no major developments took place, mostly due to the lack of fundamental incentives.



Technical Outlook

Although price action was slow yesterday, the bears remained in control and took price close to the support located at 1.1575 but there’s an overall lack of conviction from both sides, so we may see a bounce higher when the pair will reach the support level mentioned earlier. The Relative Strength Index is approaching oversold, increasing the possibility of a move up. A clean break of 1.1575 would make 1.1480 the next target.

Fundamental Outlook

ECB President Mario Draghi will deliver opening remarks in Frankfurt at the ECB Forum on Banking Supervision, at 9:00 am GMT. Later in the day, at 7:30 pm GMT, Fed Chair Yellen will speak in Washington DC, accepting the Paul H. Douglas Award for Ethics in Government. We don’t expect these speeches to generate huge volatility because they are not directly related to monetary policy, but caution is advised nonetheless.


GBP/USD

The pair had a bullish bias yesterday and moved again above 1.3100 but at the time of writing price is still hovering near the level so a clear break hasn’t occurred. The economic scene lacked important releases so the move was mostly technical.



Technical Outlook

If the bulls can maintain price above 1.3100, we will most likely see a move into the 50 period Exponential Moving Average but as long as that line remains resistance, our bias is bearish. If the pair drops below 1.3100, we expect a touch of 1.3030 and possibly 1.3000. The Pound is still very vulnerable to any Brexit talks so it can jump or drop at any time and this makes the entire picture unclear.

Fundamental Outlook

The Pound will not be affected today by major economic data, so the technical aspect will decide the pair’s direction.

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FOREX NEWS: PAIRS ON THE DOWNSLIDE, AMID A LACKLUSTRE ECONOMIC ENVIRONMENT


EUR/USD

Forex News: The pair showed rejection at resistance yesterday and picked up speed, moving south and breaching the previous low at 1.1575. The move was mostly due to increased US Dollar demand, in absence of any notable economic data.



Technical Outlook

The pair breached the nearly 4-month low at 1.1575 and this will most likely generate additional selling pressure, taking price into the 1.1500 zone (psychological level), followed by 1.1480 (technical level). However, before those targets can be reached, we will probably see moves up, possibly a re-test of 1.1575 from below but at the time of writing this support is not clearly broken. The Relative Strength Index is approaching oversold territory and this may contribute to a bullish move.

Fundamental Outlook

Today’s economic calendar is lacklustre, without any notable releases, so the pair’s direction will be decided by the technical aspect unless surprise announcements occur.


GBP/USD

Yesterday’s trading session lacked major economic news but the pair showed relatively good momentum and erased a part of the move up seen Friday. Resistance is still holding and the pair is approaching support.



Technical Outlook

After moving slightly above the 50 period Exponential Moving Average and above 1.3160, price reversed, showing that we are not dealing with a true break of resistance. This means that today we will probably see a touch of 1.3100 support, where the next direction will be decided: a break will take the pair into 1.3030, testing the lower boundary of the range, while a bounce will make 1.3160 the target once more.

Fundamental Outlook

Similar to the other two currencies, the Pound will not be affected by economic data today so the main focus will be on the technical aspect.

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FOREX NEWS: RANGING PHASE IS APPROACHING AN END. PREPARE FOR STRONG BREAKOUTS


EUR/USD

Forex News: The choppiness continued yesterday and the pair drifted generally sideways. This was mostly due to a lackluster economic environment, without any important data releases.



Technical Outlook

After what appeared to be a break of 1.1575 support, the pair returned above the level and tested 1.1610 resistance where it turned down again. This type of behavior is characteristic to a ranging market where price bounces between support and resistance without clear direction. Until we get a clean breakout, our bias is mostly neutral, although slightly bearish as long as price is trading below the 50 period EMA.

Fundamental Outlook

At 10:00 am GMT the European Commission will reveal their Economic Forecasts for the next 2 years. The release is not known to create huge market volatility but if it’s more hawkish than expected, it generally boosts the Euro.

On the US Dollar’s side we have the Unemployment Claims, an indicator that shows how many people asked for unemployment related benefits during the last week. The time of release 1:30 pm GMT and the expected number is 232K; values above expectations usually weaken the US Dollar but the impact is limited.


GBP/USD

The pair took a bearish path yesterday after another attempt to move above 1.3160 resistance. The economic scene was calm, without any market moving releases.



Technical Outlook

Price is facing again the support at 1.3100 and this time we expect to see a break, followed by a move into 1.3030 and possibly 1.3000. We base this prediction mostly on the fact that the bulls tried to break 1.3160 twice and the pair created a double top just above the level, which is a sign that the buyers lack strength and that bearish pressure is increasing.

Fundamental Outlook

The National Institute of Economic and Social Research (NIESR) will release at 1:00 pm GMT an Estimate of the British Gross Domestic Product. The release usually has a low impact but considering the lack of major economic data this week, we may see a higher effect that usual. The previous estimate was 0.4% and numbers above it can strengthen the Pound.

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FOREX NEWS: EURO PUSHES ABOVE RESISTANCE, OVERALL PRICE ACTION STILL CHOPPY


EUR/USD

Forex News: The EU Economic Forecasts showed that growth is on the right track and this boosted the Euro during yesterday’s trading session, taking the pair above immediate resistance and above the 50 period Exponential Moving Average.



Technical Outlook

The pair continued its raging behaviour but broke above 1.1610 and above the 50 EMA, making the short term outlook bullish. If this bias continues, the pair will probably reach the top of the range, located at 1.1670 but it must be noted that although the last impulse is bullish, price is still not trending, in other words the next move is uncertain. A quick move below 1.1610 will bring the pair into the previous support at 1.1575.

Fundamental Outlook

Today U.S. banks will be closed in observance of Veterans Day and we expect this to affect volatility, especially in the NY session. The only notable release is scheduled at 3:00 pm GMT in the form of the University of Michigan Consumer Sentiment survey, which gauges the opinions of consumers regarding current and future economic conditions. Higher numbers than the anticipated 100.8 suggest that consumer spending is likely to pick up in the near future and this usually strengthens the US Dollar.


GBP/USD

The pair remained incredibly choppy during yesterday’s trading session and moved in a tight range, without a clear bias. The NIESR GDP Estimate was rescheduled for today so the pair wasn’t affected by economic data.



Technical Outlook

The type of price action seen lately doesn’t offer any hints for future direction but usually this type of tight and choppy movement is followed by a strong breakout. The direction of said breakout cannot be determined and will probably be influenced by the British economic data released today. The levels to watch remain 1.3100 as support and 1.3160 as resistance.

Fundamental Outlook

At 9:30 am GMT the British Manufacturing Production numbers come out, showing changes in the total value of goods generated by the Manufacturing sector. The anticipated change is 0.3% (previous 0.4%) and usually a higher number strengthens the Pound but the impact is limited if the actual reading matches the forecast.

As mentioned before, NIESR rescheduled for today the release of their GDP Estimate. The time is 1:00 pm GMT and the previous value is of course, unchanged at 0.4%.

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FOREX NEWS: BULLS MAKE A PUSH FOR RESISTANCE. MARKET STILL RANGE-BOUND


EUR/USD

Forex News: U.S. consumer sentiment data disappointed Friday, allowing the Euro bulls to take price above the 50 period Exponential Moving Average and into the resistance at 1.1670. The pair posted fresh weekly highs but it didn’t exit the ranging phase.



Technical Outlook

The latest impulse favours the buyers but in the past the pair had difficulties breaking the resistance around 1.1670 and now it’s facing the same level again. A long upper wick is clearly seen in Friday’s price action and this is a sign of rejection; also, the Stochastic is above its 80 level (overbought) and the Relative Strength Index is approaching overbought territory. All this could be indicative of a bounce lower from the current level and if this happens, the 50 EMA will be the first target, where the next direction will be decided. A move above 1.1670 will take price into 1.1700 but we don’t expect a break of that hurdle.

Fundamental Outlook

The economic calendar is light today for both currencies, without any notable releases, thus the technical aspect will decide market direction.


GBP/USD

British Manufacturing Production increased 0.7% as opposed to the expected 0.3% and this was one of the reasons for Friday’s climb. Price bounced lower late in the session but the short term bias favours the bulls.



Technical Outlook

Although the latest momentum is bullish, the pair is still in a range from a longer term perspective and this means that we could very well see a move down from the current resistance (1.3225). To the downside the first notable level is 1.3175 (previous resistance that may turn into support), followed by the 50 period Exponential Moving Average. We don’t expect huge moves today, unless something surprising happens. 

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected today by economic data releases and this may translate in a slow, ranging session.

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FOREX NEWS: HEADS OF CENTRAL BANKS GATHER FOR PANEL DISCUSSIONS. BREAKOUTS EXPECTED


EUR/USD

Forex News: The pair showed a ranging session yesterday, approaching the 50 period EMA and then bouncing higher, without enough force to break resistance. The lack of major economic releases contributed to the slow movement.



Technical Outlook

Price remains range-bound, capped to the upside by the resistance at 1.1670 and to the downside by the 50 Exponential Moving Average. Today we have a busier day, with more economic data than yesterday, so we expect to see a break of horizontal resistance (1.1670) or dynamic support (50 EMA) and the break will probably decide the direction for the day. As long as these technical indicators are intact, our bias is neutral.

Fundamental Outlook

At 10:00 am GMT the Flash version of the Eurozone GDP comes out, showing the overall performance of the economy. The expected change is 0.6%, same as previous and usually a higher number strengthens the Euro but to a limited extent.

At the same time the German ZEW Economic Sentiment survey is released, showing the opinions of about 300 German institutional analysts and investors about the state of the economy, as well as an outlook for the next 6 months. The forecast is 19.8 and higher numbers show optimism, thus strengthening the single currency.

At the same time, 10:00 am GMT, ECB President Draghi, Fed Chair Yellen and BOE Governor Carney will participate in a panel discussion named “At the heart of policy: challenges and opportunities of central bank communication”. The discussion will take place at the Central Bank Communications Conference hosted by the ECB, in Frankfurt and the impact cannot be predicted but caution is recommended.


GBP/USD

He Pound dropped early in yesterday’s trading session due to concerns that British Prime Minister May could be asked to step down by her own political party. After dropping below 1.3100 support the pair recovered some of the losses.



Technical Outlook

Although price moved above 1.3100 after initially breaking it, the short term momentum still favours the bears and for today we expect to see a break of 1.3100 and a consequent move into 1.3030. As an alternate scenario, if the pair breaks the 50 period EMA to the upside, it will probably move into the resistance at 1.3175.

Fundamental Outlook

The day’s main event for the Pound will be the release of the British Consumer Price Index, scheduled at 9:30 am GMT and expected to show a change of 3.1% compared to the previous 3.0%. This is the main gauge of inflation and is carefully watched by the Bank of England when deciding where to set the interest rate. Higher values usually strengthen the Pound.

BOE Governor Carney will participate in the panel discussion mentioned earlier and this can generate increased volatility on Pound pairs.

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FOREX NEWS: US DOLLAR UNDER HEAVY PRESSURE AHEAD OF INFLATION AND RETAIL SALES DATA


EUR/USD

Forex News: Selling pressure around the greenback increased yesterday and the pair broke above the resistance at 1.1670, a fact which triggered additional upside movement.



Technical Outlook

Yesterday the pair moved about 100 pips higher, which can be considered a huge move given the lack of volatility seen lately. Strong moves are usually followed by a pullback before price can advance further and this view is also supported by the fact that the Relative Strength Index and Stochastic are both overbought. After this potential retracement, we expect the upside movement to continue towards 1.1825 resistance but a lot will depend on the U.S. data released today.

Fundamental Outlook

It’s a big day for the greenback, with two important releases: the Consumer Price Index (CPI) and the Retail Sales, both scheduled at 1:30 pm GMT. The CPI shows changes in the price that consumers pay for the goods and services they purchase and acts as one of the main gauges of inflation. The forecast for today is 0.1% and higher numbers usually strengthen the currency. The CORE version of the indicator, which excludes food and energy from calculation will be released at the same time and expected to show a change of 0.2%.

The Retail Sales are expected to show a change of 0.0% from the previous 1.6% and because this is the main gauge of consumer spending, higher than anticipated numbers strengthen the US Dollar and the opposite is true for lower numbers.


GBP/USD

The pair remained relatively choppy yesterday, with some bearish movement generated by the worse than expected British CPI value (actual 3.0%, forecast 3.1%). Most of the action took place near 1.3100, without substantial developments.



Technical Outlook

Price action is choppy lately and all moves result in candles with long wicks, which is a clear sign of indecision. The ranging phase will continue until a breakout occurs. The levels to watch are 1.3100 (a break should be confirmed by a re-test), followed by 1.3030 to the downside. To the upside the 50 period Exponential Moving Average is the first potential resistance, followed by 1.3175.

Fundamental Outlook

At 9:30 am GMT the British Average Earning Index comes out, showing changes in the price paid by employers for labour. A higher number indicates that inflation may increase in the near future because if businesses pay higher labour costs, this will usually translate into a higher price paid by the consumer. Today’s forecast is 2.1%, while the previous was 2.2%.

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FOREX NEWS: US DOLLAR POSTS MINOR GAINS, POUND BOOSTED BY RETAIL SALES NUMBERS


EUR/USD

Forex News: The Final version of the Eurozone CPI matched analysts’ expectations yesterday so the release didn’t have a substantial impact and the pair showed choppy movement throughout the day, with a bearish bias.



Technical Outlook

The last few candles show very long wicks, especially in their upper part, which is a sign that bullish pressure is not yet high enough to resume the upwards movement. Today we may see a move lower, into the support at 1.1735 but overall the pair remains in a short term uptrend and the Relative Strength Index has cleared its overbought condition so after the retracement finds support, we will probably see a move up.

Fundamental Outlook

Today at 8:30 am GMT, ECB President Mario Draghi will deliver a speech at the Frankfurt European Banking Congress. The impact of the event cannot be anticipated but caution is always advised when heads of central banks speak publicly.

On the US Dollar side we have the Building Permits, scheduled at 1:30 pm GMT and expected to show a reading of 1.25 Million. The indicator shows the annualized number of construction permits and acts as a gauge of activity in the construction sector; numbers above expectations usually strengthen the greenback but the impact is medium.


GBP/USD

The British Retail Sales came out above expectations yesterday and this was the main reason for the climb seen early in the session. However, the pair remained in a range overall.



Technical Outlook

Price is currently testing 1.3175 from above and if this level will turn into support, rejecting the pair higher, then we will most likely see an encounter with the resistance at 1.3225. A break of that level would show that the pair is ready to exit the range that confined it during the last period, and head into 1.3280. As long as price is trading above the 50 EMA our bias is slightly bullish.

Fundamental Outlook

The Pound will not be affected by economic data today, so the main focus will be the technical side and the U.S. release mentioned earlier.

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FOREX NEWS: EURO IN THE SPOTLIGHT: ECB PRESIDENT DRAGHI TESTIFIES TWICE


EUR/USD

Forex News: Friday’s price action was characterized by a sharp climb that nearly touched 1.1825 resistance but soon after, the pair slowed down and consolidated below 1.1800. The U.S. construction data was better than anticipated but the impact was limited.



Technical Outlook

The pair has now printed a lower high and failed to break the resistance at 1.1825, which shows that upwards momentum is fading. This means that we will possibly see an encounter with Friday’s low at 1.1756 but overall today we expect the pair to remain between 1.1825 and 1.1756 support unless Draghi’s testimony offers surprises.

Fundamental Outlook

The day’s only notable event is the double testimony of ECB President Mario Draghi, before the European Parliament Economic and Monetary Affairs Committee. The topic is economy and monetary policy, so volatility is likely to increase during his speech, which is scheduled at 2:00 pm GMT.

Two hours later, at 4:00 pm GMT, the ECB President will testify again before the same Committee, but this time the topic will be the European Systemic Risk Board. Caution is advised during both speeches.


GBP/USD

The pair accelerated to the upside early during Friday’s session, only to drop abruptly soon after without apparent reason other than fresh sell orders.



Technical Outlook

Price is advancing higher but the pair is prone to sharp moves to either side. As long as 1.3175 support remains intact, the upside movement is likely to continue but overall we expect choppy price action. The levels to watch are Friday’s top at 1.3260 and the support mentioned earlier, together with the 50 period Exponential Moving Average.

Fundamental Outlook

The United Kingdom didn’t schedule any economic releases for today, so the technical side will take center stage.

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FOREX NEWS: POUND IN THE LIMELIGHT AS BOE GOVERNOR CARNEY TESTIFIES ON INFLATION AND ECONOMIC OUTLOOK


EUR/USD

Forex News: Price dropped very early during yesterday’s trading session but support pushed it higher and all losses were nullified. The Euro was initially unfazed by Draghi’s testimony, who mentioned that economic expansion is solid but was less hawkish about inflation.



Technical Outlook

After dropping into the confluence zone created by the 50 period Exponential Moving Average and the horizontal support at 1.1735, the pair bounced strongly to the upside, moving above the session’s opening price. However, the last candles are showing bearish pressure and price dropped once again, so it’s unclear what the next move will be. For the short term we expect to see another encounter with the confluence zone mentioned earlier and the way price behaves there will offer more clues about future direction.

Fundamental Outlook

The Euro will have a light economic day, without any major data coming out and on the US Dollar side the only notable event is the release of the Existing Home Sales numbers, scheduled at 3:00 pm GMT. The indicator shows the annualized number of houses sold during the previous month, excluding new buildings. The expected number is 5.42 Million and higher values show a healthy economy, so the Dollar is positively affected.


GBP/USD

The Pound showed bullish momentum since early in yesterday’s trading session and this allowed the pair to climb for a perfect touch of 1.3280 resistance.



Technical Outlook

Current momentum favours the bulls but as long as 1.3280 resistance remains intact, the probability of a drop is high. The first lower barrier and form of support is represented by the 50 period Exponential Moving Average, followed by 1.3175. To the upside, a break of 1.3280 would open the door for the key level at 1.3320.

Fundamental Outlook

The Inflation Report Hearings take place today at 10:00 am GMT and during these meetings, Bank of England Governor Mark Carney will testify on inflation and economic outlook before the Parliament's Treasury Committee. Depending on Carney’s attitude and answers, the Pound is likely to show increased volatility, so caution is advised.

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FOREX NEWS: US DOLLAR STRUGGLES, LOOKS FOR A VOLATILITY BOOST FROM FOMC MEETING MINUTES


EUR/USD

Forex News: Political turmoil in Germany, combined with modest US Dollar strength took the pair below support yesterday. However, price remained in a tight range for almost the entire session.



Technical Outlook

The pair’s gains seen Monday were totally erased and now the bears are trying to push price below the confluence zone created by 1.1735 and the 50 period Exponential Moving Average. If they succeed, the first target will become the support at 1.1700, followed by the zone around 1.1670; the oscillators are showing bearish momentum, favouring a move into the next support but a lot will depend on the US data released today.

Fundamental Outlook

The first U.S. data release will be the Durable Goods Orders, scheduled at 1:30 pm GMT. The indicator shows changes in the total value of orders for goods with a life expectancy of at least 3 years and is expected to post a reading of 0.4% (previous 2.0%). Higher than anticipated numbers show increased economic activity and usually strengthen the US Dollar.

Later in the day, at 7:00 pm GMT the FOMC will release the Minutes of their latest rate meeting. The document contains insights into the reasons that determined the latest rate decision but can also contain hints about future rate hikes and other monetary policy matters. If this is the case, the US Dollar will probably have a strong reaction, thus caution is recommended.


GBP/USD

The pair retreated yesterday without threatening 1.3280 resistance but found support around 1.3225 zone and bounced higher. Both currencies in the pair lack a clear direction, so we can expect to see more choppiness.



Technical Outlook

The pair is capped by the resistance at 1.3280 and the support at 1.3225, so until we see a clear breakout, we can expect reversals within the range. A break of support will take price into the 50 period EMA, while a break of resistance will open the door for a move into the key level at 1.3320. Both the US Dollar and the Pound will be affected today by important events, so there’s an increased chance of a breakout.

Fundamental Outlook

At 12:30 pm GMT, HM Treasury will release the Autumn Forecast Statement, which contains an economic outlook and offers information about the government’s budget for the upcoming year. The Statement is released once per year and can have a significant impact on the Pound.

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FOREX NEWS: LONG-TERM RESISTANCE THREATENED. US DOLLAR STRUGGLES TO RECOVER WEEKLY LOSSES

EUR/USD

Forex News: The European Manufacturing and Services surveys released yesterday showed optimism among purchasing managers and this contributed to the pair’s climb into the key resistance at 1.1860, generating another bullish session.

Technical Outlook

The bulls are now facing an important resistance zone represented by 1.1860 and 1.1875. Also, the pair has travelled a long distance to the upside without a proper retracement and the Relative Strength Index is approaching overbought territory. These reasons make us anticipate a drop that will possibly find support at 1.1825. If the pair moves above 1.1875 without retracing first, expect the upside to be limited and a pullback to follow.

Fundamental Outlook

The German IFO Business Climate will be the day’s only notable release, scheduled at 9:00 am GMT. This is a survey with a very large sample size of about 7,000 businesses that asks respondents to give their 6-month outlook for the economy and to rate current business conditions. The expected reading is 116.6, almost unchanged from the previous 116.7 and usually a higher number strengthens the Euro but to a limited extent.

 

GBP/USD

The pair dropped close to 1.3280 support yesterday after the British GDP failed to surpass expectations. However the losses were quickly erased, mostly due to US Dollar weakness across the board.

Technical Outlook

The resistance at 1.3320 represents the top of the long term range and is a key level for long term movement, a fact which makes us believe that price will struggle to break it and that we will see a retracement lower from here. The first potential support is located at 1.3280, where we expect bullish action to resume.

Fundamental Outlook

The economic scene is light today for the Pound, without any important data releases. The technical aspect will decide the pair’s direction unless surprising events take place.

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FOREX NEWS: BULLS DOMINATE THE MARKET BUT TECHNICAL INDICATORS ENTER DEEP OVERBOUGHT TERRITORY. PULLBACKS FORTHCOMING?


EUR/USD

Forex News: Friday the German IFO Business Climate posted an all-time high figure of 117.5, thus allowing the Euro to make significant advances against an already weak US Dollar and to finish the day almost 100 pips higher.



Technical Outlook

Momentum is clearly bullish and the pair broke a very important zone of resistance (1.1860 – 1.1875) but these types of moves are usually followed by a pullback or at least a period of sideways movement. The Relative Strength Index and Stochastic are deep in overbought territory, thus increasing the chances of a retracement lower.

Fundamental Outlook

The only notable release of the day is the U.S. New Home Sales, a report that shows how many houses were sold during the previous month. The expected number is 627K (annualized format) and a higher reading shows increased economic health, thus strengthening the greenback but the impact is medium.


GBP/USD

Price action was mostly bullish Friday and the pair broke the resistance at 1.3320, reaching a high at 1.3360 before retracing lower. The US Dollar continues to be on the retreat, with only minor signs of strength. 



Technical Outlook

After an almost perfect bounce at 1.3280, which is now support, the pair exited the long term range by breaking the resistance at 1.3320. Price action during the next few days will show whether the break was true or not and until then, the levels to watch are 1.3360 (Friday’s high) as potential resistance and of course 1.3320, which may turn into support.

Fundamental Outlook

The United Kingdom didn’t schedule any economic releases for today, so the technical aspect and the U.S. home sales numbers will decide market direction.

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FOREX NEWS: US DOLLAR TAKES CENTER STAGE AS FED CHAIRMAN DESIGNATE POWELL TESTIFIES IN WASHINGTON DC


EUR/USD

Forex News: The pair made new advances during the early stages of yesterday’s trading session and pierced through last week’s high at 1.1944. However, the US Dollar showed signs of recovery in the afternoon and price returned below resistance.



Technical Outlook

After moving above 1.1944 and returning below it, the pair is now showing two candles with a very long wick in their upper part. This rejection combined with the overbought condition of the Relative Strength Index, increases the chances of a move lower that may find support around 1.1900 - 1.1875. However, the pair’s movement will likely be influenced by the testimony of Fed Chair Designate Powell, so the technical aspect may be secondary.

Fundamental Outlook

At 3:00 pm GMT, Fed Chair Designate Jerome Powell will testify before the Senate Banking Committee. He is designated to become Chairman of the Federal Reserve starting in February 2018, so his speech will probably have a strong impact on the US Dollar, thus caution should be used.

At the same time the U.S. Consumer Confidence survey comes out, showing the opinions of about 5,000 households about current and future economic conditions. The expected reading is 123.9 and higher numbers usually strengthen the greenback because rising consumer confidence is indicative of future increase in consumer spending.


GBP/USD

Similar to the Euro, the Pound won the early battle against the US Dollar but the gains were erased in the second part of yesterday’s trading session, partly due to better than expected U.S. house sales.



Technical Outlook

The last candle shows a huge upper wick, which is a clear and strong sign of rejection and this is the main reason why we expect to see today a drop into 1.3320. If that support is broken, the medium term uptrend will be weakened and we will probably see more choppy movement. Both currencies are affected today by major events and those will play a major role for direction.

Fundamental Outlook

At 7:00 am GMT the Bank of England will reveal the Bank Stress Test Results and the Financial Stability Report. Half an hour later, BOE Governor Carney will hold a press conference about the two releases that were just mentioned and this cluster of events is likely to generate strong volatility on all Pound pairs, so caution is recommended.

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FOREX NEWS: POWELL’S TESTIMONY BOOSTS THE US DOLLAR. GERMAN INFLATION AND U.S. GDP EYED FOR NEXT MOVE


EUR/USD

Forex News: The text of Fed Chair Designate Powell’s testimony was released 17 hours earlier than initially scheduled. However, during his hearing before the Senate Committee he showed a hawkish stance, giving a boost to the US Dollar.



Technical Outlook

The anticipated pullback happened yesterday and the pair dropped to touch the support at 1.1875 but price action is still choppy, with long candle wicks and small bodies. However, the market seems to be receiving well the nomination of Jerome Powell as next Fed Chair, so we expect to see increased demand for the US Dollar and a move into the 50 period Exponential Moving Average.

Fundamental Outlook

At 1:00 pm GMT we take a look at German inflation with the release of their Preliminary Consumer Price Index. The anticipated change is 0.3% and under normal conditions, higher numbers strengthen the shared currency.

For the US Dollar the most important release will be the Preliminary Gross Domestic Product, which is expected to increase to 3.3% compared to the previous 3.0%. This is the main gauge of overall economic performance, so a higher reading strengthens the greenback. The data comes out at 1:30 pm GMT.

Later in the day, at 3:00 pm GMT, Fed Chair Yellen will testify before the Joint Economic Committee of Congress about the U.S. economic outlook. The event should be treated with caution.


GBP/USD

The pair dropped at the time of Powell’s testimony but the impact was much bigger than the one seen on EUR/USD, mostly because the Pound was weaker at the time. Also the US Consumer Sentiment survey posted a much better than anticipated figure aiding the drop.



Technical Outlook

Price dropped through several support levels, including the 50 period Exponential Moving Average and is now trading very close to 1.3225 support. The long distance travelled yesterday calls for a retracement to the upside and the Relative Strength Index is approaching oversold, thus supporting this view; however, we don’t expect the pair to climb above the 50 EMA. A break of 1.3225 will open the door for a move into 1.3175. 

Fundamental Outlook

At 2:00 pm GMT, BOE Governor Carney will speak at the Fixed Income Currencies and Commodities Markets Standards Board about the Fair and Effective Markets Review. This is not a major testimony or press conference so the impact may not be huge but caution is recommended nonetheless.

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FOREX NEWS: POUND SOARS ON FRESH BREXIT NEWS. KEY RESISTANCE TARGETED


EUR/USD

Forex News: German inflation data and U.S. Gross Domestic Product matched analysts’ expectation yesterday and each strengthened the respective currency. The pair bounced at support but failed to break resistance and moved lower again, creating irregular movement.



Technical Outlook

The next big move will be decided by the break of 1.1825 support or 1.1875 resistance because yesterday the pair was rejected by both these levels, thus increasing their importance. Price is testing support for the second time but at the time of writing it is showing rejection and has moved back above the 50 period Exponential Moving Average, facts which make us anticipate a move into 1.1875 and possibly a break.

Fundamental Outlook

The highlight of the day will be the release of the European CPI Flash Estimate, which is the main gauge of inflation across the Eurozone and has a high impact on the currency itself. The expected change is 1.6% from the previous 1.4% and anything above forecast strengthens the Euro; the time of release is 10:00 am GMT.


GBP/USD

News that the EU and UK have reached an agreement regarding the Brexit “divorce” bill, boosted the Pound to fresh highs and took the pair 200 pips higher. The pair gave up some of the gains later in the day but momentum favours the bulls. 



Technical Outlook

The bounce seen at 1.3225 was generated by strong fundamental reasons, not so much by the technical side, so the effects may extend over a longer period. In the short term we expect to see a touch of the key resistance located at 1.3450 (better seen on a Daily chart), where we expect to see a pullback.

Fundamental Outlook

The economic scene is calm today for the Pound, without any scheduled releases. That being said, caution is recommended because the Pound is prone to strong movement if surprising news come out.

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FOREX NEWS: RESISTANCE IS SHATTERED AS A NEW WAVE OF US DOLLAR WEAKNESS HITS THE MARKET


EUR/USD

Forex News: The pair showed choppy movement early during yesterday’s session but in the afternoon the US Dollar came under heavy selling pressure and price shot through 1.1875 resistance.



Technical Outlook

After failing to break 1.1825 support or to close below the 50 period Exponential Moving Average, the pair started to rally strongly without any high impact news behind the move. Price is now out of the consolidation area between 1.1875 and 1.1825, showing strong momentum, facts which make us anticipate a touch of 1.1945 – 1.1950 resistance in the near term. If price reaches that mark we expect it to bounce lower, at least momentarily. 

Fundamental Outlook

The day’s most notable release will be the U.S. Manufacturing PMI, which is a survey of about 400 purchasing managers who are asked to rate business conditions in the manufacturing sector. The survey acts as a leading indicator of economic health and optimism, with higher numbers strengthening the greenback. The time of release is 3:00 pm GMT and the expected reading is 58.4.


GBP/USD

The pair continued its ascension yesterday and moved through the psychological resistance at 1.3500. The move was mostly due to US Dollar weakness and a positive sentiment surrounding the Pound.



Technical Outlook

After the initial push above 1.3450, price returned to re-test the level, which rejected it higher, turning into support. This level was a strong resistance (better seen on a Daily chart), so we can expect it to act as strong support in the future. As long as the pair remains above 1.3500, the next destination is 1.3600 but that mark will not be hit today probably, unless surprises happen. The Relative Strength Index is approaching overbought, warning of potential retracements.

Fundamental Outlook

The British Manufacturing PMI is today’s only highlight for the Pound, scheduled at 9:30 am GMT and expected to show a reading of 56.6. Just like the U.S. PMI mentioned above, this survey tries to gauge optimism among purchasing managers and usually strengthens the Pound if it shows a reading above expectations.

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FOREX NEWS: POLITICAL TURMOIL IN THE U.S. HINDERS THE DOLLAR’S RECOVERY

EUR/USD

Forex News: U.S. politics took center stage Friday as Michael Flynn, Trump’s ex-national security adviser pleaded guilty of lying to the FBI regarding his communication with the Russian ambassador. The news weakened the US Dollar and reversed the pair from an earlier drop.

Technical Outlook

Price was moving below 1.1875 support before the Flynn news hit but most of the pair’s losses were erased and now we can clearly see a bounce at the 50 period Exponential Moving Average. The US Dollar will likely suffer from the aftermath of Friday’s developments, so we expect the pair to remain above 1.1875 and possibly move closer to 1.1945.

Fundamental Outlook

The only notable release today will be the U.S. Factory Orders, scheduled at 3:00 pm GMT and expected to post a reading of -0.3% from the previous 1.4%. The indicator shows changes in the total value of orders placed with manufacturers and has a medium to low impact on the greenback. Higher than anticipated values strengthen the US Dollar and are indicative of rising production (factories will increase activity to fill the orders).

 

GBP/USD

Friday’s trading session was controlled by the bears although the US Dollar was affected by political turmoil. The pair is now testing the previous resistance, which may turn into support.

Technical Outlook

The bulls ran out of steam at 1.3550, where the sellers took over and drove the pair all the way down to 1.3450. The way price behaves at this level will determine the day’s direction: if 1.3450 turns into support, thus rejecting the pair higher, then we will most likely see a touch of 1.3500. If the level is broken, the pair will start moving towards the 50 period Exponential Moving Average. However, we expect a rather slow trading session unless surprises happen.

Fundamental Outlook

At 9:30 am GMT the British Construction PMI will be released, showing the opinions of about 170 purchasing managers about business conditions in the construction sector. The survey acts as a leading indicator of economic health and higher numbers than the forecast 51.2 usually strengthen the Pound but the impact is low if the actual number matches expectations.

Edited December 4, 2017 by GDMFX

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FOREX NEWS: SUPPORT TARGETED AS THE US DOLLAR IS SHOWING MINOR RECOVERY SIGNS

EUR/USD

Forex News: The US Dollar seems to have recovered from Friday’s weakness, partly aided by better than expected Factory Orders. Also, the U.S. Senate passed the tax-reform bill and this brought a breath of fresh air to the battered greenback.

Technical Outlook

The pair bounced yesterday at 1.1875 (which is now resistance once again) and is approaching 1.1825 support. The oscillators are showing mild bearish momentum but the pair is again trapped between 1.1825 and 1.1875 so the overall picture is blurry and we don’t expect major developments until one of the two levels is broken. As long as price is trading below the 50 period EMA and below 1.1875, our bias is slightly bearish.

Fundamental Outlook

It’s a pretty slow day for the Euro, without any major news releases and on the US Dollar side the Non-Manufacturing PMI will be the only notable announcement. The survey gauges the opinions of purchasing managers about business conditions, excluding the Manufacturing sector and has a medium impact on the US Dollar. The time of release is 3:00 pm GMT, the expected number is 59.2 and usually, values above forecast boost the Dollar.

 

GBP/USD

The Pound benefited from fresh optimism surrounding Brexit negotiations and pushed higher during yesterday’s session but failed to reach the resistance at 1.3550 before dropping lower.

Technical Outlook

The bulls ran out of steam before reaching the resistance located at 1.3550 and now the pair is showing rejection and increased bearish pressure. For today we expect to see a break of 1.3450 and a move into 1.3410, where the pair will also bump into the 50 period Exponential Moving Average. If this support zone can be surpassed, we will probably see an extended move to the downside, otherwise the pair is likely to resume the uptrend.

Fundamental Outlook

At 9:30 am GMT the British Services PMI comes out, showing the opinions of purchasing managers from the Services sector about business conditions in said sector. The survey doesn’t have a huge impact on the Pound but numbers above forecast (55.2) usually strengthen the Pound.