Gdmfx - Weekly News

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WEEKLY ANALYSIS: THE US DOLLAR STRIKES BACK, BEARS THREATEN THE UPTREND


EUR/USD

Weekly Analysis: The first days of last week were slow and choppy but action picked up later in the week when the bears managed to break support on the back of better than expected U.S. economic data. The uptrend is still intact but is severely weakened.



Technical Outlook

The pair broke 1.1335 support and is now struggling to move below the 50 days Exponential Moving Average. Last time price encountered this form of support, it bounced higher, so the same scenario may apply now, but a bearish break will put control in the hands of the sellers. If this happens, we will probably see a touch of 1.1210, followed by a small retracement to the upside; on the other hand, a bounce higher and a fast move above 1.1335 would make 1.1450 the target for the week.

Fundamental Outlook

The week starts slow, with Swiss, French and German banks being closed in observance of Whit Monday; no important indicators are released by the United States either. Tuesday action picks up with the release of the always important U.S. Consumer Price Index, which is the main gauge of inflation. Wednesday the FOMC will release the Minutes of their latest Meeting, offering insights into the reasons that generated the rate votes. More importantly, this document may contain hints about the pace of future rate changes and if this is the case, the US Dollar is likely to have a strong response.

Thursday the Philly Fed Manufacturing Index coms out, showing the state of the manufacturing sector according to the opinions of surveyed manufacturers and Friday is another slow day, with the U.S. Existing Home Sales numbers being the only notable event.


GBP/USD

The first 4 days of the week that just ended were incredibly choppy and all moves in one direction were quickly reversed. It seems the pair is now finally picking a direction but support is still in the way.



Technical Outlook

The pair finished the week below the 50 days Exponential Moving Average but the support at 1.4350 is still intact; the Stochastic is entering oversold but the Relative Strength Index still has a long way to go and all this paints a blurry picture, with reasons for price to go up as well as down. We slightly favor the sell side because momentum is finally starting to pick up after a few days of sideways movement, so we anticipate a break of 1.4350 and a touch of the bullish trend line seen on the chart above.

Fundamental Outlook

The first British event of the week is scheduled Tuesday: the Consumer Price Index which measures changes in the price that consumers pay for their purchases. It is the main gauge of inflation and usually creates a strong impact, with higher numbers being beneficial for the Pound. Wednesday we take a look into the unemployment situation with the release of the Claimant Count Change, an indicator that shows changes in the number of people who applied for unemployment related help. Higher numbers are usually detrimental for the Pound, showing a possible decrease in economic activity and consumer spending.

The last major event of the week is the release of the British Retail Sales, scheduled Thursday. This kind of sales represents a big chunk of the entire consumer spending which in turn accounts for a major part of the entire economic activity, thus higher numbers usually strengthen the Pound.

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WEEKLY ANALYSIS: US DOLLAR ADVANCES ON THE BACK OF FED RATE HIKE OPTIMISM


EUR/USD

Weekly Analysis: The most important day of last week was Wednesday when the FOMC Minutes came out, showing optimism about a potential rate hike in June. This strengthened the US Dollar, driving the pair below support and generating an overall bearish week.



Technical Outlook

The 50 period Exponential Moving Average was broken decisively last week and this could be the beginning of an extended period of bearish movement. Currently price is trying to break the barrier at 1.1210 and if it manages to do so, we expect it to drop towards 1.1060; however, the oversold condition of the Stochastic plays against this scenario and may trigger a bullish retracement (the RSI is also close to oversold). Our bias for the week is bearish as long as the pair remains below the 50 days EMA but we expect some bullish retracements.

Fundamental Outlook

The first event on the calendar is the release Monday of the Eurozone Manufacturing PMI, a survey of about 3,000 purchasing managers that asks respondents to give their opinion on the business conditions in the manufacturing sector. Tuesday we have the German ZEW Economic Sentiment (a survey of about 275 German analysts and professional investors regarding their 6 month outlook for Germany) and the same day the Eurogroup Meetings start.

Wednesday is another day for surveys, with the highlight being the German IFO Business Climate. It has a large sample of about 7,000 businesses and this makes it a high impact indicator but usually the effect is limited if the actual number matches analysts’ expectations. Thursday we turn to the U.S for the release of the Durable Goods Orders (goods with a life expectancy of at least 3 years) and Friday we remain on the US Dollar side for the release of the Preliminary version of the Gross Domestic Product, which is considered the main gauge of overall economic performance.


GBP/USD

The Pound got a boost from a poll that showed that a Brexit is less probable and that the majority of surveyed people would rather remain in the EU. Most of the gains were erased Friday when the greenback strengthened.



Technical Outlook

The pair bounced almost perfectly at 1.4650 and now the bears are struggling to break the support at 1.4500. If they manage to do so, we expect a move into 1.4350; a break of the bullish trend line seen on the chart above would suggest that the pair will enter a period of bearish movement. The 50 period Exponential Moving Average is close to the mentioned support zones, adding strength to them and making a break more important.

Fundamental Outlook

The Pound has a slow week ahead, with only two notable releases: Tuesday the Public Sector Net Borrowing numbers come out and Thursday the Second Estimate Gross Domestic Product is released. The former indicator shows the difference between spending and income for public corporations and government during the previous month while the GDP is the main gauge of economic performance, thus it has a strong impact on the currency.

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WEEKLY ANALYSIS: ECB INTEREST RATE ANNOUNCEMENT, U.S. JOBS DATA – THE INGREDIENTS FOR WILD SWINGS


EUR/USD

Weekly Analysis: The greenback won the battle against the Euro last week, breaking support and the bullish trend line seen on the chart below. The economic calendar didn’t reveal major events but optimism about a June rate hike kicked in, helping the US Dollar.



Technical Outlook

After breaking 1.1210, the pair returned to re-test it from below, bouncing lower and thus confirming the level as resistance. The bullish trend line is also broken and the pair is below the 50 days Exponential Moving Average, so all things point towards an extended move south but as we can note, the Stochastic is oversold and the Relative Strength Index is close to its 30 level. This fact increases the chances of a bullish bounce but we expect 1.1060 to be tested this week and there we will probably see a move higher.

Fundamental Outlook

The economic week opens Monday with the release of the German Consumer Price Index, an always important gauge of inflation that can positively affect the Euro if it shows higher numbers; on the US Dollar side, banks will be closed in observance of Memorial Day so we don’t have any major releases. Tuesday the Eurozone CPI Flash Estimate comes out, followed later in the day by the U.S. Consumer Confidence, a survey of about 5,000 households that tries to gauge the overall opinion about job availability, business conditions and economic environment.

Wednesday is a slow day for the Euro, while the greenback will be affected by the release of the U.S. Manufacturing PMI. This is another survey that asks purchasing managers from the manufacturing sector to give their assessment about the overall performance of said sector. Thursday will be the busiest day for the Euro as the ECB announces the interest rate and ECB President Mario Draghi holds his usual press conference. Although the rate is not expected to change, volatility is likely to surge during the press conference, so as always, caution is recommended.

Friday is the greenback’s turn to steal the spotlight with the release of the Non-Farm Employment Change (Non-Farm Payrolls). This indicator shows how many new jobs were created during the previous month and is considered the most important jobs related indicator for the United States. Almost always this release is accompanied by strong movement and increased volatility.


GBP/USD

Last week was overall bullish but the Pound gave back some of the early gains later in the week. The move up seems exhausted now as the pair failed to clearly threaten key resistance.



Technical Outlook

The bullish break of 1.4650 resistance (seen earlier in the week) did not take price into 1.4765 as expected and instead the pair returned below the broken level. This shows that the bulls are starting to fade away and that we will probably see a move into 1.4500 this week; the 50 days Exponential Moving Average is close to 1.4500, thus creating a confluence zone that will be difficult to break but if the bears manage to do that, the pair is likely to start a new short term downtrend.

Fundamental Outlook

Monday UK banks will be closed, celebrating Spring Bank Holiday so the economic calendar is empty. The rest of the week is filled with surveys: Wednesday the Manufacturing PMI comes out, followed Thursday by the Construction PMI and Friday by the Services PMI. These are all leading indicators of economic health, derived from the opinions of purchasing managers from the respective sectors and usually, higher numbers trigger Pound strength. As always, the pair will be directly influenced by the U.S. events scheduled throughout the week.

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WEEKLY ANALYSIS: NFP: THE AFTERMATH


EUR/USD

Weekly Analysis: The first four days of last week were slow and without major developments but all that changed once the NFP numbers came out, showing a disappointing employment situation in the United States and weakening the US Dollar.



Technical Outlook

Price bounced at a bullish trend line and is now trading above the 50 period Exponential Moving Average, the oscillators are moving out of oversold with strong bullish momentum and the U.S. jobs report weakened the greenback severely. All this points to an extended climb that may very well take the pair into the zone around 1.1450, so our bias is bullish for the week ahead but we also expect smaller moves to the downside, mainly because usually after such a strong climb, price retraces a bit. 

Fundamental Outlook

The week ahead opens Monday with a speech of Fed Chair Janet Yellen; she will speak at a luncheon in Philadelphia and will touch the topics of monetary policy and economic outlook so we expect a strong influence on the US Dollar. Tuesday and Wednesday are slow days, without major releases while Thursday’s only notable event is a speech of ECB President Mario Draghi at the Brussels Economic Forum.

The lackluster economic scene extends into Friday when the only major release is the University of Michigan Consumer Sentiment survey. About 500 consumers are asked to rate the current level of economic conditions and usually a higher reading suggests that consumer spending is likely to increase in the near future; this in turn means that economic activity will pick up, bringing a stronger greenback.


GBP/USD

Before the NFP data was released, the Pound was losing the battle against the US Dollar, weakening throughout the week. Some of the losses were erased when the U.S. employment data came out but the week still finished lower than it started.



Technical Outlook

The bullish trend line seen on the chart above still acts as good support as seen from last week’s price action and now the pair is trading above the 50 period Exponential Moving Average. Although these are signs that price may be headed higher, the bulls clearly showed weakness last week and could only make advances on the back of much worse than expected U.S. economic data. Both currencies are weak at the moment but as long as the pair stays above the trend line, we expect further upside, with 1.4650 as target.

Fundamental Outlook

Same as the Euro and Dollar, the Pound has a slow week ahead, with the only notable release being the Manufacturing Production, scheduled Wednesday. The indicator shows changes in the total value of output generated by the manufacturing sector but usually has a mild impact on the Pound if the actual number matches analysts’ forecast or comes very close. Nonetheless, higher numbers are beneficial for the currency.

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WEEKLY ANALYSIS: THE DREADED BREXIT STRIKES AGAIN


EUR/USD

Weekly Analysis: The US Dollar made a spectacular comeback during the last 2 days of last week, bounced at resistance and erased most of the losses incurred a week before. Short term momentum favors the bears as the pair moved below the 50 period EMA.



Technical Outlook

We see bearish pressure building up, following the failed attempt to break 1.1400 resistance. Now price is trading below the 50 period Exponential Moving Average but although a daily candle has closed below the line, we cannot deem it a true break just yet. However, the Stochastic and Relative Strength Index are showing a bearish bias and favor further downside, so for this week we expect a move into 1.1210 and maybe a break of the bullish trend line seen on the chart if the pair can stay below the moving average.

Fundamental Outlook

The week starts slowly, without any major announcements Monday but Tuesday action picks up with the release of an important U.S. indicator: the Retail Sales. Higher numbers usually strengthen the US Dollar because retail sales account for the major part of consumer spending, which in turn represents a hefty part of the entire economic activity.

Wednesday we remain on the US Dollar side for the release of the Federal Funds Rate as well as the FOMC Statement which will offer details regarding the rate decision. Analysts don’t expect a rate change but any hints about a near-future hike are likely to trigger strong greenback movement.

Thursday we receive inflation data from the United States in the form of the Consumer Price Index and the week finishes Friday with a speech of ECB President Mario Draghi, in Munich. Both these events can have a strong influence on their respective currency so caution is recommended.


GBP/USD

Bearish pressure on the Pound mounted late last week as polls showed that now more people favor a separation of Britain from the European Union.



Technical Outlook

After the long wicked candle that bounced at 1.4650 resistance, the pair fell through the bullish trend line and the support at 1.4350, setting the stage for an extended period of bearish movement. The strong drop was triggered by the polls we mentioned earlier and since we are less than 2 weeks away from the actual referendum (23 June 2016), we expect more of these polls to come out and to influence the Pound’s direction. Short term control belongs to the bears but caution is recommended.

Fundamental Outlook

The first event of the week for the Pound is the Consumer Price Index, released Tuesday; this is the main gauge of inflation and shows changes in the price consumers pay for the goods and services they purchase. Usually the impact is strong, with higher numbers strengthening the Pound.

The Claimant Count Change comes out Wednesday, showing changes in the number of people who ask for unemployment related social help and Thursday will be the busiest day for the Pound as the British Retail Sales come out, as well as the Interest Rate and a breakdown of the MPC members’ votes. Although the rate is not expected to change for a long while, the event still creates volatility and sometimes irregular price action. As always, the U.S. events will have a major impact on the pair’s movement.

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WEEKLY ANALYSIS: TO BREXIT OR NOT TO BREXIT!


EUR/USD

Weekly Analysis: Although the pair showed big swings during the week, it ended the period almost where it started it, showing rejection at the bullish trend line. The Fed kept rates unchanged as expected but mentioned that 2 hikes may come until the end of the year.



Technical Outlook

A massive drop was completely reversed last week and the pair moved above and below the 50 period Exponential Moving Average, bouncing at the bullish trend line. This shows that the market is in a state of indecision, probably generated by the approaching of the Brexit referendum. We recommend caution throughout the week because we expect irregular movement and alternating volatility. The latest movement shows bullish pressure so if the buyers can take price above the 50 EMA, we expect a move into 1.1400; on the other hand, a break of the trend line will open the door for a move into 1.1060.

Fundamental Outlook

Monday doesn’t hold major events but Tuesday action picks up with the release of the German ZEW Economic Sentiment, a survey of 275 German investors and professional analysts regarding the state of the economy. The same day, Fed Chair Janet Yellen will testify before the Senate Banking Committee with the main topic being monetary policy; Wednesday she will again testify on the same topic but this time before the House Financial Services Committee. Both these events have the capability to trigger erratic movement so caution is recommended.

Thursday we focus on the US Dollar for the release of the New Home Sales numbers and Friday we have the German IFO Business Climate (a survey of about 7,000 businesses regarding business conditions), followed later in the day by the U.S. Durable Goods Orders. This indicator tracks changes in the total value of orders for goods with a life expectancy of more than 3 years and usually a higher value shows increased economic activity and tends to strengthen the greenback.


GBP/USD

The Pound was heavily affected last week by the shooting of Jo Cox, a British lawmaker who had a pro-EU stance and the pair finished the week higher after an initial move below support.



Technical Outlook

We saw a strong whipsaw last week, which confirms the fact that price action is heavily influenced by the shaky fundamental environment. Price is approaching the 50 period Exponential Moving Average and this is a good place for downside movement to resume but a break will probably take the pair into 1.4500 psychological resistance. To the downside, 1.4050 remains a key support but our stance is neutral, considering the nearing of the referendum.

Fundamental Outlook

A huge event takes place this week: the referendum that will decide whether Britain will remain or not in the European Union. It is scheduled for Thursday and is expected to create huge movement and irregular volatility. We recommend choosing other pairs to trade on until things calm down. Other than this, there are no major events on the Pound’s calendar.

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WEEKLY ANALYSIS: A SMALLER EUROPEAN UNION – A BIG BLOW FOR THE EURO AND POUND


EUR/USD

Weekly Analysis: Last week Britain has decided to leave the European Union and the impact on the market was tremendous. The Euro tumbled for more than 500 pips but the effects of the Brexit are still in play so we may see further declines.



Technical Outlook

The fact that Britain parted ways with the EU weakened both the Pound and the Euro. It’s a historical decision and the markets will continue to be affected by it, especially we’ll hear talks about other EU members leaving or thinking about it. For now the low at 1.0911 represents a key level and to the upside the first major barrier is the recently broken trend line, followed by 1.1335 and 1.1400.

Fundamental Outlook

The week starts slow, without any major events Monday but Tuesday action picks up with the release of the Final version of the U.S. Gross Domestic Product as well as a U.S. Consumer Confidence survey which acts as a leading indicator of consumer spending.

Wednesday we turn our attention to the Euro for the release of the German Prelim Consumer Price Index (main gauge of inflation) and Thursday the focus remains on German economy for the release of the German Retail Sales.

Friday’s only major event is the release of the U.S. Manufacturing PMI, a survey of purchasing managers from the manufacturing sector that tries to gauge their level of confidence regarding overall business conditions. 


GBP/USD

Due to Britain’s referendum results, the Pound dropped for almost 1,800 pips against the US Dollar, reaching levels that were last seen in the mid-1980s. The future is just as uncertain for the Pound as is for the United Kingdom and the European Union.



Technical Outlook

Currently price is not driven by the technical aspect but by the reactions of EU leaders and major market participants. The low at 1.3227 is a level not reached since the mid ‘80s and it’s very possible to see another attempt to break it but it’s also very possible to see a move back above 1.3835. Either way, caution is still recommended as the next direction is uncertain and volatility has reached peak levels.

Fundamental Outlook

The United Kingdom didn’t schedule a lot of economic indicators for the week ahead but noteworthy is the Current Account, that will be released Thursday and the Manufacturing PMI that will come out Friday. The first indicator shows the difference between imported and exported goods, while the second acts as a leading indicator of economic health, focused on the Manufacturing sector. Considering the turmoil generated by Britain leaving the EU, the mentioned events may be overlooked by market participants.

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WEEKLY ANALYSIS: WEEK AHEAD HIGHLIGHTS: BOE FINANCIAL STABILITY REPORT, U.S. NON-FARM PAYROLLS


EUR/USD

Weekly Analysis: Last week the pair erased some of the losses generated by the Brexit referendum and headed higher, into resistance. Part of this climb was generated by speculation that the Fed will not raise rates in the near future.



Technical Outlook

The pair is still trading below the 50 period Exponential Moving Average and the resistance at 1.1150 is still holding. Upside movement should be contained by the resistance around 1.1200 and by the 50 days EMA so if the pair reaches that zone, we expect downside action to resume. A move above the mentioned zone would invalidate such a scenario and would make the medium term outlook bullish.

Fundamental Outlook

Monday the United States celebrate Independence Day and this will likely generate irregular volatility; banks across the US will be closed and no indicators will be released. Tuesday is another slow day, without major releases but Wednesday action picks up with the FOMC Meeting Minutes that will offer details on the latest Fed meeting and possibly hints about future rate direction.

Thursday Automatic Data Processing Inc. will release their version of the Non-Farm Employment Change and Friday the Non-Farm Payrolls come out, showing changes in the number of new jobs created during the previous month. This is widely regarded as the most important jobs related report and almost always its release creates strong movement, with higher numbers strengthening the US Dollar. It will probably be the week’s main market mover so caution is recommended.


GBP/USD

Last week the pair established a new historical low at 1.3120 and retraced higher before dropping again. These are massive swings of more than 400 pips so trading the Pound still carries increased risk.



Technical Outlook

Price was rejected higher at 1.3227 support and after establishing a high at 1.3533, it came back, attempting to break the mentioned support. If this barrier is surpassed earlier in the week, we expect a re-test of 1.3120 and possibly a new low somewhere in the 1.3000 area. A lot will depend on the talks that are still surrounding United Kingdom’s separation from the EU but also on the NFP results that come out later in the week.

Fundamental Outlook

Monday the Construction PMI comes out, showing the opinions of purchasing managers regarding overall business conditions in the Construction sector. It will be followed Tuesday by the Services PMI and the BOE Financial Stability Report; also Tuesday BOE Governor Carney will hold a press conference about the Report and this may create high volatility on Pound related pairs.

Wednesday no major indicators are released, Thursday the Manufacturing Production numbers come out and the week ends Friday with the Goods Trade Balance, an indicator which shows value differences between imported and exported goods. Occasionally this indicator creates a strong impact but many times it goes overlooked by the market.

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WEEKLY ANALYSIS: MASSIVE SWINGS AHEAD. POTENTIAL BANK OF ENGLAND RATE CUT!


EUR/USD

Weekly Analysis: Last week belonged to the bears again as we witnessed the end of the bullish retracement followed by a move below support. The previous low was not broken and the U.S. NFP triggered irregular movement although the value was better than anticipated.



Technical Outlook

The resistance zone near 1.1150 was tested several times but it proved a barrier too tough to break and the pair soon started to move lower. Price is currently below 1.1060 but the last daily candle shows clear signs of indecision, having long wicks in both its upper and lower parts. Despite this indecision, this week we expect a move into 1.0911 and a potential break of this support. As an alternate scenario, if the pair starts to move north, we expect it to find resistance at the 50 period Exponential Moving Average.

Fundamental Outlook

The week ahead starts Monday with the Eurogroup Meetings, attended by central bankers and key political figures from the EU member states and continues with the Final German CPI released Tuesday. The CPI is the main gauge of inflation but the Final version is the least important so we don’t expect it to be a major market mover.

Wednesday we don’t have anything big on the economic calendar but Thursday action picks up with the release of the American Producer Price Index, which shows the changes in the price charged by producers for their goods and services. This indicator can have inflationary implications because a higher producer price usually leads to a higher price paid by consumers.

Friday is the busiest day of the week as three major U.S. indicators are released: the Consumer Price Index, which is a major gauge of inflation, the Retail Sales and the University of Michigan Consumer Sentiment Survey. All three can strongly affect the greenback, with higher numbers being beneficial for the economy.


GBP/USD

The Pound took another blow last week and dropped for 500 pips, reaching a new several decades low at 1.2796.



Technical Outlook

Last week’s drop took the Stochastic and Relative Strength Index in deep oversold territory and this calls for a retracement higher. This potential retracement should find resistance around the 1.3100 mark but the Pound remains a high risk currency and price can shoot through support or resistance without warning. The overall control belongs to the bears, so we favor the short side but the Bank of England is going to announce the interest rate this week and this will overshadow the technical aspect.

Fundamental Outlook

Tuesday the Inflation Report Hearings take place, with BOE Governor Mark Carney answering questions regarding the Inflation Report. Usually this event creates strong volatility and considering the current situation, we expect it to do the same this time.

Thursday we are preparing for another price storm because the Bank of England will announce the interest rate, which is expected to drop from the current 0.50% to 0.25%. If this comes true, we will possibly see another dip for the pound-dollar pair but nothing is certain and extreme caution is advised. The rate decision will be accompanied by a Monetary Policy Summary which will outline the reasons that stood behind the decision.

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WEEKLY ANALYSIS: ECB RATE WEEK, DRAGHI’S PRESS CONFERENCE TAKES CENTER STAGE


EUR/USD

Weekly Analysis: The pair had a pretty indecisive run last week, climbing into resistance and then erasing all gains, dropping to the levels seen in the beginning of the week.



Technical Outlook

The busiest day of last week was Friday when we saw a bearish bounce near the confluence zone created by the 50 period Exponential Moving Average and the horizontal resistance at 1.1150. This rejection may trigger an extended drop that will probably reach the low at 1.0911 but for that to happen, the technical and psychological support at 1.1000 needs to be broken. Considering that this week the ECB will announce their interest rate decision, we expect strong movement but the direction will be decided by the events ahead.

Fundamental Outlook

The first notable event of the week ahead is scheduled Tuesday: the release of the German ZEW Economic Sentiment, a survey that asks about 275 German analysts and investors to give their opinion about a 6-month economic outlook. The same day the U.S. Building Permits come out, offering information about the state of the construction sector in the United States.

Wednesday is a relatively slow day for the Euro and US Dollar but Thursday we expect strong movement because the European Central Bank will announce the interest rate and President Mario Draghi will hold a press conference. Although the rate is not expected to change, the announcement and the conference almost always create high volatility and possible whipsaws.

The week ends Friday with German Manufacturing data in the form of the Purchasing Managers’ Index but the indicator often lacks the strength to trigger massive moves.


GBP/USD

The Bank of England was expected to cut the interest rate last week but they didn’t and as a result the Pound strengthened. Some of the gains were erased Friday on the back of better than expected U.S. data.



Technical Outlook

Even before BOE’s decision to hold rates was made public, the pair retraced higher, clearing an oversold position of the Relative Strength Index and Stochastic. Now it seems like the pair is headed lower, possibly through 1.3120 and towards 1.2800, resuming the bearish bias generated by the British referendum. The geopolitical environment is fragile and may trigger increased volatility and sharp reversals so caution is recommended.

Fundamental Outlook

British inflation data (Consumer Price Index) is released Tuesday, followed Wednesday by the Claimant Count Change, an indicator that tracks changes in the number of individuals that asked for unemployment related social benefits during the previous month.

Thursday’s main event is the release of the British Retail Sales, an important indicator that usually has a strong impact on the market, mainly because sales made at retail levels represent a major part of the entire consumer spending.

The last event of the week for the Pound comes out Friday in the form of the Manufacturing PMI, a survey that offers insights into the state of the manufacturing sector and acts as a leading indicator of economic health.

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WEEKLY ANALYSIS: US DOLLAR IN THE SPOTLIGHT AS FED DECIDES MONETARY POLICY


EUR/USD

Weekly Analysis: Last week the pair broke the psychological and technical support at 1.1000, continuing the bearish move started after the bounce at 1.1150. The ECB kept the rate unchanged and President Mario Draghi’s press conference did not move the Euro in a clear direction.



Technical Outlook

The break of 1.1000 will probably bring in additional sellers that will take price into the low at 1.0911 but overall price action is choppy and candles have long wicks, suggesting indecision. The levels to watch are 1.0800 as key support and 1.1150 as resistance but unless this week’s Fed meeting triggers some strong movement, we don’t expect the pair to break either of them. Minor support sits at 1.0911 and minor resistance at 1.1060.

Fundamental Outlook

The week ahead starts Monday with the release of the German IFO Business Climate, a survey that draws its importance from the large sample of about 7,000 businesses that are asked to rate the current level of economic conditions as well as their 6-month outlook. A similar survey but for the U.S. economy is released Tuesday: the Consumer Confidence; this is indicative of future levels of consumer spending and usually had a medium-to-high impact on the US Dollar.

Wednesday is the most important day of the week for the greenback as the Fed will announce their interest rate and will release a statement outlining the reasons behind the decision. No change is expected (currently <0.50%) but the event creates volatility almost always so caution is advised.

Thursday we take a look at German inflation with the release of the Consumer Price Index and the economic week ends Friday with the most important version of the U.S. Gross Domestic Product – the Advance version. The GDP is the main gauge of overall economic performance so its release is considered a high-impact event.


GBP/USD

Last week we saw mixed movement on the pound-dollar pair, without any substantial developments but overall price action was bearish. Direction was mostly determined by individual economic releases and the pair remained between support and resistance.



Technical Outlook

Price action created support around 1.3070 and considering that the latest impulse is bearish, we expect a break of this level early during this week. Such a break would open the door for a move into the zone around 1.2800 but if instead price bounces at 1.3070, it will probably climb into the zone around 1.3280. The Fed meeting scheduled this week will probably be the deciding factor for medium term direction.

Fundamental Outlook

The Pound has only one potential market mover on this week’s calendar: the Preliminary Gross Domestic Product, scheduled for release Wednesday. Out of the three versions (Preliminary, Second Estimate and Final), this one is the first and thus tends to have the biggest impact on the market. As always, the U.S. events mentioned earlier will have a direct impact on the pair’s movement.

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FOREX NEWS: EURO GAINS AGAINST THE US DOLLAR, POUND STILL HESITANT AHEAD OF MANUFACTURING DATA


EUR/USD

Forex News: Friday the US Dollar weakened against the Euro and the bulls made a clear break of resistance. This was mostly generated by a disappointing reading posted by the Advance version of the U.S. Gross Domestic Product: anticipated 2.6%, actual 1.2%.



Technical Outlook

The level at 1.1150, which acted as strong resistance in the past, is now clearly broken and may turn into support if price returns to test it. Already some rejection is seen around 1.1180 and the oscillators are overbought, so we may see a 30 pip drop into 1.1150 but the short term bias is bullish and price will probably continue towards 1.1240. This view will be strengthened if 1.1150 becomes support.

Fundamental Outlook

At 2:00 pm GMT the U.S. Manufacturing PMI is released, with an anticipated value of 53.1, almost identical to the previous 53.2. This is a survey of purchasing managers from the manufacturing sector that asks respondents to give their opinions on overall business conditions and health of the said sector; usually, higher numbers bring strength to the dollar but the impact is not always substantial.


GBP/USD

The pair remained above the 50 period Exponential Moving Average Friday and even tested 1.3280 resistance on the back of a worse than expected U.S. GDP but a break did not occur.



Technical Outlook

Although the latest impulse is bullish and the pair is trading above the 50 period Exponential Moving Average, the picture is blurry until we will see a break of the horizontal channel created by 1.3280 resistance and 1.3070 support. For today, we expect another touch of the moving average and if price moves below it, a touch of 1.3070 zone is very possible.

Fundamental Outlook

The British Manufacturing PMI is released at 8:30 am GMT. Just like the U.S. indicator with the same name, this survey is derived from the opinions of purchasing managers and usually, higher numbers than the forecast 49.1 generate strength for the Pound.

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WEEKLY ANALYSIS: THE US DOLLAR RESUMES ITS ASSAULT, WITH BEARS THREATENING SUPPORT


EUR/USD

Weekly Analysis: The first part of last week was bullish but later on, the US Dollar made a spectacular comeback on the back of better than expected U.S. economic data so the week ended with the bears in control.


Technical Outlook

Price bounced lower near the 1.1200 zone and has now returned below the 50 period Exponential Moving Average. Early during the week we may see small retracements (better observed on the lower time frames probably) but the momentum belongs to the bears and this is likely to generate a break of 1.1060 en route to 1.1000 psychological zone. The Relative Strength Index is pointing downwards and the Stochastic is about to cross, both agreeing with a move lower and strengthening our bearish bias.

Fundamental Outlook

After a busy week, now things calm down a bit as the week ahead offers a lackluster environment. The first notable event of the week comes Wednesday in the form of the U.S. JOLTS Job Openings; the indicator shows the number of job openings, excluding the farming industry and offers a look at future levels of employment but the impact is often mild.

Thursday the US Dollar will be affected by the Unemployment Claims, an indicator that tracks changes in the number of jobless people, but Friday will be the busiest day of the week: on the Euro side we have the German Preliminary Gross Domestic Product, the main gauge of economic performance and for the US Dollar the Retail Sales will be the main market mover. Later in the day the University of Michigan will release their Consumer Sentiment, a survey that tries to gauge the overall opinion of consumers regarding economic conditions and acts as a leading indicator of consumer spending.


GBP/USD

Last week the Bank of England made the bold decision to cut the interest rate from 0.50% to 0.25% and this stopped bullish momentum, pushing price almost 350 pips lower.



Technical Outlook

The control now belongs to the bears and the support around 1.3070 is threatened. This week we expect a break of this level and then a continuation of the move into lower territory, with the zone around 1.2800 as target. Keep in mind that the horizontal channel created by 1.3280 resistance and 1.3070 support is not clearly broken so we don’t exclude the possibility of bullish movement if 1.3070 cannot be broken.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound has a slow week ahead, with the only major indicator being the Manufacturing Production released Tuesday. It tracks changes in the total value of output generated by the manufacturing sector and usually has a medium impact on the Pound, with higher numbers strengthening it.

[GDMFX 0]

WEEKLY ANALYSIS: US DOLLAR REMAINS STRONG AHEAD OF U.S. INFLATION DATA, FOMC MEETING MINUTES


EUR/USD

Weekly Analysis: The pair climbed last week and nullified the drop seen a week before. The fundamental scene was quiet until Friday, which was the busiest day of the week but was filled with disappointing U.S. data.



Technical Outlook

Price is currently ranging and deciding the next move but the short term bias is bullish as seen from last week’s action. After failing to break 1.1060, the pair bounced into 1.1210 resistance but rejection is clearly seen here (the last daily candle has a huge upper wick). The 50 period Exponential Moving Average is flat, meaning the balance doesn’t clearly belong to either side, and this combined with the shape of the candle we talked may generate bearish impulse. If this is the case, we expect a drop into 1.1000 zone. A break of 1.1200 zone will open the door for 1.1335 but unless the fundamental side agrees, we don’t expect that resistance to be touched this week.

Fundamental Outlook

Monday we don’t have any major announcements on the calendar but Tuesday action picks up with the release of the German ZEW Economic Sentiment (survey of about 275 German professional analysts and investors regarding overall economic conditions) and the more important U.S. Consumer Price Index (CORE version, which tends to have a higher impact). The CPI is the main gauge of inflation and the Fed closely watches it when deciding interest rate levels, thus the impact on the US Dollar is usually strong.

Wednesday the FOMC Meeting Minutes come out, offering insights into the reasons that determined the latest rate decision and possibly offering hints about future changes, followed Thursday by the Philly Fed Manufacturing Index, which is a leading indicator of economic health derived from the opinions of manufacturers in the Philadelphia district. Friday is an uneventful day, without major releases.


GBP/USD

Despite worse than expected U.S. economic data, the Pound continued to depreciate against the US Dollar throughout last week and is now a step closer to historical support.



Technical Outlook

After the break of the horizontal channel created by 1.3280 resistance and 1.3070 support, the pair continued in the direction of the break, as it was anticipated and now it seems headed towards the historical low at 1.2796. Until it gets there, we will probably see some retracements to the upside but we don’t expect 1.3070 to be broken in the process.

Fundamental Outlook

The first event of the week for the British Pound is the release of the Consumer Price Index, scheduled Tuesday. As mentioned before, this is the main gauge of inflation and has a strong impact on the currency, with higher numbers strengthening it, given the fact that current inflation is considered too low.

Wednesday we take a look at the U.K.’s employment situation with the release of the Claimant Count Change, an indicator that tracks changes in the number of unemployed persons. The last important release of the week is scheduled Thursday in the form of the British Retail Sales; this type of sales represents a major part of the entire economic activity and higher numbers usually strengthen the Pound. As always the U.S. events will have a direct impact on the pair’s movement throughout the week.

[GDMFX 0]

WEEKLY ANALYSIS: EURO APPROACHING PRE-BREXIT LEVELS, POUND BOOSTED BY POSITIVE ECONOMIC DATA


EUR/USD

Weekly Analysis: Last week the pair climbed for over 200 pips, approaching the place where the Brexit move started. A major role was played by the dovish stance of the Fed as revealed by the FOMC Minutes. 



Technical Outlook

The bullish move started at 1.0911 has nullified the major part of the Brexit fall but 1.1340 resistance may hinder further upside action. The Relative Strength Index and the Stochastic are overbought, increasing the chances of a bounce lower from here but the current bias is bullish so if 1.1340 can be broken early in the week, we expect a climb into 1.1415 and possibly 1.1450.

Fundamental Outlook

The week ahead is filled with medium-impact indicators and only a few that can really be considered market movers. Monday we don’t have anything on the economic calendar and Tuesday the German Manufacturing PMI will affect the Euro, while the New Home Sales will be the main catalyst for the US Dollar, followed Wednesday by the Existing Home Sales.

Thursday the main focus will be on the German IFO Business Climate, a survey with a huge sample of about 7,000 businesses that asks respondents to give their opinion regarding current business conditions as well as a 6-month outlook. The greenback will be influenced by the release of the Durable Goods Orders, an indicator that chows changes in the total value of orders for goods with a life expectancy of more than 3 years.

Friday the Preliminary version of the U.S. Gross Domestic Product is released, showing changes in the total value of services and goods produced by the United States economy and Fed Chair Janet Yellen will speak at the Jackson Hole Symposium. The exact time is not yet known and will be announced during the week. 


GBP/USD

Most of the British economic data that came out last week was better than anticipated (including inflation, jobs and retail sales) and this, coupled with the dovish FOMC Minutes, took the pair above resistance.



Technical Outlook

The current move can be considered just a retracement for the bearish move that took place earlier but 1.3070 resistance was breached so if the bears cannot bring price back below this level, we will probably see a climb into the 50 period Exponential Moving Average. On the other hand, if the break of 1.3070 will be short-lived, we expect the pair to move closer to last week’s low at 1.2865.

Fundamental Outlook

Only one major indicator is scheduled this week for the Pound: the Second Estimate Gross Domestic Product. This is less important than the Preliminary version which was already released but it still has a high impact on the Pound because it is the main gauge of overall economic performance. The indicator will be released Friday.

U.K. representatives will participate at the Jackson Hole Symposium that starts Thursday so we may see Pound volatility, depending on the matters discussed.

[GDMFX 0]

WEEKLY ANALYSIS: NFP TO ‘MAKE OR BREAK’ THE US DOLLAR RALLY


EUR/USD

Weekly Analysis: Last week belonged to the bears, who managed to bring the pair significantly lower after a bounce at resistance. Fed Chair Yellen’s speech at the Jackson Hole Symposium was interpreted as positive for the US Dollar and it became the biggest market mover of the week.



Technical Outlook

The pair finished last week right on the 50 days Exponential Moving Average and below 1.1210, with both oscillators moving down and coming from overbought. The position and direction of the oscillators indicate that the pair will continue to move south but the 50 days EMA and its vicinity to price may be a reason to believe that a move up is next. Early in the week we will probably find out if we are dealing with a bounce or break; the former will likely take the pair back up into 1.1340 and if the latter comes true, we may see advances towards 1.1060. 

Fundamental Outlook

The week starts with a slow Monday, but continues Tuesday with the always important German Consumer Price Index, a key measure of inflation. The same day the Consumer Confidence survey will affect the US Dollar and Wednesday we take a first look at the American jobs market with the release of the ADP Non-Farm Employment Change. This version is released by Automatic Data Processing (ADP) and excludes from calculation government jobs and the farming industry.

Thursday is a slow day for the Euro and on the US Dollar side we have the Manufacturing PMI, a survey of purchasing managers that tries to gauge their opinions regarding the health of the manufacturing sector. Friday will be the busiest day of the week, with the main event being of course the Non-Farm Payrolls, a report that tracks changes in the total number of employed individuals, excluding the farming industry. Usually this release creates high volatility and possibly irregular movement, so caution is recommended.


GBP/USD

After a perfect bounce at resistance, the pair had 2 bearish days that erased most of the Pound gains obtained earlier in the week. The pair still finished higher than it started the week but the balance of power is not heavily tilted towards either side.



Technical Outlook

The resistance at 1.3280 combined with the 50 days Exponential Moving Average created a strong confluence zone that rejected the bullish advance with pin-point accuracy. The move down is likely to extend into the support at 1.3070 and there the next medium term direction will be decided: a break will make 1.2865 the next target, while a bounce higher will open the door for another encounter with 1.3280.

Fundamental Outlook

The Pound has a light economic calendar ahead, with the only notable releases being the Manufacturing PMI and the Construction PMI that come out Thursday and Friday respectively. Both act as leading indicators of economic health, with higher numbers strengthening the Pound. As always, the U.S. events will have a direct and possibly strong impact on the pair.

__________________

[GDMFX 0]

WEEKLY ANALYSIS: NFP CREATES MIXED MOVEMENT, FOCUS SHIFTS ON ECB RATE MEETING


EUR/USD

Weekly Analysis: The pair moved without conviction last week, bouncing above and below the 50 period Exponential Moving Average and between support and resistance. The NFP report showed a worse than expected number, weakening the US Dollar but hawkish comments form a Fed official nullified the move and turned the pair south.



Technical Outlook

After a failed attempt to break 1.1150 early during the week, the pair climbed and pierced the resistance at 1.1240 but then quickly reversed and finished the week on support. The latest impulse is bearish and the fact that despite a disappointing jobs report, the US Dollar is gaining against the Euro, makes us believe that we will see a break of 1.1150 and a move into 1.1060. If the pair doesn’t remain below the 50 period EMA and reverses direction again, the first target is 1.1240, followed by 1.1340.

Fundamental Outlook

U.S. banks will be closed Monday, celebrating Labor Day and no major indicators will be released as a result. On the Euro side we don’t have important releases either but the Group of 20 Meetings (G20) will continue (Sunday is the first day) and this may generate volatility.

Tuesday the United States will release the Non-Manufacturing PMI, which is less important than the Manufacturing PMI but can still create strong movement if the actual number shows a big difference from the forecast.

Wednesday we have another slow day for both currencies in the pair but Thursday action picks up with the important ECB interest rate announcement, followed by Mario Draghi’s press conference. The rate is expected to remain the same (0.00%) but the day of the release is almost always full of strong moves, especially during Draghi’s press conference. Friday the Eurogroup Meetings start but other than that, we don’t have any other major events.


GBP/USD

The Pound bulls scored a major victory last week and closed the week at the highest level since July. The Pound benefited from optimistic economic data while the greenback was hit with some disappointing numbers throughout the week.



Technical Outlook

The resistance at 1.3280, which acted as a strong level in the past, was broken last week. This could be a major victory for the bulls, if they manage to keep the pair above the mentioned level and above the 50 period Exponential Moving Average. During this week we expect the upside to prevail and the pair to move above the minor resistance at 1.3370, towards 1.3500 area but this doesn’t exclude the possibility of smaller moves south, in the form of retracements.

Fundamental Outlook

The first release of the week is the Services PMI, scheduled Monday, a survey that doesn’t always have a strong impact unless the difference between actual and forecast is substantial. The next release is scheduled Wednesday: the Manufacturing Production, an indicator that shows changes in the total value of goods produced by the manufacturing sector. The same day we have the Inflation Report Hearings; during these hearings, BOE Governor Mark Carney will testify on inflation before the Parliament's Treasury Committee but the impact differs from meeting to meeting.

[GDMFX 0]

WEEKLY ANALYSIS: US DOLLAR MAKES TIMID ADVANCES. U.S. RETAIL SALES, INFLATION DATA ON THIS WEEK’S WATCHLIST


EUR/USD

Weekly Analysis: Early last week the US Dollar was hit with disappointing economic data and this allowed the pair to climb close to 1.1340 resistance. A big portion of the Euro’s gains were erased during Thursday’s ECB press conference but the week still ended higher than it started.



Technical Outlook

The pair is not showing a clear trend and the oscillators are giving mixed signals (Stochastic is moving up, coming out of oversold while the RSI is turning slowly lower) but it’s clear that rejection was present around 1.1340. The daily candle that came close to this resistance has a long upper wick and was followed by a bearish candle that confirmed the sell signal; this makes us anticipate a drop into the 50 period Exponential Moving Average and the bullish trend line seen on the chart above. If this area will be broken early during the week, we expect a move below 1.1150, otherwise we will probably see another attempt to break 1.1340 resistance.

Fundamental Outlook

The week starts slow as Monday lacks any major events; Tuesday action picks up with the release of the German ZEW Economic Sentiment and the same day ECB President Mario Draghi will speak at a ceremony in Trento. We don’t expect his speech to trigger huge moves but caution should be used nonetheless.

Wednesday we have another slow day, followed by a full calendar Thursday when the U.S. Retail Sales are released, as well as the U.S. Producer Price Index, which shows changes in the price charged by producers for their goods. This indicator has inflationary implications because a higher price charged by the producers will be eventually paid by the consumer, and that’s what makes it important.

Friday we take a look at United States inflation with the release of the Consumer Price Index, an indicator that shows changes in the price paid by consumers for the goods and services they purchase. The same day the University of Michigan will release their Consumer Sentiment, a survey that gauges the opinions of consumers regarding current economic conditions.


GBP/USD

The Pound was heavily affected by economic indicators last week and moved according to the readings posted. Better than expected data brought it up in the first part of the week but the second part was disappointing and the Pound weakened.



Technical Outlook

The bounce at 1.3445 took the pair into the 50 period Exponential Moving Average and into the support at 1.3280 so we are now dealing with a ‘bounce or break’ scenario that will decide the next medium-to-short term direction. A bounce will make 1.3445 the target for the week, while a break will put the bears in control, making 1.3070 the target. The oscillators are curving downwards, close to overbought and this slightly favors the bears but control doesn’t clearly belong to either side.

Fundamental Outlook

The first important release of the week is the British Consumer Price Index, a key gauge of inflation that shows changes in prices paid by consumers for the products they purchase. The indicator is scheduled Tuesday and is followed Wednesday by the Claimant Count, a report that shows changes in the total number of unemployed people who asked for social aid.

Thursday will be the most important day of the week for the Pound, with the main event being the Bank of England interest rate decision. At the same time a Monetary Policy Summary comes out, detailing the reasons that stood behind the rate decision. Earlier during the day the British Retail Sales are released, so we are in for a busy day but Friday the Pound will have a lackluster economic calendar.

[GDMFX 0]

WEEKLY ANALYSIS: BEARISH BREAKOUTS. THE US DOLLAR REIGNS AGAIN?


EUR/USD

Weekly Analysis: The US Dollar finally had a good week, strengthening against the Euro and breaking the bullish trend line seen on the Daily chart. The main catalyst was the better than expected U.S. Consumer Price Index, released Friday.



Technical Outlook

After a relatively long period of indecision, the pair finally managed to pick a direction and we expect this impulse to continue. Now the 50 days Exponential Moving Average and the bullish trend line are broken and this makes the bias bearish but keep in mind that 1.1150 is not clearly broken so there’s still a chance of a bounce here. We favor the short side and a move into the 1.1000 area but if current support holds, we expect another encounter with 1.1240.

Fundamental Outlook

As usual, the first day of the week will be slow in terms of economic releases but action picks up Tuesday with the U.S. Building Permits. More permits means that activity in the construction sector will increase and this usually strengthens the greenback but the impact is not always very high.

Wednesday will be the busiest day of the week for the US Dollar as the Fed will announce the interest rate decision and will release a FOMC Statement outlining the reasons that stood behind the rate vote. Soon after the announcement, Fed Chair Janet Yellen will hold a press conference during which we expect increased volatility.

Thursday ECB President Mario Draghi will speak at the European Systemic Risk Board, in Frankfurt and the on the US Dollar side the Existing Home Sales will be the only notable event. The week ends Friday with the release of the German Manufacturing and Services PMIs, which are medium impact indicators but can have a positive effect on the Euro is they show higher numbers than forecast.


GBP/USD

The Pound closed last week at its weakest point since August 17, with Friday being the worst day of the week. The pair dropped more than 250 pips on the back of comments made by U.K. Chancellor of the Exchequer Philip Hammond regarding the willingness to give up Britain’s single-market membership in the European Union in order to achieve immigration restrictions, according to Bloomberg.



Technical Outlook

The key support at 1.3070 was broken by a strong candle and the fundamental scene doesn’t favor the Pound, while the US Dollar benefits from a stronger than expected CPI (inflation data). In the current scenario the fundamentals and the technical aspect point towards the downside for the pair and this makes our bias bearish, anticipating a move into 1.2865 zone.

We don’t expect price to travel in a straight line to get there so it’s very possible to see some sort of bullish retracement, at least on the lower timeframes. The first potential resistance is now 1.3070, followed by the 50 period Exponential Moving Average.

Fundamental Outlook

The entire week lacks any major news releases for the Pound so the US Dollar events will hold the headlines. Worth mentioning is the release of the Public Sector Net Borrowing, scheduled Wednesday; the indicator shows the difference between spending and income for public corporations and the government. A number above zero shows deficit so the higher the number the bigger the deficit. This indicator is not known to be a major market mover but it may increase volatility because the week lacks other important indicators.

[GDMFX 0]

WEEKLY ANALYSIS: EURO STILL IN RANGE-MODE, US DOLLAR FEEBLE AHEAD OF DRAGHI AND YELLEN’S TESTIMONIES


EUR/USD

Weekly Analysis: Last week we saw some bullish action that nullified the US Dollar gains from a week before but the pair was confined in a relatively small range and movement wasn’t strong.



Technical Outlook

The 50 days Exponential Moving Average is still flat and the pair reverses all directional moves so we can safely say that control doesn’t clearly belong to either side. The first barriers for the pair this week are 1.1240 as resistance and 1.1150 as support; a break of the former will open the door for a touch of 1.1340 while a break of the latter will likely take price into 1.1060. Until the pair breaks one of the two lines, our bias is neutral.

Fundamental Outlook

The week starts in full force Monday with the release of the German IFO Business Climate (a large survey of about 7,000 businesses) and Mario Draghi’s testimony before the Committee on Economic and Monetary Affairs of European Parliament. The latter event is prone to trigger high volatility and possibly irregular movement so caution is recommended.

Tuesday focus shifts on the US Dollar for the release of the U.S. Consumer Sentiment, a survey that asks about 5,000 households to give their opinions on current and future economic conditions. Wednesday Fed Chair Yellen will testify before the Committee on Financial Services and another notable release is the U.S. Durable Goods Orders, an indicator that tracks changes in orders for goods with a life expectancy of more than three years. The testimony is of course the more important event of the two and may generate strong US Dollar movement.

Thursday we take a look at the United States Gross Domestic Product (Final version), which is considered the main gauge of overall economic performance and the week finishes Friday with the German Retail Sales and the European Flash Estimate version of the Consumer Price Index.


GBP/USD

The pair showed mixed movement last week, initially dropping, then climbing just to fall again during the last day of the week. Movement has slowed down but the latest impulse is bearish



Technical Outlook

The bulls attempted to take the pair above 1.3070 but after a small climb above the mentioned level, price dropped and now the door is open for a touch of 1.2865 support. The Stochastic is oversold and looks to cross upwards so we will most likely see some bullish movement this week but as long as the pair remains below 1.3070, our bias is bearish for a touch of the support mentioned earlier.

Fundamental Outlook

The week ahead is slow for the Pound as far as economic releases are concerned: the busiest day will be Friday when the Final Gross Domestic Product and the Current Account are released. The former is the main measure of the economy’s health and the latter shows the difference between the value of imported and exported goods and services. Even if there are not a lot of economic releases, this doesn’t mean that the pair will have a slow week in terms of movement and as always, the U.S. events will have a direct impact.

[GDMFX 0]

WEEKLY ANALYSIS: NON-FARM PAYROLLS – THE KICK THE MARKET NEEDS


EUR/USD

Weekly Analysis: The pair ended another sideways week and so far nothing seems to take it out of its slumber. Friday was the most active day, with the Euro weakening due to a Deutsche Bank possible fine imposed by the U.S. Department of Justice for the sale of mortgage-backed bonds.



Technical Outlook

The 50 days Exponential Moving Average continues to move flat and the pair is trapped between 1.1280 resistance and 1.1150 support. Until one of these barriers is broken, price is in range-mode and neither side is in control, so our bias is neutral but we must warn traders that often after a sideways period, the pair tends to breakout strongly in one direction or the other. This week important U.S. data comes out so we expect the mentioned breakout to happen.

Fundamental Outlook

German Unity Day is celebrated Monday, thus German banks will be closed; on the US Dollar side we have the Manufacturing PMI, a survey of purchasing managers that acts as a leading indicator of economic health, focused on the manufacturing sector.

Tuesday is a slow day for the Euro and US Dollar but Wednesday action picks up with a first look at U.S. employment data with the release of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding government jobs and the farming sector.

Thursday is another slow day and Friday the U.S. Non-Farm Payrolls come out, showing how many new jobs were created during the previous month. This is widely viewed as the most important jobs related indicator for the United States economy and usually it creates huge movement, with higher numbers strengthening the greenback.


GBP/USD

Similar to the euro-dollar, the pair traded mostly sideways and remained below resistance for the entire last week. The United Kingdom didn’t release important economic indicators and this contributed to the lack of action.



Technical Outlook

The bulls made timid attempts to break 1.3070 resistance but trading volume remained low throughout the week and no major developments took place. The lack of determination from both sides makes our bias neutral but we must note that the 50 days Exponential Moving Average is still moving downwards and price is trading below it; also the resistance at 1.3070 is still holding and all this slightly tilts the balance towards the short side. First minor support is located at 1.2945 (better seen on a 4-hour chart), followed by the more important 1.2865.

Fundamental Outlook

The first three days of the week are reserved for the three PMIs that focus on the health of their respective sectors: Monday the Manufacturing PMI comes out, followed Tuesday by the Construction and Wednesday by the Services PMI. These are surveys derived from the opinions of purchasing managers from each of the three sectors and usually a higher value for any of them, brings Pound strength.

The last important release of the week is scheduled Friday in the form of the Manufacturing Production, an indicator that shows changes in the total value of output generated by the manufacturing sector. A higher reading is usually beneficial for the Pound but the impact is limited at times.

[GDMFX 0]

WEEKLY ANALYSIS: BRUTAL POUND DROP AS BREXIT FEARS MATERIALIZE


EUR/USD

Weekly Analysis: Surprisingly, last week’s events did not bring the pair out of its range. Support was breached but the bears didn’t follow through and a worse than expected NFP brought the pair back up, close to the opening price of the week.



Technical Outlook

The support at 1.1150 appeared broken but the pair decided to do a quick turn and erased the drop. Indecision continues to rule over this pair and now the 50 days Exponential Moving Average is the first point of interest: a move above it will take price into 1.1280 and possibly 1.1340 but a bounce here will mean that 1.1150 will be broken soon. Keep in mind that the moving average is flat and price bounces between support and resistance; a strong breakout is expected.

Fundamental Outlook

Monday the banks in the United States will be closed, in observance of Columbus Day and no major indicators will be released for neither one of the currencies in the pair. Tuesday action picks up with the release of the German ZEW Economic Sentiment survey but other than that we don’t have anything important on the calendar.

Wednesday the FOMC will release the Minutes of their latest meeting, containing details about the reasons that determined the rate vote, and more importantly, the document can contain hints about the next rate hike. If this is the case, then the US Dollar will probably have a strong reaction.

Thursday we don’t have anything important on the calendar and the trading week ends Friday with the release of the U.S. Retail Sales and the University of Michigan Consumer Sentiment survey. Both are considered high-impact indicators and can strengthen the greenback in case of higher than anticipated numbers.


GBP/USD

The Pound experienced a so called “flash crash” late last week and the pair posted a tremendous drop. Speculation attributes the drop to fears about a hard Brexit early next year but the exact reason is not clearly known.



Technical Outlook

The pair is currently “high risk” and extreme caution should be used if trading it. Although most of the losses were erased, the possibility of another drop is high as the Pound is vulnerable and prone to sudden moves. Potential resistance sits around 1.2800 but the technical aspect will be overshadowed this week by unscheduled speeches (if any) of British politicians and/or representatives of the Bank of England. 

Fundamental Outlook

The entire week is slow for the Pound as far as economic releases are concerned. However, we expect strong movement given last week’s tremendous drop and increased volatility.

[GDMFX 0]

WEEKLY ANALYSIS: EURO WEAKENS, FOCUS SHIFTS ON ECB INTEREST RATE ANNOUNCEMENT


EUR/USD

Weekly Analysis: Finally the pair started to pick up some speed last week and now the bears are in control. The US Dollar strength was partly due to the FOMC hinting towards a rate hike later this year and partly due to better than expected U.S. economic data.



Technical Outlook

Price moved below the previous support at 1.1060 and then re-tested it, turning it into resistance so we expect this level to reject future moves up. The bias is bearish for the week, with the first important target being the support at 1.0910; there’s a minor hurdle at 1.0955 and we expect this to be broken during the early days of the week. The oscillators are approaching oversold and this increases the chance of a bounce into the previously mentioned resistance but once this potential retracement is complete, downside movement is likely to resume.

Fundamental Outlook

The week opens with a light calendar and action picks up Tuesday when the United States will release their Consumer Price Index, the main gauge of inflation. Current levels are considered too low, so a higher than anticipated value will likely strengthen the US Dollar.

Wednesday the U.S. Building Permits come out, offering insights into construction sector activity (a permit is the first step required before starting to build). Thursday the European Central Bank takes center stage with the Interest Rate announcement and the press conference that follows shortly. No change is expected for the rate but almost always this event generates strong and often irregular movement. The same day the EU Economic Summit begins and will continue Friday, when no other major indicators are released.


GBP/USD

The Pound continued to weaken against the US Dollar last week and is currently surrounded by a negative sentiment which is likely to bring further downside movement.



Technical Outlook

The pair created a new intermediate low at 1.2090 and then started to move almost sideways. Resistance is located at 1.2480 but we don’t expect the pair to move that high and instead, we anticipate a break of 1.2090 support. The Relative Strength Index is deep in oversold territory and this may trigger some moves north but overall the pair is still on shaky ground, prone to sudden moves.

Fundamental Outlook

Tuesday the first important British event of the week comes out: the Consumer Price Index, a gauge of inflation that shows changes in the price that consumers pay for the products they purchase. Higher numbers usually strengthen the Pound.

Wednesday we take a look at UK’s unemployment situation with the release of the Claimant Count Change (shows changes in the number of people who asked for unemployment related social help) and the last important release of the week is the British Retail Sales, scheduled Thursday. UK representatives will participate in the EU Economic Summit and this may generate volatility on the Pound.

[GDMFX 0]

WEEKLY ANALYSIS: EURO HEADING FOR KEY SUPPORT, BOE GOVERNOR CARNEY TO TESTIFY ON BREXIT CONSEQUENCES


EUR/USD

Weekly Analysis: Last week belonged to the bears, with the last 2 days being the most active. Euro weakness was mainly generated by the ECB Meeting and Draghi’s press conference.



Technical Outlook

The June low created by the Brexit vote was taken out last Friday and it looks like the pair’s next destination is the key support zone around 1.0800. The Relative Strength Index is just entering oversold and the Stochastic is already there so we expect a bullish retracement to come when the 1.0800 mark is touched or even sooner. The previous support levels (1.0955 and 1.0910) may turn into resistance and reject a possible move up; if these levels become resistance, the chances of a move into 1.0800 will increase.

Fundamental Outlook

The first day of the week ahead is focused on Eurozone Manufacturing and Services PMI but these are medium impact indicators so we don’t expect strong movement. Action picks up Tuesday with the release of the German IFO Business Climate, a well respected survey due to its large sample of about 7,000 businesses. On the US Dollar side we have the Consumer Confidence, another survey focused on the opinions of respondents regarding overall economic conditions.

The next major release comes Thursday in the form of the U.S. Durable Goods Orders, followed the same day by the U.S. Pending Home Sales and the week ends Friday with the release of the German Consumer Price Index and the Advance version of the U.S. GDP. The last two events of the week may have the strongest impact because one measures inflation and the other is the main gauge of an economy’s performance, both key elements for a currency’s strength.


GBP/USD

The Pound moved in a range last week, with some strength generated by better than expected inflation data; however, most of the gains were erased later in the week.



Technical Outlook

The pair is under bearish pressure and we expect to see a move closer to 1.2090 this week. It must be noted that the Relative Strength Index is still in oversold territory and the bears had difficulties breaking 1.2090 in the past. This may push price higher once (and if) the mentioned support is touched again but the pair is in a downtrend so our overall bias is bearish.

Fundamental Outlook

Tuesday the Pound is likely to show increased volatility and irregular movement because Bank of England Governor Mark Carney will testify on the consequences of the Brexit vote before the House of Lords Economic Affairs Committee. We recommend extreme caution at the time.

The other important event of the week is the release of the British Gross Domestic Product, scheduled Thursday. Although we only have 2 major events for the Pound this week, both of them have the potential to generate strong movement; as always, the U.S. releases will directly impact the pair’s direction.

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WEEKLY ANALYSIS: US DOLLAR STEALS THE SPOTLIGHT: RATE ANNOUNCEMENT AND NFP RELEASE


EUR/USD

Weekly Analysis: The US Dollar weakened last week, with Friday being the most active day. The decline was generated by FBI’s decision to reopen Clinton’s email case; depending on new developments on that matter, we may see further greenback weakness.



Technical Outlook

Price bounced at 1.0850 and moved past 1.0955, with the Relative Strength Index and Stochastic exiting oversold, going up. We expect the push up to extend into the 50 period Exponential Moving Average but the pair is still in a downtrend (although fragile) so it’s very likely to see a bearish move when that zone is reached. A break of the 50 EMA will make 1.1150 the first bullish target.

Fundamental Outlook

The week ahead starts Monday with the release of the German Retail Sales and Eurozone Estimate Consumer Price Index but these are likely to generate just a medium impact on the Euro. Tuesday French and Italian banks are closed in observance of All Saints Day, so we expect low volatility coming from the Euro’s side and on the U.S. side the Manufacturing PMI is the only notable release.

Wednesday is a huge day for the US Dollar because the Fed will announce the interest rate and will release a FOMC Statement that will explain some of the reasons that determined the rate decision. No change is expected yet, but the event usually generates strong movement.

The final major release of the week is scheduled Friday in the form of the U.S. Non-Farm Employment Change, a report that is widely considered the most important jobs data in the United States. Since this week we have the rate announcement and the NFP (usually these are not released the same week), we expect strong movement on all US Dollar pairs.


GBP/USD

The pair moved sideways for almost the entire last week and all directional impulses were quickly reversed. The Pound benefited from a better than expected GDP value but this strengthened it just momentarily.



Technical Outlook

The bears tried twice last week to break the support at 1.2090 but failed and price stalled. If the pair moves into this support for a third time, it will either break it or it will shoot up. If 1.2090 is broken, we don’t have any immediate support below it, while to the upside we have minor resistance at 1.2325. This level will be the first bullish target if 1.2090 holds. Our bias is neutral, anticipating a strong breakout.

Fundamental Outlook

The first major release of the week is the Manufacturing PMI, scheduled Tuesday, followed Wednesday by the Construction PMI and Thursday by the Services PMI. These are leading indicators of economic health, focused on business conditions and derived from the opinions of purchasing managers from the respective sector. The impact is often mild but usually, higher numbers strengthen the Pound.

Thursday the Bank of England will also release their Inflation Report, containing inflation and economic expectations for the next 2 years and the same day the interest rate is made public, as well as a Monetary Policy Summary that offers insights into the reasons that determined the rate vote. As always, the U.S. events released throughout the week will have a direct and potentially strong impact on the pair.