Gdmfx - Weekly News

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WEEKLY ANALYSIS: US DOLLAR BIG MOVERS AHEAD: FED INTEREST RATE, NON-FARM PAYROLLS


EUR/USD

Weekly Analysis: After the gap seen a week before, the pair started to move almost sideways and both bulls and bears seem to have lost interest. Part of this slow directional movement can be attributed to the lack of major releases last week.



Technical Outlook

After breaking 1.0850 the pair established resistance around 1.0945 and remained between the two levels for the entire week. Now the Relative Strength Index and the Stochastic are both overbought, which is usually an early indication that price may be coming down in the near future. The weekly gap is not closed and usually price returns to where the gap originated, so we may see an extended move down but this is not a certainty; also, the time it takes for the gap to close is unknown. For now the levels to watch are 1.0945 as resistance and 1.0850 as support; a break of either one may trigger an extended move in that direction.

Fundamental Outlook

Monday most banks across Europe will be closed, celebrating Labor Day and this is likely to generate irregular volatility and choppy price action, so caution is advised. On the US Dollar side we have the Manufacturing PMI, which is a survey derived from the opinions of purchasing managers regarding business and economic conditions.

Tuesday is a slow day but action picks up Wednesday when the Fed will announce the interest rate (no change expected from the current <1.00%) and the will release the FOMC Statement, which contains details about the reasons that influenced the rate decision.

Thursday we have another slow day, without major releases and the trading week finishes Friday with the always important Non-Farm Payrolls, an indicator that tracks changes in the number of employed people, excluding the farming industry.


GBP/USD

The pair continued last week the bullish momentum started when British Prime Minister May called for a snap general election, and exited the horizontal channel that confined it for more than a week.



Technical Outlook

Although the pair paused and moved sideways for more than a week, we didn’t see a clear retracement to the downside and such a move is due, considering the overbought condition of the Relative Strength Index and Stochastic. The current up move may extend into the resistance at 1.3050 but once and if it gets there, we expect a bounce lower. Also keep in mind that 1.3000 is a big round number and price will probably react to it as well.

Fundamental Outlook

Monday UK banks will be closed in observance of May Day and the rest of the week the Pound will be affected by the release of three Purchasing Managers’ Indexes: Tuesday the Manufacturing PMI comes out, followed Wednesday by the Construction PMI and Thursday by the Services PMI.

These are surveys of purchasing managers from the respective sectors, which act as leading indicators of economic health but usually the impact is low-to-medium; however, numbers above expectations tend to strengthen the Pound. Of course, the pair will be directly affected by the U.S. indicators released throughout the week.

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WEEKLY ANALYSIS: FRENCH PRESIDENTIAL ELECTION: ROUND TWO


EUR/USD

Weekly Analysis: Last week the Fed decided to keep the rate unchanged as expected, they didn’t give strong hints about a June hike. The employment data released Friday was better than anticipated but the previous number was revised lower and overall the US Dollar weakened, allowing the pair to climb.



Technical Outlook

The previous week ended with price right on the psychological level at 1.1000. Usually the market reacts to big, round numbers and the Relative Strength Index is very close to overbought, so all this increases bearish pressure and might generate a move lower in the form of a pullback. However, it must be noted that the pair is in an uptrend, which was just renewed by the break of the previous high at 1.0945. If the psychological resistance at 1.1000 is broken easily, we expect the upside to prevail and the pair to move towards the next resistance, located at 1.1120.

Fundamental Outlook

Monday French banks will be closed in observance of Victory Day but the rest of Europe will do business as usual. The most important release of the day will be the German Factory Orders, an indicator that shows changes in the value of purchase orders placed with manufacturers. Keep in mind that Sunday the second round of the French Presidential Election takes place and we expect price action to be heavily affected throughout the beginning of the week.

Tuesday and Wednesday there are no notable releases on the schedule but action picks up a little Thursday with the U.S. Producer Price Index, an indicator that tracks changes in the price charged by producers for their goods. It has inflationary implications because a higher producer price ultimately leads to a higher consumer price, but the impact is not always notable.

Friday is a busy day for the US Dollar, with three important releases: the U.S. Consumer Price Index (a key gauge of inflation), the Retail Sales and the University of Michigan Consumer Sentiment, a survey that shows the opinions of about 500 consumers regarding economic and business conditions. Also Friday the G7 Meetings start, attended by central bankers from the 7 member states.


GBP/USD

Most of last week’s price action was ranging, with the pair trading closely above 1.2850. The strongest movement was seen Friday, on the back of U.S. employment data.



Technical Outlook

The previous resistance at 1.2850 was tested from above and price bounced higher, thus we can now consider this level support. The pair is making higher highs and higher lows, indicating that it is currently in an uptrend, so we expect to see a touch of the next level of importance, located at 1.3050; 1.3000 is also important because it is a big, round number. The pair is likely to retrace lower when one of these levels is touched, but after said retracement, the uptrend will probably continue if key support is not broken.

Fundamental Outlook

The Pound has a lackluster week ahead, except for Thursday when the Bank of England will release their Inflation Report but will also announce the Official Bank Rate, the rate votes of the MPC members and the Monetary Policy Summary, outlining the reasons behind the votes. There’s no change expected for the rate (currently 0.25%) but this cluster of events is likely to trigger increased volatility. UK representatives will attend the G7 Meetings that start Friday.

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WEEKLY ANALYSIS: UPTRENDS LOSE MOMENTUM. US DOLLAR BACK ON TRACK?


EUR/USD

Weekly Analysis: Last week started strong for the bears, who managed to take the pair into 1.0850 support but most of the US Dollar gains were erased Friday on the back of disappointing U.S. data and rumors that the ECB may start to taper its quantitative easing.



Technical Outlook

This week we will probably see another test of 1.1000 zone, as current momentum seems to belong to the bulls. If this resistance area can be surpassed, the next destination will become 1.1100 – 1.1120 but we have a slow economic week ahead and this may generate ranging movement, without major advances to either side. To the south, the first notable zone of support is the confluence between 1.0800 level and the 50 days Exponential Moving Average. A break of this zone may trigger an extended move down.

Fundamental Outlook

The first notable event of the week is the release of the Eurozone Flash version of the Gross Domestic Product, scheduled Tuesday and followed later in the day by the U.S. Building Permits. Wednesday we take a look at Eurozone inflation with the release of the Final version of the Consumer Price Index, which although is the least important of the three versions, can still generate strong movement.

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WEEKLY ANALYSIS: UPTRENDS LOSE MOMENTUM. US DOLLAR BACK ON TRACK?


EUR/USD

Weekly Analysis: Last week started strong for the bears, who managed to take the pair into 1.0850 support but most of the US Dollar gains were erased Friday on the back of disappointing U.S. data and rumors that the ECB may start to taper its quantitative easing.



Technical Outlook

This week we will probably see another test of 1.1000 zone, as current momentum seems to belong to the bulls. If this resistance area can be surpassed, the next destination will become 1.1100 – 1.1120 but we have a slow economic week ahead and this may generate ranging movement, without major advances to either side. To the south, the first notable zone of support is the confluence between 1.0800 level and the 50 days Exponential Moving Average. A break of this zone may trigger an extended move down.

Fundamental Outlook

The first notable event of the week is the release of the Eurozone Flash version of the Gross Domestic Product, scheduled Tuesday and followed later in the day by the U.S. Building Permits. Wednesday we take a look at Eurozone inflation with the release of the Final version of the Consumer

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WEEKLY ANALYSIS: WHAT GOES UP MUST COME DOWN. IS THE BULL-RUN CLOSE TO AN END?


EUR/USD

Weekly Analysis: The pair showed massive bullish movement last week, broke several resistance levels and climbed for approximately 280 pips. US Dollar weakness seen across the board was the main catalyst behind the move.



Technical Outlook

The immediate destination seems to be the resistance at 1.1240, where we expect to see a bounce lower, forming a retracement. However, we don’t expect this pullback to go below 1.1120 – 1.1100 and once support has been established, the chances of another push to the north will increase. If 1.1240 is broken, the next resistance is located 100 pips higher, at 1.1340. To the downside 1.1120 is the first support, followed by 1.1000 but currently the pair is in a clear uptrend so we favor the upside.

Fundamental Outlook

The pair has a slow start of the week, with the Eurogroup Meetings being Monday’s only notable event. Action picks up a bit Tuesday with the release of the German IFO Business Climate, a survey derived from a very large sample of about 7,000 businesses and focused on the respondents’ opinions on current business conditions as well as a 6-month outlook. On the US Dollar side we have the U.S. New Home Sales numbers, released later in the day.

Wednesday ECB President Mario Draghi will speak in Madrid at the First Conference on Financial Stability, organized by the Bank of Spain. Later that day the FOMC will release the Meeting Minutes, containing details of their last interest rate vote but also, possible hints about future rate hikes.

Thursday French and German banks will be closed in observance of Ascension Day and the trading week ends Friday with the U.S. Preliminary Gross Domestic Product, which is an economy’s main gauge of performance and an always-important indicator that can strongly affect the currency.


GBP/USD

The pair traded higher last week and climbed into 1.3050 resistance after a bounce off of 1.2850 support. The Pound benefited from positive economic data but also the US Dollar weakened against most of its counterparts and these facts combined generated the push into resistance.



Technical Outlook

The first touch of 1.3050 triggered a fast bounce lower, which seemed to have 1.2850 as target; however, all the Pound losses were erased the next day and now the pair is testing 1.3050 again. A break of this important level would score another victory for the bulls and would open the door for a move into 1.3430. Keep in mind that we are talking about almost 400 pips so even if the target is reached, it probably won’t happen in a week unless surprising events take place. To the downside, 1.2850 is the first support, followed by 1.2770 and the 50 days EMA.

Fundamental Outlook

The Pound will only be affected by two major events this week. The first is the Inflation Report Hearing, scheduled Tuesday, when Bank of England Governor Mark Carney will testify on economic situation and inflation before the Parliament's Treasury Committee. The other event is the release of the British Second Estimate version of the Gross Domestic Product, scheduled Thursday.

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WEEKLY ANALYSIS: U.S. NFP DATA TO “MAKE OR BREAK” THE DOLLAR’S RECOVERY STARTED LAST WEEK


EUR/USD

Weekly Analysis: For the entire last week the pair consolidated below 1.1240 resistance and the bull run came to a halt, preparing the stage for a deeper move south. The economic scene didn’t present any market moving events and this contributed to the overall situation.



Technical Outlook

Several Daily candles pierced 1.1240 resistance but failed to close above it, thus showing clear signs of rejection and making us anticipate a move lower, which will have 1.1120 – 1.1100 as first target. Despite the failure at 1.1240, it must be noted that the pair is still in an uptrend a significant low hasn’t formed yet. This means that a potential break of 1.1240 will probably take the pair into the next resistance, located at 1.1340.

Fundamental Outlook

Monday ECB President Mario Draghi will testify about the economy before the Economic and Monetary Affairs Committee. This is potentially a big mover for the Euro and will probably generate increased volatility. U.S. Banks will be closed, in observance of Memorial Day.

Tuesday the German Preliminary Consumer Price Index will be the highlight on the Euro side, while the US Dollar will be affected by the Consumer Confidence, a survey that acts as a leading indicator of consumer spending.

Wednesday we take a look at European inflation with the release of the Flash Estimate version of the Consumer Price Index and Thursday U.S. jobs data is released in the form of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the farming sector and Government.

The week ends Friday with the most important U.S. jobs report: the Non-Farm Payrolls. Similar to the previous indicator, this one shows changes in the total number of employed people, excluding the farming sector but including Government jobs. Usually a number above expectations shows increased economic activity and strengthens the US Dollar.


GBP/USD

The Pound took a hit last week, dropping for more than 250 pips. Brexit concerns, including the approaching of the June 8 election and the ability of British Prime Minister May’s party to win that election, seem to be the main reason behind the drop.



Technical Outlook

After failing to break 1.3050 key resistance, the pair dropped into the 50 days Exponential Moving Average and into the support at 1.2770. The way price behaves here will be very important for medium term direction because we are dealing with a confluence zone (two or more technical elements meet in the same place or close vicinity) and a break would show increased bearish pressure, making 1.2570 – 1.2550 the next destination. To the upside, 1.3050 remains the main resistance but a move into this level would have to be backed by strong fundamentals.

Fundamental Outlook

The Pound has a slow week ahead, which starts with the Spring Bank Holiday on Monday. No high-impact indicators will be released until Thursday when the Manufacturing PMI comes out, followed Friday by the Construction PMI. Both are surveys of purchasing managers from the respective sectors and act as leading indicators of optimism and economic health. Higher numbers usually strengthen the Pound but the impact is not always high if the actual number comes close to the forecast.

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WEEKLY ANALYSIS: A FULL WEEK AHEAD: BRITISH PARLIAMENTARY ELECTIONS, ECB RATE DECISION


EUR/USD

Weekly Analysis: Last week the bulls maintained control and managed to push the pair above 1.1240 resistance, helped also by a much worse than expected Non-Farm Payrolls reading.



Technical Outlook

After a retracement and a perfect bounce at 1.1120, the pair moved back into 1.1240 resistance and this time the level was broken decisively. This means that the uptrend has resumed and price is on its way to the next resistance, located at 1.1340 – 1.1350. It must be noted that the Relative Strength Index and Stochastic have spent a lot of time in the upper part of their channels and although this is normal during an uptrend, it can also mean that a deeper pullback may soon follow. If price moves below 1.1240, it will encounter strong support at 1.1120.

Fundamental Outlook

French and German banks will be closed Monday in observance of Whit Monday, and this will probably affect volatility, generating choppy price action. On the US Dollar side we have the ISM Non-Manufacturing PMI, a survey of purchasing managers from outside the manufacturing sector, which acts as a leading indicator of economic health and optimism.

Tuesday and Wednesday are slow days for both currencies but action picks up Thursday when the ECB will announce their decision on where to set the interest rate and ECB President Draghi will hold the usual press conference, discussing the rate decision and answering journalists’ questions. Usually volatility surges during the press conference, especially if Draghi offers hints about future rate changes. The trading week will end with another day that lacks major releases on either side.


GBP/USD

The pair had a very choppy week but it showed that for the time being the US Dollar is not strong enough to break horizontal support or the 50 days Exponential Moving Average. The week lacked major economic releases and this contributed to the choppy action.



Technical Outlook

Most of last week’s daily candles are small and with large wicks, which is a sign of indecision from both sellers and buyers. For the time being the 50 days Exponential Moving Average and the support at 1.2770 are holding, also the US Dollar was weakened by disappointing Non-Farm Employment numbers and all this suggests that the pair will climb towards 1.3050. However, it must be noted that this week the British Parliamentary Elections will take place and this will heavily affect the Pound, so the technical aspect will be secondary.

Fundamental Outlook

The first event of the week is the release of the British Services PMI, scheduled Monday; usually this survey creates volatility only if the actual reading differs from expectations. Probably the biggest movement on Pound pairs will be seen Thursday when the UK Parliamentary Elections take place. Caution is recommended throughout the day.

Friday the British Manufacturing Production is released, showing changes in the total value of goods generated by the manufacturing sector. Higher numbers usually strengthen the Pound but same as with the Services PMI, the impact is bigger if the actual reading differs from expectations.

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WEEKLY ANALYSIS: POUND ON SHAKY GROUND AFTER BRITISH PARLIAMENTARY ELECTIONS, US DOLLAR SHOWS SIGNS OF RECOVERY


EUR/USD

Weekly Analysis: Last week the ECB announced they’ve reduced inflation expectations for 2017 and the years to follow. This was the main reason for a drop seen Thursday but other than that, price action was choppy and without clear direction.



Technical Outlook

The pair retraced after reaching a high at 1.1283 and moved below 1.1240, showing increased bearish pressure. The Relative Strength Index reached its 70 level several times during the last period, becoming overbought and showing bearish divergence (price is making higher highs while the oscillator is making lower highs). These facts, combined with the ECB stance on inflation, make us believe that the pair is headed lower, possibly into the 50 days Exponential Moving Average. The first hurdle is the support at 1.1120 but if price bounces higher from there, we may see another encounter with 1.1240.

Fundamental Outlook

The week starts slow, without any major indicators released on Monday but Tuesday action picks up with the release of the German ZEW Economic Sentiment and U.S. Producer Price Index. Both releases have the capacity to move the currencies strongly, but the impact is lower if the actual number matches expectations.

Wednesday will be a big day for the US Dollar because 3 major releases are scheduled: the U.S. CPI (key inflation gauge), the U.S. Retail Sales and the Fed will announce the interest rate which is expected to increase to <1.25% from the current <1.00%. All this is likely to generate increased movement on all US Dollar pairs, so caution is recommended.

Thursday is a slow day for both the US Dollar and Euro and the trading week ends Friday with the release of the European Final Consumer Price Index and the University of Michigan Consumer Sentiment, which is a survey that tries to gauge the confidence of consumers in economic conditions.


GBP/USD

The British Parliamentary Elections resulted in a hung Parliament, meaning that the Conservative Party won but didn’t manage to take enough seats to establish a majority. This triggered a sharp drop for the Pound and a break of several support levels.



Technical Outlook

Given the current political situation in the United Kingdom, the Pound is likely to continue to weaken and to head into the next support located at 1.2570. The pair is now trading below two important levels (1.2850 and 1.2770) and below the 50 days Exponential Moving Average so the bias is bearish from a technical standpoint as well as fundamental. However, this is still a high-risk pair and we recommend caution trading it.

Fundamental Outlook

The first important release for the Pound is the British Consumer Price Index, scheduled Tuesday. The indicator is the main gauge of inflation and shows changes in the price that consumers pay for the goods and services they purchase.

Wednesday’s highlight is the release of the Average Earnings Index, an indicator that shows changes in the price paid for labor by businesses and Government. The last major event of the week for the Pound is the announcement of the BOE interest rate, along with a Monetary Policy Summary, scheduled Thursday. As always, the U.S. events will have a direct and possibly strong influence on the pair’s direction.

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WEEKLY ANALYSIS: RANGE-BOUND TRADING CONTINUES AMID A LACKLUSTER FUNDAMENTAL SCENE


EUR/USD

Weekly Analysis: Last week’s main story was the Fed rate hike from <1.00% to <1.25% but also the hawkish Fed press conference. The positive vibe that surrounded the US Dollar reversed an earlier climb towards 1.1300 and brought the pair into 1.1100 territory.



Technical Outlook

After reaching a weekly high at 1.1295 the pair dropped close to 1.1120 support and now the greenback is benefiting from a positive market sentiment. We expect to see an encounter with 1.1120 and the 50 days Exponential Moving Average early in the week but the pair is still in an uptrend, so once the 50 EMA is reached, we may see another push to the north. However, as long as last week’s high is not broken, our bias is bearish, aiming for a move into 1.1000 territory. 

Fundamental Outlook

The week ahead is surprisingly slow in terms of economic releases for both currencies in the pair. Monday and Tuesday we don’t have anything major on the economic calendar, while Wednesday’s only notable release is the U.S. Existing Home Sales. A higher than anticipated reading shows a healthy house market and this usually strengthens the US Dollar.

Thursday the focus shifts on the Euro for the release of the Eurozone Consumer Confidence, a survey that gauges the opinions of about 2,300 European citizens regarding economic conditions. Friday the center stage is taken by Purchasing Managers’ Indexes, namely the German Services and Manufacturing PMIs as well as the Eurozone Services and Manufacturing PMIs. On the US Dollar side we have the New Home Sales, an indicator that shows the annualized number of houses sold during the previous month.


GBP/USD

The pair has just completed a very choppy week, with price bouncing all over the place, especially in the later part of the week. The Bank of England has kept the rate unchanged but 3 out of the 8 MPC Members voted for an increase and this generated Pound strength. 



Technical Outlook

The last three Daily candles are showing long wicks and rejection at the 50 period Exponential Moving Average. This is a sign of indecision and lack of determination from both sides; the bulls cannot break the 50 EMA and the bears cannot take price lower. Due to these factors, our outlook is mostly neutral until a clear direction is established. However, it must be noted that the 50 period EMA and the level at 1.2770 form together a confluence zone of resistance, which may push price lower during the early stages of the week.

Fundamental Outlook

The Pound has an even slower fundamental week than the Euro and US Dollar, and the only notable indicator is the Public Sector Net Borrowing, scheduled Wednesday. The indicator shows the difference between spending and income for the Public Sector and a figure above zero indicates deficit, while a figure below zero shows excess. Lower numbers for this indicators are usually beneficial for the currency but the impact is often limited.

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WEEKLY ANALYSIS: YELLEN, DRAGHI, CARNEY: THE THREE MAJOR PLAYERS HAVE A FULL WEEK AHEAD


EUR/USD

Weekly Analysis: Last week the bears attempted to break support but the US Dollar strength faded and the pair started to move north, erasing almost all the losses incurred earlier in the week. Overall we had a neutral week, with price finishing close to where it started.



Technical Outlook

After a perfect touch of 1.1120 support, the pair bounced higher and erased the entire drop. This is the second time that 1.1120 clearly rejects falling prices and the pair is still trading above the 50 days Exponential Moving Average, so the bias remains bullish, anticipating a touch of 1.1240 and possibly 1.1280.

If price drops lower, it will encounter a strong support zone because the 50 EMA is climbing and together with 1.1120 will create a confluence zone. As long as the pair is trading above horizontal support and above the 50 days EMA, our outlook is bullish.

Fundamental Outlook

The week starts with the release of the German IFO Business Climate survey and the U.S. Durable Goods Orders, both scheduled Monday. These indicators are considered high-impact but lately their influence on the respective currency has diminished and a strong impact can only be seen if the actual number differs significantly from expectations.

Tuesday ECB President Draghi will deliver a speech in Portugal, at the European Central Bank Forum on Central Banking and later in the day, Fed Chair Janet Yellen will speak in London about the global economy, at the British Academy 'President's Lecture'.

Wednesday ECB President Draghi will participate in a panel discussion at the European Central Bank Forum on Central Banking, in Portugal. Thursday we take a look at German inflation with the release of the Preliminary Consumer Price Index, and on the US Dollar side we have the Final version of the U.S. Gross Domestic Product. The Final version is the least important out of the three (Advance, preliminary and Final), but its impact shouldn’t be overlooked.

Friday no high-impact indicators will be released but worth noting are the German Retail Sales, and Chicago Purchasing Managers’ Index, both with a medium impact on their respective currencies.


GBP/USD

The Pound had an interesting week, first weakening when BOE Governor mentioned that a rate hike is not likely to come very soon, and then erasing some of the losses on the back of hawkish comments made by a member of the Monetary Policy Committee.



Technical Outlook

Although the pair climbed during the latter part of last week, the bias remains bearish as long as price is trading below 1.2770 and below the 50 days Exponential Moving Average. Early this week, we expect to see a touch of the two resistance elements just mentioned and the way price behaves there, will decide the next move. A break would show increased bullish pressure and would make 1.2850 the first target, while a bounce would probably take the pair into 1.2570 – 1.2550.

Fundamental Outlook

Tuesday the Bank of England will release the Financial Stability Report, followed shortly by a press conference held by BOE Governor Mark Carney. This has the potential to be the biggest event this week for the Pound, so caution is recommended. Wednesday BOE Governor Carney will participate in a panel discussion at the European Central Bank Forum on Central Banking and this is another reason for possibly strong movement.

The Net Lending to Individuals will be released Thursday and Friday the Current Account comes out, showing the difference in value between imports and exports. The same day the British Final GDP comes out, but this version usually has a low impact on the currency.

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WEEKLY ANALYSIS: US DOLLAR IN THE SPOTLIGHT: NON-FARM PAYROLLS AND FOMC MINUTES


EUR/USD

Weekly Analysis: The Euro experienced a huge boost coming from Draghi’s hawkish comments made at the European Central Bank Forum, so the pair moved higher for the entire last week, breaking several resistance levels.



Technical Outlook

The strong move seen last week has renewed the uptrend and took the pair out of the choppiness it was in. Now the picture is bullish once again and the pair is trading above several broken resistance levels, which may turn into support this week. The resistance at 1.1450 is a key level that reversed rising prices in the past and the Relative Strength Index is overbought, so we must be wary of a pullback this week. The first potential support is located at 1.1350 but keep in mind that the US Dollar will be affected by important events this week.

Fundamental Outlook

The week starts pretty slow, with the release of the U.S. Manufacturing PMI scheduled Monday and followed Tuesday by a major Holiday: the U.S. Independence Day. American banks will be closed and volatility will be affected.

Wednesday the Fed will release the FOMC Minutes of their latest Meeting, revealing the reasons that stood behind the latest rate vote and Thursday we take a first look at the U.S. jobs market with the release of the ADP Non-Farm Employment Change.

Friday will probably be the busiest day of the week because the Group of 20 (G20) Meetings start and also the US Dollar will be heavily affected by the Non-Farm Payrolls, a report that is widely considered the most important U.S. jobs data.


GBP/USD

US Dollar weakness and hawkish comments made by BOE Governor Mark Carney generated a very strong week for the Pound and took the pair more than 300 pips higher.



Technical Outlook

The Sterling is clearly winning the battle against the US Dollar but the pair is facing a strong resistance at 1.3050 and the Relative Strength Index is very close to overbought territory. These facts make us anticipate a pullback once 1.3050 is reached; even if the level is broken, a retracement lower should soon follow. The next resistance is located at 1.3430 (observed better on a Weekly chart) but we don’t expect price to travel that entire distance this week.

Fundamental Outlook

This week will be mainly dedicated to the British PMI series. These are surveys that try to gauge the opinions of purchasing managers from each sector regarding economic conditions and overall health of the respective sector. The Manufacturing PMI is released Monday, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. British representatives will attend the G20 Meetings that start Friday so the Pound may be affected by the talks.

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WEEKLY ANALYSIS: MARKETS PREPARE FOR FED CHAIR YELLEN’S TESTIMONY


EUR/USD

Weekly Analysis: Last week the pair retraced lower, mostly due to overbought condition but after failing to break support, it returned to the levels seen in the beginning of the week. U.S. employment data was solid and brought the pair lower for the end of the week.



Technical Outlook

The pair is showing rejection again near 1.1450 resistance and the NFP report showed a better than anticipated reading, so its effects will be probably seen throughout this week. The pair is in a clear uptrend but for the short to medium term we expect to see a move into 1.1300 – 1.1280, mostly because the bulls failed twice to break the key resistance at 1.1450. However, if that resistance will be broken early in the week, we may see a move into 1.1500 but Fed Chair Yellen’s testimony is likely to decide the next move.

Fundamental Outlook

The week starts slow, with the first two days lacking any major events. Action picks up Wednesday when Fed Chair Yellen will testify before the House Financial Services Committee on the topic of the Semiannual Monetary Policy Report. Thursday she will testify on the same topic but this time before the Senate Banking Committee and the same day the U.S. Producer Price Index is released.

Friday the always important U.S. Consumer Price Index comes out, showing changes in the price paid by consumers for the goods and services they purchase and the final event of the week will be the U.S. Retail Sales. The Euro doesn’t have anything major on the calendar but the U.S. releases are considered high impact so we expect to see volatility throughout the week.


GBP/USD

Last week belonged to the bears after another failed attempt to move above 1.3050 resistance. Later in the week, the U.S. jobs data added more strength to the greenback and now the pair is approaching support.



Technical Outlook

The bullish move seen over the last weeks failed to break 1.3050 resistance and now the pair is moving south, with an overbought Stochastic and good downside momentum. The short term outlook is bearish, anticipating a touch of the support at 1.2850 and the 50 days Exponential Moving Average; if this barrier is broken, the next target will become 1.2770 but on the other hand, a break will probably generate a climb into 1.3000 area. 

Fundamental Outlook

The Sterling has a very slow economic week ahead, with the only notable indicator being the Average Earnings Index, released Wednesday. The index shows changes in the price that businesses and government pay for labor and usually has a high impact on the currency. Of course, the U.S. events will have a direct impact on the pair’s movement, as always.

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WEEKLY ANALYSIS: THE EUROPEAN CENTRAL BANK TAKES CENTER STAGE: INTEREST RATE DECISION AND PRESS CONFERENCE


EUR/USD

Weekly Analysis: The bulls remained in control and the pair closed last week strongly, on the back of a US Dollar sell-off triggered by weak inflation and retail sales data. However, Friday’s climb couldn’t take out the weekly top at 1.1490.



Technical Outlook

Price is now facing a cluster of resistance levels (1.1450 – 1.1490) and the uptrend is overextended, meaning that the pair travelled a long distance without a proper pullback. The Relative Strength Index first became overbought back in April and since then, it never visited the lower levels (now it is approaching overbought on a Weekly chart as well).

All this makes us anticipate a retracement this week, and possibly an encounter with 1.1350, followed by the 50 days EMA. However, it is very important to note that the pair is in a strong uptrend and the RSI has been overbought for a long time and price still continued higher, so the possibility of another bullish week shouldn’t be overlooked. Next strong resistance is in the 1.1600 area.

Fundamental Outlook

The first notable release of the week is the European Final version of the Consumer Price Index, scheduled Monday. Although this version is the least important out of the three, the CPI remains a high impact indicator because it’s the main gauge of inflation for the Eurozone.

Tuesday the only highlight for the Euro will be the release of the German ZEW Economic Sentiment, a survey of about 275 German investors and analysts, focused on their 6-month outlook for the economy. Lately this indicator has lost some of its impact but higher numbers suggest optimism and strengthen the Euro.

Wednesday is a slow day, with the only release being the U.S. Building Permits, an indicator that shows how many permits for new buildings were released during the previous month. It offers some insights into the U.S. house market but the impact is not always high.

Thursday may be the most volatile day of the week as the ECB meets to announce their interest rate and ECB President Mario Draghi will hold his usual press conference. The rate is not expected to change but the press conference usually triggers strong movement, especially if Draghi will offer hints about the next hike.


GBP/USD

After a brief dip below the 50 days Exponential Moving Average, the bulls took control and finished the week more than 200 pips above the open. Most of the climb was generated by weak U.S. CPI and Retail Sales data.



Technical Outlook

The resistance at 1.3050 was an important level and the breakout seen last week is likely to generate an extended move to the upside. The next resistance is located around 1.3250, followed by 1.3350 and the key level at 1.3450 but price will most likely retrace lower before the first resistance is reached. It’s also very possible to see a re-test of the recently broken resistance and if this re-test is successful (price bounces at 1.3050), then the level will turn into support and the chances of an extended climb will increase.

Fundamental Outlook

The Pound will be affected by only two important releases this week. The first is the British Consumer Price Index, which is scheduled Tuesday and the second is the Retail Sales, coming out Thursday. The CPI is the main gauge of inflation and is closely watched by the Bank of England when they decide the interest rate; on the other hand, sales made at retail levels represent the majority of consumer spending, which in turn accounts for a large part of the entire economic activity, so we can expect to see strong movement when these indicators are released.

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WEEKLY ANALYSIS: HIGHLIGHTS OF THE WEEK AHEAD: FOMC RATE DECISION AND U.S. GROSS DOMESTIC PRODUCT


EUR/USD

The pair posted a strongly bullish week and moved above last year’s high located at 1.1616 on the back of a hawkish Draghi press conference but also due to US Dollar heavy selling.



Technical Outlook

After the break of 1.1450 resistance the bulls regained total control over the pair and broke last year’s high, threatening 1.1713, which is the highest level since August 2015. The outlook remains bullish but the Relative Strength Index has become overbought on a Daily chart and even on a Weekly chart, suggesting that a pullback will soon follow. From a short term perspective we expect a re-test of 1.1616 followed by a move into 1.1700 territory.

Fundamental Outlook

The trading week starts Monday with a couple of medium-impact indicators for the Euro: the Eurozone Manufacturing and Services PMIs, followed the same day by the U.S. Existing Home Sales. We don’t expect substantial movement at the time of release but usually a number above expectations for any of the three indicators, strengthens the respective currency.

Tuesday’s highlight will be the release of the U.S. Consumer Confidence, a survey of about 5,000 households that tries to gauge the overall opinion regarding business conditions, job availability and the economic situation in general.

Wednesday will be the most important day of the week as the Fed meets to decide the interest rate, which this time is not expected to change (currently <1.25%). The FOMC will also release a statement outlining the reasons that determined the rate decision.

Thursday is a slow day, with the only notable release being the U.S. Durable Goods Orders (shows changes in the total value of orders placed for goods with a life expectancy of more than 3 years). Friday we have a busier day, with the focus on the German Preliminary Consumer Price Index (main gauge of inflation) and the U.S. Advance Gross Domestic Product, which is the main gauge of overall performance of the economy.


GBP/USD

After the failed break of resistance, the Pound tumbled and the pair posted a bearish week. One of the main factors that triggered Pound weakness was the British CPI that missed the market consensus and came out below expectations.



Technical Outlook

The pair is still in a choppy uptrend but the bulls are running out of steam and bearish pressure is mounting. This is shown by the failed break of 1.3050 resistance and the long-wicked candle that followed (price tried once more to move above resistance but failed). These facts make us anticipate a move into the 50 days Exponential Moving Average early in the week and the way price behaves there will reveal more hints about future direction.

Fundamental Outlook

The Pound has a very slow week ahead, with the only major release being the British Preliminary Gross Domestic Product, scheduled Wednesday. There are three versions of the GDP – Preliminary, Second Estimate and Final – but the Preliminary tends to have the highest impact, mainly because it’s the first in the series. As always, the U.S. releases will have a direct impact on the pair’s direction.

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WEEKLY ANALYSIS: U.S. NON-FARM PAYROLLS – RECOVERY CATALYST OR ANOTHER BLOW TO A WEAK US DOLLAR?


EUR/USD

Weekly Analysis: Despite being overbought, the Euro pushed higher last week and broke 1.1713, which was a level last reached in August 2015. The Fed maintained a target rate of <1.25% and the Rate Statement was perceived as dovish, so the US Dollar remained on the defensive.



Technical Outlook

Last week we saw a perfect re-test from above of the level at 1.1616 (highest price reached in 2016) and also a bullish break of 1.1713 (highest price reached since August 2015). Now 1.1616 is confirmed support and will play an important role in future price action. The pair is in a strong uptrend but the Relative Strength Index and the Stochastic are both overbought on a Daily and even on a Weekly chart, thus warning that retracements may soon follow. To the upside the next notable level is 1.1875 (last reached in 2010) followed by 1.2040 (last reached in 2012) but we don’t expect any of them to be touched this week unless surprising events take place.

Fundamental Outlook

The week starts pretty strong, with the release of the European Flash Estimate CPI and the U.S. Chicago area PMI, both scheduled Monday. Tuesday the main focus will be the U.S. Manufacturing PMI, a survey of purchasing managers from the manufacturing sector that acts as a leading indicator of economic health.

Wednesday we take a first look at the American jobs situation with the release of the ADP Non-Farm Employment Change, which is a report that tracks changes in the number of employed people in the U.S., excluding the farming sector and Government.

The last event of the week will probably be the most important as well: the U.S. Non-Farm Employment Change, scheduled Friday. Unlike the ADP version, this one is released by the Government and has a bigger impact, being considered the most important gauge of employment in the United States.


GBP/USD

The pair continued higher for most of last week, after completing a retracement that found support at 1.2930. Most of the climb was due to US Dollar weakness seen across the board.



Technical Outlook

The resistance at 1.3050 rejected rising price several times in the past but now the pair has moved above it for the second time in a short period, so this second break will probably generate additional movement to the north. If 1.3160 resistance is broken, we expect to see a move into 1.3250 but this week both currencies will be affected by major releases and events, so the technical side will be secondary.

Fundamental Outlook

The week starts with the British Manufacturing PMI, scheduled Tuesday, followed Wednesday by the Construction PMI and Thursday by the Services PMI. All three are derived from the opinions of purchasing managers and act as leading indicators of optimism and economic health.

Also Thursday, the Bank of England will release their Inflation Report (containing inflation projections for the next 2 years) and will announce the Interest Rate at the same time. Later, BOE Governor Mark Carney will hold a press conference, discussing the Inflation Report and this cluster of events will most likely trigger huge volatility, so caution is recommended.

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WEEKLY ANALYSIS: UPTRENDS SHOW WEAKNESS, US DOLLAR IS STAGING A TEMPORARY COMEBACK


EUR/USD

Weekly Analysis: Last week started in close vicinity of 1.1700 and the pair pushed higher, above 1.1875 but almost the entire climb was nullified Friday after the U.S jobs data came out better than anticipated and strengthened the greenback.



Technical Outlook

Given last week’s strong drop from 1.1875, this level is now confirmed resistance and will play an important role for future price action. The uptrend was overextended for a relatively long period (RSI and Stochastic overbought), so a drop was needed and the U.S. jobs data helped it materialize.

For this week we expect a continuation of the bearish move started Friday, with 1.1600 as target, followed by the 50 days Exponential Moving Average. It must be noted that the pair is still in a strong uptrend, so a move back up cannot be ruled out; if this is happens, the first target will be the resistance at 1.1875.

Fundamental Outlook

We won’t see any notable release for the Euro and US Dollar during the first two days of the week but action picks up a notch Wednesday with the release of the U.S. Preliminary Unit Labor Costs. This indicator tracks changes in the price that businesses pay for labor, apart from the farming sector, and acts as a leading indicator of inflation (a higher labor cost will eventually translate into a higher price for goods and services).

Thursday the Euro continues to be unaffected by major economic releases and on the US Dollar side we have the Producer Price Index, which tracks changes in the price that producers charge for their goods and acts as another indicator with inflationary implications (higher producer prices are usually passed on to the consumer).

Friday the focus remains on the US Dollar for the release of the U.S. Consumer Price Index, which tracks changes in the price that consumers pay for the goods and services they purchase. This is one of the main gauges of inflation in the United States and usually the release has a high impact on the currency, with higher numbers strengthening it.


GBP/USD

The Pound started to weaken last week after the Bank of England lowered inflation expectations and Governor Mark Carney adopted a dovish stance during his press conference. The U.S. Non-Farm Payrolls added fuel to the fire, strengthening the US Dollar and driving the pair lower, to finish the week below support. 



Technical Outlook

The US Dollar is staging a comeback against its counterparts, on the back of better than expected employment data and after a long period of general weakness. For this week we expect further downside, with the 50 days Exponential Moving Average as first and immediate target, followed by 1.2930 and 1.2850. A bounce at the 50 days EMA would invalidate such a scenario and would switch the momentum in the favour of the bulls once again.

Fundamental Outlook

The Pound has a very light economic week ahead, with the only notable release being the Manufacturing Production, scheduled Thursday. The indicator tracks changes in the total value of goods produced by manufacturers and acts as a leading indicator of economic health; its impact is usually high because Manufacturing makes up about 80% of the entire Industrial Production, thus higher numbers usually strengthen the Pound.

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WEEKLY ANALYSIS: RETRACEMENTS OR REVERSALS? US DOLLAR SHOWS MIXED SIGNALS AHEAD OF FOMC MINUTES


EUR/USD

Weekly Analysis: Last week the pair descended into the area between 1.1713 – 1.1700 but worse than expected U.S. inflation data weakened the US Dollar later in the week, so the pair bounced at support, moving higher.



Technical Outlook

Price is in a strong uptrend and the drop from 1.1875 to 1.1713 is considered a normal retracement after a long period of bullish movement. As long as the pair is trading above the 50 days Exponential Moving Average, with price making higher highs and higher lows, we consider the uptrend intact and we anticipate another encounter with 1.1875. If this resistance is broken, the next target will become the psychological resistance at 1.2000 (big, round number) but a bearish break of 1.1713 – 1.1700 would hinder this scenario.

Fundamental Outlook

Monday is a slow economic day for both currencies and Tuesday, French and Italian banks will be closed due to Assumption Day, so we can expect irregular volatility during the European session. The first important release of the week will be the U.S. Retail Sales, scheduled Tuesday.

Wednesday we have the Flash Gross Domestic Product on the Euro side and the US Dollar will be affected later in the day by the FOMC Meeting Minutes, a document that contains the details of the latest FOMC Meeting and reasons for the latest rate vote.

Thursday the U.S. Industrial Production will show changes in the total value of goods generated by the manufacturing, utility and mining sectors. The week ends Friday with the University Of Michigan Consumer Sentiment, which is a survey that tries to gauge the opinions of about 500 consumers regarding current and future economic conditions.


GBP/USD

The pair continued to drop after the bounce at 1.3250 resistance but encountered support at 1.2950 and started to move in a range, without clear direction for most of last week.



Technical Outlook

The 50 days Exponential Moving Average is flat and price is trapped inside a horizontal channel with 1.3050 as upper limit and 1.2950 as lower limit. Until one of these barriers is broken decisively, our view is neutral and we expect more of the ranging movement seen last week. Once the pair exits the channel, the first lower target will become 1.2850 followed by 1.2770; the upper target will be 1.3250 but such a big move will have to be supported by some positive British economic news.

Fundamental Outlook

We have a busier week than the one before, with three major releases for the Pound. The Consumer Price Index comes out Tuesday, showing changes in the price paid by consumers for the goods and services they purchase. This is also the main gauge of inflation, so its impact is usually very high.

Wednesday the Average Earnings Index will show changes in price that businesses pay for labor and Thursday the British Retail Sales come out, showing changes in the total value of sales performed through retail outlets. All these are high-impact indicators that will probably trigger strong movement on the pair.

Edited August 14, 2017 by GDMFX

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WEEKLY ANALYSIS: UPTREND WAVERS AS THE US DOLLAR FIGHTS FOR A COMEBACK


EUR/USD

Weekly Analysis: Most of last week’s price action took place around 1.1700 support, which appeared broken several times but the pair returned above it almost immediately. The fundamental scene was pretty dull, and didn’t generate strong moves.



Technical Outlook

The uptrend is weakened now because a lower high was printed last week (1.1840) but support is still holding and the latest candles show long wicks in their lower part, which is a sign of rejection. All this creates a mixed picture, without a clear bias but as long as the pair is trading above 1.1700 – 1.1713 and above the 50 days Exponential Moving Average, we expect to see a continuation of the uptrend and a move closer to 1.1875. A break of the mentioned support and a move below the 50 days EMA would be a strong sign that the uptrend is coming to an end.

Fundamental Outlook

The first notable release of the week is the German ZEW Economic Sentiment, scheduled Tuesday. The survey shows the opinions of about 275 German professional investors and analysts regarding the state of the economy for the next 6-months and usually has a medium impact on the currency.

Wednesday the focus remains on the German economy for the release of their Manufacturing and Services PMIs, which are surveys of purchasing managers regarding the health of the respective sectors. Usually the impact is medium but higher numbers show optimism and strengthen the Euro.

Thursday the Jackson Hole Economic Symposium will start and will be attended by central bankers, finance ministers and other personalities from around the globe. This event is held annually and can have a significant impact, depending on the matters discussed and the attitude of the speakers.

Friday the US Dollar will be affected by the U.S. Durable Goods Orders and the Jackson Hole Symposium will continue in Wyoming, so this can affect other currencies as well, not only the greenback.


GBP/USD

The British Consumer Price Index (main gauge of inflation) missed the market consensus of 2.7% and showed a reading of 2.6%. This triggered the biggest move of last week and brought the pair into the support at 1.2850 but the bearish momentum soon faded and support remained intact.



Technical Outlook

The pair is trading below the 50 days Exponential Moving Average, a fact which makes the short-to-medium term outlook bearish. However, we can see that for several days the bears have tried to break 1.2850 support and each time they failed, so this level will be this week’s main “player”. A bearish break will make 1.2770 the immediate target, followed by 1.2630 in the longer run. A bounce at 1.2850 will take the pair into the 50 EMA, followed possibly by 1.3050.

Fundamental Outlook

Tuesday the British Office for National Statistics will release the Public Sector Net Borrowing, which is a report that shows the difference between spending and income for the government and public corporations. A higher deficit usually weakens the Pound but the impact is not very high.

Thursday the Second Estimate British Gross Domestic Product is released, showing changes in the total value of goods and services produced by the economy. The GDP usually has a high impact on the currency so we expect to see increased volatility. The same day the Jackson Hole Symposium starts and British representatives will attend so the Pound may be affected.

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WEEKLY ANALYSIS: US DOLLAR FALTERS AGAIN, NON-FARM PAYROLLS EYED FOR NEXT BIG MOVE


EUR/USD

Weekly Analysis: Last week the pair reached the highest level since January 2015 on the back of a hawkish speech delivered by ECB President Mario Draghi at the Jackson Hole Symposium. Key resistance was broken and now the uptrend is resumed.



Technical Outlook

After a choppy start of the week, price finally broke out and moved above 1.1875, fueled by Draghi’s speech. Also, the market expected Fed Chair Yellen to be more hawkish but her speech at the Jackson Hole Symposium was disappointing and did not help the US Dollar.

Given the current situation we expect to see a move into the key psychological level at 1.2000, followed possibly by 1.2040, which is a level that last acted as support in 2012 (that’s a long time ago so we don’t know if the pair will react to it). A re-test of the recently broken level (1.1875) is very possible but the overall picture is clearly bullish.

Fundamental Outlook

The first notable release of the week is the CB Consumer Confidence, scheduled Tuesday. This is a survey of about 5,000 U.S. households that asks respondents to rate the overall level of economic conditions, both current and future. Consumer confidence is an early indicator of consumer spending so a higher number usually strengthens the US Dollar.

Wednesday we take a look at German inflation with the release of the Preliminary German CPI and later in the day the greenback will be affected by the ADP Non-Farm Employment Change and the U.S. Preliminary Gross Domestic Product.

Thursday the European Flash Estimate Consumer Price Index is released, showing changes in the price that consumers pay for the goods and services they purchase. This is the main gauge of inflation but its importance is dimmed by the fact that other EU member states have released inflation data earlier.

Friday the U.S. Non-Farm Payrolls come out, showing changes in the number of employed people, excluding the farming industry. This is widely considered the most important jobs data in the United States and its impact is always very high so caution is advised.


GBP/USD

The US Dollar had a great start of the week against the Pound, moving the pair into the support at 1.2770 but Yellen’s speech triggered a wave of US Dollar selling across the board and the pair climbed above 1.2850.



Technical Outlook

The bounce at 1.2770 support and the break of 1.2850 makes the short term bias bullish, anticipating a move into the 50 days Exponential Moving Average and the resistance at 1.2950. The way price behaves in that zone will decide the next direction: a bullish break will make 1.3050 the target and a bounce will probably take the pair back below 1.2850. The oscillators are moving up, coming from the lower levels and this increases the chance of a move into the 50 EMA.

Fundamental Outlook

Monday British banks will be closed due to Summer Bank Holiday and no economic data will be released. This will most likely affect volatility and price action.

Wednesday the Net Lending to Individuals will show changes in the total credit issued to individuals but the indicator is not known to have a high impact. A more important indicator is released Friday: the Manufacturing PMI. This is a survey of purchasing managers that gauges their opinion regarding the state of the manufacturing sector and acts as a leading indicator of economic health. As always, the U.S. data released throughout the week will have a direct impact on the pair’s movement.

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WEEKLY ANALYSIS: ECB INTEREST RATE AND PRESS CONFERENCE. SHOULD WE EXPECT A SURPRISE FROM DRAGHI?


EUR/USD

Weekly Analysis: After breaking above 1.2000 for the first time since 2015, the bulls failed to continue upside momentum in the latter part of last week and now the pair is trading close to support, ending the week with small losses.



Technical Outlook

The pair is still in a strong uptrend but it seems like it is about to enter a bearish phase. This is signaled by the very long wicks of the last few candles but also by the bearish divergence seen on the Daily chart above: price is making higher highs but the Relative Strength Index is only making lower highs.

This makes us anticipate a drop into the confluence zone created by the 50 days Exponential Moving Average and the support near 1.1700. On the other hand, a bullish bounce from the current support level (1.1875) will make 1.2000 the first target, followed by last week’s high at 1.2070.

Fundamental Outlook

Monday U.S. banks will be closed, celebrating Labor Day and the Euro will not be affected by important economic data either, so we expect a rather slow and possibly ranging session. The only notable data released Tuesday will be the U.S. Factory Orders (shows changes in the value of orders placed with manufacturers) and Wednesday things remains slow, with the ISM Non-Manufacturing PMI being the only notable release.

Action picks up Thursday when the European Central Bank will announce the interest rate (no change expected – currently 0.00%) and ECB President Mario Draghi will hold the usual press conference, which is known to create high volatility almost always. His attitude and answers will be carefully scrutinized by market participants but sometimes are misinterpreted and that’s when sudden changes of direction occur.

Friday will be another day without major economic releases, so the technical aspect will prevail.


GBP/USD

The pair had a very choppy week, climbing multiple times above 1.2950 resistance and then dropping below the 50 days Exponential Moving Average. The balance of power shifted several times but the week ended close to where it started.



Technical Outlook

Last week’s price action shows indecision from both sides and offers very little clues about the next direction. Usually, after a period of indecision, price shoots strongly in one direction or the other so we can expect a breakout to be followed by an extended move in that direction. To the upside 1.3050 is the first target and to the downside 1.2770 is key support. Once price reaches one of these targets, we may see pullbacks.

Fundamental Outlook

The first notable release of the week is the British Construction PMI scheduled Monday and followed Tuesday by the Services PMI. Both are surveys of purchasing managers from the respective sectors that act as indicators of optimism, with a medium impact on the Pound.

The last release of the week will be the Manufacturing Production, scheduled Friday. The indicator shows changes in the total value of goods produced by manufacturers and usually strengthens the Pound if it posts higher numbers.

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WEEKLY ANALYSIS: US DOLLAR GOING DOWNHILL. LOOKING TO INFLATION AND RETAIL SALES DATA FOR A BOOST


EUR/USD

Weekly Analysis: The Euro continued to strengthen last week, fueled by a positive ECB outlook regarding economic expansion. The pair breached the previous high and created a new one at 1.2092 but retraced lower in the last day of the week.



Technical Outlook

Price is in a strong uptrend but at the same time, it looks overextended. This suggests that we will likely see a pullback or a consolidation period before the pair can make significant new advances. The first resistance is located at 1.2070, followed by 1.2100 but currently rejection is present (long upper wick of the last candle, RSI shows bearish divergence) so we expect to see a ranging phase, with price spending some time between 1.2000 and 1.1875.

Fundamental Outlook

The first part of the week will be very slow, without notable releases on either side of the Atlantic. The U.S. Producer Price Index (PPI) will be the first major data release of the week, scheduled Wednesday and action picks up even more Thursday with the release of the U.S. Consumer Price Index, which is the main gauge of inflation, showing changes in the price paid by consumers for the goods and services they purchase.

Friday the U.S. Retail Sales numbers come out, showing changes in the total value of goods sold through retail outlets and later in the day the University of Michigan will release their Consumer Sentiment, which is a survey that gauges consumers’ opinions about economic conditions. Higher numbers for any of the indicators released throughout the week have the potential to strengthen the greenback.


GBP/USD

The US Dollar suffered heavy selling last week and was surrounded by an overall negative sentiment, so it weakened against most of its counterparts. The Pound capitalized on this weakness and made substantial advances, taking the pair 300 pips higher.



Technical Outlook

Early in the week we will probably see a touch of the resistance at 1.3250 but soon after, we expect a pullback. The pair has traveled a long distance in a short period of time and this type of price action is usually followed by a retracement. Also, the Relative Strength Index and Stochastic are both overbought, thus increasing the probability of a move lower. If 1.3250 is surpassed, the next destination will be the long term resistance at 1.3450 but after said pullback will occur.

Fundamental Outlook

Tuesday the British Consumer Price Index will offer information about the state of inflation in the United Kingdom and Wednesday the Average Earnings Index will show changes in the price that employers pay for work. Both these indicators usually have a high impact and higher numbers are beneficial for the Pound.

Thursday will be the busiest day as the Bank of England will announce the interest rate (currently 0.25%, no change expected) and will release a Monetary Policy Summary, outlining the reasons that determined the rate vote. As always, the U.S. data released throughout the week will have a direct impact on the pair’s movement.

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WEEKLY ANALYSIS: POUND BOOSTED BY RATE HIKE SPECULATION, US DOLLAR ON THE ROPES AHEAD OF FED MEETING


EUR/USD

Weekly Analysis: After failing to stay above 1.2070, the EUR/USD dropped and breached 1.1875 support, coming close to the 50 days Exponential Moving Average. The economic scene was calm for the Euro and the data for the US Dollar was mixed, with a better than expected CPI but disappointing Retail Sales.



Technical Outlook

It looks like the pair completed a retracement and is now bouncing at 1.1875 support, aiming for 1.2000 as immediate target. The uptrend is still in place but it has clearly lost some steam, so if the pair doesn’t break 1.2070 decisively this week, we will probably see a drop through 1.1875 and into the 50 days Exponential Moving Average. An important role will be played by the FOMC Meeting scheduled this week and Fed Chair’s press conference that follows.

Fundamental Outlook

The first release of the week is the Final version of the European Consumer Price Index, scheduled Monday. The CPI is the main gauge of inflation but the final version is the last in the series, so its impact is often muted by the earlier data.

Tuesday the German ZEW Economic Sentiment will show the opinions of about 300 German investors and professional analysts about a 6-month outlook for the economy and on the US Dollar side the Building Permits will be the most notable release.

Wednesday will be the most important day of the week as the FOMC will announce the interest rate, the economic projections and will release a rate Statement outlining the reasons that determined the rate decision. Half an hour later, Fed Chair Janet Yellen will hold a press conference discussing the rate outcome and answering journalists’ questions. This is when the US Dollar usually shows huge volatility, so caution is recommended.

Thursday’s only notable event is the U.S. Unemployment Claims and the economic week ends Friday with the German Manufacturing and Services PMIs, which are surveys of optimism among purchasing managers from the respective sectors.


GBP/USD

The Pound had a tremendous week, climbing more than 450 pips on the back of hopes that a rate hike will come sooner than expected. Inflation in the United Kingdom has increased and this boosted expectations that the Bank of England might hike until the end of the year. 



Technical Outlook

It’s clear that the Pound is enjoying a positive market sentiment, boosted by rate hike speculation. This is the highest point reached since the Brexit referendum but usually a move like the one seen last week will retrace before continuing higher. The first potential support is located at 1.3450 but this seems like a too distant target, given the Pound strength seen lately. However, we expect to see bearish moves (pullbacks) or a small period of consolidation before a stronger move can take place.

Fundamental Outlook

The Pound has a very slow economic week ahead, with the only major release being the British Retail Sales scheduled Wednesday. The indicator shows changes in the total value of sales made at retail level and usually has a high impact on the currency because retail sales represent a major part of consumer spending, which in turn accounts for a big part of overall economic activity.

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


EUR/USD

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



Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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



Technical Outlook

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

Fundamental Outlook

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

[GDMFX 0]

WEEKLY ANALYSIS: US DOLLAR ON SHAKY GROUND AHEAD OF NON-FARM PAYROLLS

EUR/USD

Weekly Analysis: In the early part of last week’s trading session the US Dollar made substantial advances and reached the support at 1.1713. However, some of the greenback’s gains were erased and the pair climbed back into the 50 days Exponential Moving Average.

Technical Outlook

The pair is trapped between 1.1713 support and the 50 days Exponential Moving Average and this opens up two possible scenarios: if price moves above the 50 EMA, it will probably break through 1.1875 and head closer to 1.2000, trying to resume the uptrend. On the other hand, if the pair bounces lower at the 50 EMA, this will prove that the momentum is shifting towards the short side and will probably generate a break of 1.1713 – 1.1700 and a move closer to 1.1600. From a long term perspective the pair is still in an uptrend.

Fundamental Outlook

The first event of the week will be the release of the U.S. Manufacturing PMI, scheduled Monday. This is a survey that tries to gauge the opinions of purchasing managers regarding economic and business conditions in the Manufacturing sector and acts as a leading indicator of optimism, with a medium impact in the greenback.

Tuesday German banks will be closed in celebration of German Unity Day and we don’t have anything major on the US Dollar side either. Wednesday action picks up with a first look at U.S. jobs situation: the ADP Non-Farm Employment Change. The report tracks changes in the number of employed people, excluding Government and the farming industry and tries to mimic the NFP which comes out 2 days later.

Thursday is a slow economic day for both the Euro and the US Dollar and the week ends Friday with the most important U.S. employment data: the Non-Farm Payrolls (NFP). The report shows changes in the number of employed people during the previous month, excluding the farming industry and is known to be a very strong market mover. Higher numbers usually strengthen the US Dollar because higher employment usually leads to increased consumer spending.

 

GBP/USD

US Dollar strength took the pair below 1.3450 support but momentum soon faded and price remained in a tight range for the rest of the week.

Technical Outlook

For the last 3 days the pair has been bouncing between 1.3350 support and 1.3450 resistance and this type of behaviour usually means that a strong breakout is in the making. From a longer term perspective the pair is in an uptrend and is trading above the 50 days Exponential Moving Average, so we favour a move up, through 1.3450. If the support at 1.3350 is broken, then the pair will likely move into the 50 days EMA and into the support at 1.3250.

Fundamental Outlook

The first release of the week is the British Manufacturing PMI, scheduled Monday, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are surveys that act as leading indicators of economic health, derived from the opinions of purchasing managers from the respective sectors but are not known to be strong market movers. However, higher numbers usually strengthen the Pound.

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WEEKLY ANALYSIS: UNCERTAINTY IN THE U.K. TRIGGERS MASSIVE MOVES TO THE SOUTH. WHAT’S NEXT FOR THE POUND?


EUR/USD

Weekly Analysis: Last week the pair remained in a relatively tight range, moving slightly below 1.1700 support but failing to break it. The Non-Farm Payrolls showed a disappointing figure, mostly because the storms that hit the U.S. had a bigger impact on the jobs market than anticipated.



Technical Outlook

As long as the bears cannot break the support at 1.1700 and price is trading below the 50 days Exponential Moving Average, the pair is in a range, without momentum to either side. This week we will most likely see a move outside one the two barriers and that will probably decide the next medium term direction. Our bias is mostly neutral until such a break occurs and after the break, the first downside barrier will become 1.1600, while to the upside 1.1875 is the first resistance.

Fundamental Outlook

The first two days of the week ahead lack major events on the economic calendar, so price action will be mostly decided by the technical aspect. Wednesday the FOMC will release the Minutes of their latest Meeting, a document which contains details about the reasons that influenced the latest rate decision but more importantly, it can contain hints about future increases.

Thursday ECB President Draghi will speak in a panel discussion at the Peterson Institute for International Economics and Friday will probably be the busiest day, starting with the U.S. Consumer Price Index and the U.S. Retail Sales. Inflation and sales made at retail levels are some of the main price drivers, so higher numbers for any of those can strengthen the respective currency.

The final release of the week will be the University of Michigan Consumer Sentiment, which is a survey that acts as a leading indicator of consumer spending.


GBP/USD

The pair ended the worst week in a year, dropping more than 350 pips. The move was generated by political uncertainty in the UK (rumors that Prime Minister May will be asked to step down) and worse than expected British economic data.



Technical Outlook

The current bias is definitely bearish, with a strong Dollar and a Pound affected by Brexit fears and political unease. We expect to see further downside movement but a 350 pips move is likely to generate some sort of retracement to the upside, possibly from the current support at 1.3050. If this is the case, we don’t expect price to climb above the 50 days EMA and if that mark is reached, the pair will likely resume downside movement.

Fundamental Outlook

The first notable indicator for the Pound will be released Tuesday in the form of the British Manufacturing Production, which is a measure of the output generated by manufacturers. The same day the National Institute of Economic and Social Research (NIESR) will release their GDP Estimate; however, this is often overlooked by market participants mostly because it is just an estimate and is not released by the Government. As always, the U.S. economic data will have a direct impact on the pair’s performance.