FOREX NEWS: EURO PUSHES ABOVE RESISTANCE, OVERALL PRICE ACTION STILL CHOPPY
EUR/USD
Forex News: The EU Economic Forecasts showed that growth is on the right track and this boosted the Euro during yesterday’s trading session, taking the pair above immediate resistance and above the 50 period Exponential Moving Average.
Technical Outlook
The pair continued its raging behaviour but broke above 1.1610 and above the 50 EMA, making the short term outlook bullish. If this bias continues, the pair will probably reach the top of the range, located at 1.1670 but it must be noted that although the last impulse is bullish, price is still not trending, in other words the next move is uncertain. A quick move below 1.1610 will bring the pair into the previous support at 1.1575.
Fundamental Outlook
Today U.S. banks will be closed in observance of Veterans Day and we expect this to affect volatility, especially in the NY session. The only notable release is scheduled at 3:00 pm GMT in the form of the University of Michigan Consumer Sentiment survey, which gauges the opinions of consumers regarding current and future economic conditions. Higher numbers than the anticipated 100.8 suggest that consumer spending is likely to pick up in the near future and this usually strengthens the US Dollar.
GBP/USD
The pair remained incredibly choppy during yesterday’s trading session and moved in a tight range, without a clear bias. The NIESR GDP Estimate was rescheduled for today so the pair wasn’t affected by economic data.
Technical Outlook
The type of price action seen lately doesn’t offer any hints for future direction but usually this type of tight and choppy movement is followed by a strong breakout. The direction of said breakout cannot be determined and will probably be influenced by the British economic data released today. The levels to watch remain 1.3100 as support and 1.3160 as resistance.
Fundamental Outlook
At 9:30 am GMT the British Manufacturing Production numbers come out, showing changes in the total value of goods generated by the Manufacturing sector. The anticipated change is 0.3% (previous 0.4%) and usually a higher number strengthens the Pound but the impact is limited if the actual reading matches the forecast.
As mentioned before, NIESR rescheduled for today the release of their GDP Estimate. The time is 1:00 pm GMT and the previous value is of course, unchanged at 0.4%.
FOREX NEWS: BULLS MAKE A PUSH FOR RESISTANCE. MARKET STILL RANGE-BOUND
EUR/USD
Forex News: U.S. consumer sentiment data disappointed Friday, allowing the Euro bulls to take price above the 50 period Exponential Moving Average and into the resistance at 1.1670. The pair posted fresh weekly highs but it didn’t exit the ranging phase.
Technical Outlook
The latest impulse favours the buyers but in the past the pair had difficulties breaking the resistance around 1.1670 and now it’s facing the same level again. A long upper wick is clearly seen in Friday’s price action and this is a sign of rejection; also, the Stochastic is above its 80 level (overbought) and the Relative Strength Index is approaching overbought territory. All this could be indicative of a bounce lower from the current level and if this happens, the 50 EMA will be the first target, where the next direction will be decided. A move above 1.1670 will take price into 1.1700 but we don’t expect a break of that hurdle.
Fundamental Outlook
The economic calendar is light today for both currencies, without any notable releases, thus the technical aspect will decide market direction.
GBP/USD
British Manufacturing Production increased 0.7% as opposed to the expected 0.3% and this was one of the reasons for Friday’s climb. Price bounced lower late in the session but the short term bias favours the bulls.
Technical Outlook
Although the latest momentum is bullish, the pair is still in a range from a longer term perspective and this means that we could very well see a move down from the current resistance (1.3225). To the downside the first notable level is 1.3175 (previous resistance that may turn into support), followed by the 50 period Exponential Moving Average. We don’t expect huge moves today, unless something surprising happens.
Fundamental Outlook
Similar to the Euro and US Dollar, the Pound will not be affected today by economic data releases and this may translate in a slow, ranging session.
FOREX NEWS: HEADS OF CENTRAL BANKS GATHER FOR PANEL DISCUSSIONS. BREAKOUTS EXPECTED
EUR/USD
Forex News: The pair showed a ranging session yesterday, approaching the 50 period EMA and then bouncing higher, without enough force to break resistance. The lack of major economic releases contributed to the slow movement.
Technical Outlook
Price remains range-bound, capped to the upside by the resistance at 1.1670 and to the downside by the 50 Exponential Moving Average. Today we have a busier day, with more economic data than yesterday, so we expect to see a break of horizontal resistance (1.1670) or dynamic support (50 EMA) and the break will probably decide the direction for the day. As long as these technical indicators are intact, our bias is neutral.
Fundamental Outlook
At 10:00 am GMT the Flash version of the Eurozone GDP comes out, showing the overall performance of the economy. The expected change is 0.6%, same as previous and usually a higher number strengthens the Euro but to a limited extent.
At the same time the German ZEW Economic Sentiment survey is released, showing the opinions of about 300 German institutional analysts and investors about the state of the economy, as well as an outlook for the next 6 months. The forecast is 19.8 and higher numbers show optimism, thus strengthening the single currency.
At the same time, 10:00 am GMT, ECB President Draghi, Fed Chair Yellen and BOE Governor Carney will participate in a panel discussion named “At the heart of policy: challenges and opportunities of central bank communication”. The discussion will take place at the Central Bank Communications Conference hosted by the ECB, in Frankfurt and the impact cannot be predicted but caution is recommended.
GBP/USD
He Pound dropped early in yesterday’s trading session due to concerns that British Prime Minister May could be asked to step down by her own political party. After dropping below 1.3100 support the pair recovered some of the losses.
Technical Outlook
Although price moved above 1.3100 after initially breaking it, the short term momentum still favours the bears and for today we expect to see a break of 1.3100 and a consequent move into 1.3030. As an alternate scenario, if the pair breaks the 50 period EMA to the upside, it will probably move into the resistance at 1.3175.
Fundamental Outlook
The day’s main event for the Pound will be the release of the British Consumer Price Index, scheduled at 9:30 am GMT and expected to show a change of 3.1% compared to the previous 3.0%. This is the main gauge of inflation and is carefully watched by the Bank of England when deciding where to set the interest rate. Higher values usually strengthen the Pound.
BOE Governor Carney will participate in the panel discussion mentioned earlier and this can generate increased volatility on Pound pairs.
FOREX NEWS: US DOLLAR UNDER HEAVY PRESSURE AHEAD OF INFLATION AND RETAIL SALES DATA
EUR/USD
Forex News: Selling pressure around the greenback increased yesterday and the pair broke above the resistance at 1.1670, a fact which triggered additional upside movement.
Technical Outlook
Yesterday the pair moved about 100 pips higher, which can be considered a huge move given the lack of volatility seen lately. Strong moves are usually followed by a pullback before price can advance further and this view is also supported by the fact that the Relative Strength Index and Stochastic are both overbought. After this potential retracement, we expect the upside movement to continue towards 1.1825 resistance but a lot will depend on the U.S. data released today.
Fundamental Outlook
It’s a big day for the greenback, with two important releases: the Consumer Price Index (CPI) and the Retail Sales, both scheduled at 1:30 pm GMT. The CPI shows changes in the price that consumers pay for the goods and services they purchase and acts as one of the main gauges of inflation. The forecast for today is 0.1% and higher numbers usually strengthen the currency. The CORE version of the indicator, which excludes food and energy from calculation will be released at the same time and expected to show a change of 0.2%.
The Retail Sales are expected to show a change of 0.0% from the previous 1.6% and because this is the main gauge of consumer spending, higher than anticipated numbers strengthen the US Dollar and the opposite is true for lower numbers.
GBP/USD
The pair remained relatively choppy yesterday, with some bearish movement generated by the worse than expected British CPI value (actual 3.0%, forecast 3.1%). Most of the action took place near 1.3100, without substantial developments.
Technical Outlook
Price action is choppy lately and all moves result in candles with long wicks, which is a clear sign of indecision. The ranging phase will continue until a breakout occurs. The levels to watch are 1.3100 (a break should be confirmed by a re-test), followed by 1.3030 to the downside. To the upside the 50 period Exponential Moving Average is the first potential resistance, followed by 1.3175.
Fundamental Outlook
At 9:30 am GMT the British Average Earning Index comes out, showing changes in the price paid by employers for labour. A higher number indicates that inflation may increase in the near future because if businesses pay higher labour costs, this will usually translate into a higher price paid by the consumer. Today’s forecast is 2.1%, while the previous was 2.2%.
FOREX NEWS: US DOLLAR POSTS MINOR GAINS, POUND BOOSTED BY RETAIL SALES NUMBERS
EUR/USD
Forex News: The Final version of the Eurozone CPI matched analysts’ expectations yesterday so the release didn’t have a substantial impact and the pair showed choppy movement throughout the day, with a bearish bias.
Technical Outlook
The last few candles show very long wicks, especially in their upper part, which is a sign that bullish pressure is not yet high enough to resume the upwards movement. Today we may see a move lower, into the support at 1.1735 but overall the pair remains in a short term uptrend and the Relative Strength Index has cleared its overbought condition so after the retracement finds support, we will probably see a move up.
Fundamental Outlook
Today at 8:30 am GMT, ECB President Mario Draghi will deliver a speech at the Frankfurt European Banking Congress. The impact of the event cannot be anticipated but caution is always advised when heads of central banks speak publicly.
On the US Dollar side we have the Building Permits, scheduled at 1:30 pm GMT and expected to show a reading of 1.25 Million. The indicator shows the annualized number of construction permits and acts as a gauge of activity in the construction sector; numbers above expectations usually strengthen the greenback but the impact is medium.
GBP/USD
The British Retail Sales came out above expectations yesterday and this was the main reason for the climb seen early in the session. However, the pair remained in a range overall.
Technical Outlook
Price is currently testing 1.3175 from above and if this level will turn into support, rejecting the pair higher, then we will most likely see an encounter with the resistance at 1.3225. A break of that level would show that the pair is ready to exit the range that confined it during the last period, and head into 1.3280. As long as price is trading above the 50 EMA our bias is slightly bullish.
Fundamental Outlook
The Pound will not be affected by economic data today, so the main focus will be the technical side and the U.S. release mentioned earlier.
FOREX NEWS: EURO IN THE SPOTLIGHT: ECB PRESIDENT DRAGHI TESTIFIES TWICE
EUR/USD
Forex News: Friday’s price action was characterized by a sharp climb that nearly touched 1.1825 resistance but soon after, the pair slowed down and consolidated below 1.1800. The U.S. construction data was better than anticipated but the impact was limited.
Technical Outlook
The pair has now printed a lower high and failed to break the resistance at 1.1825, which shows that upwards momentum is fading. This means that we will possibly see an encounter with Friday’s low at 1.1756 but overall today we expect the pair to remain between 1.1825 and 1.1756 support unless Draghi’s testimony offers surprises.
Fundamental Outlook
The day’s only notable event is the double testimony of ECB President Mario Draghi, before the European Parliament Economic and Monetary Affairs Committee. The topic is economy and monetary policy, so volatility is likely to increase during his speech, which is scheduled at 2:00 pm GMT.
Two hours later, at 4:00 pm GMT, the ECB President will testify again before the same Committee, but this time the topic will be the European Systemic Risk Board. Caution is advised during both speeches.
GBP/USD
The pair accelerated to the upside early during Friday’s session, only to drop abruptly soon after without apparent reason other than fresh sell orders.
Technical Outlook
Price is advancing higher but the pair is prone to sharp moves to either side. As long as 1.3175 support remains intact, the upside movement is likely to continue but overall we expect choppy price action. The levels to watch are Friday’s top at 1.3260 and the support mentioned earlier, together with the 50 period Exponential Moving Average.
Fundamental Outlook
The United Kingdom didn’t schedule any economic releases for today, so the technical side will take center stage.
FOREX NEWS: POUND IN THE LIMELIGHT AS BOE GOVERNOR CARNEY TESTIFIES ON INFLATION AND ECONOMIC OUTLOOK
EUR/USD
Forex News: Price dropped very early during yesterday’s trading session but support pushed it higher and all losses were nullified. The Euro was initially unfazed by Draghi’s testimony, who mentioned that economic expansion is solid but was less hawkish about inflation.
Technical Outlook
After dropping into the confluence zone created by the 50 period Exponential Moving Average and the horizontal support at 1.1735, the pair bounced strongly to the upside, moving above the session’s opening price. However, the last candles are showing bearish pressure and price dropped once again, so it’s unclear what the next move will be. For the short term we expect to see another encounter with the confluence zone mentioned earlier and the way price behaves there will offer more clues about future direction.
Fundamental Outlook
The Euro will have a light economic day, without any major data coming out and on the US Dollar side the only notable event is the release of the Existing Home Sales numbers, scheduled at 3:00 pm GMT. The indicator shows the annualized number of houses sold during the previous month, excluding new buildings. The expected number is 5.42 Million and higher values show a healthy economy, so the Dollar is positively affected.
GBP/USD
The Pound showed bullish momentum since early in yesterday’s trading session and this allowed the pair to climb for a perfect touch of 1.3280 resistance.
Technical Outlook
Current momentum favours the bulls but as long as 1.3280 resistance remains intact, the probability of a drop is high. The first lower barrier and form of support is represented by the 50 period Exponential Moving Average, followed by 1.3175. To the upside, a break of 1.3280 would open the door for the key level at 1.3320.
Fundamental Outlook
The Inflation Report Hearings take place today at 10:00 am GMT and during these meetings, Bank of England Governor Mark Carney will testify on inflation and economic outlook before the Parliament's Treasury Committee. Depending on Carney’s attitude and answers, the Pound is likely to show increased volatility, so caution is advised.
FOREX NEWS: US DOLLAR STRUGGLES, LOOKS FOR A VOLATILITY BOOST FROM FOMC MEETING MINUTES
EUR/USD
Forex News: Political turmoil in Germany, combined with modest US Dollar strength took the pair below support yesterday. However, price remained in a tight range for almost the entire session.
Technical Outlook
The pair’s gains seen Monday were totally erased and now the bears are trying to push price below the confluence zone created by 1.1735 and the 50 period Exponential Moving Average. If they succeed, the first target will become the support at 1.1700, followed by the zone around 1.1670; the oscillators are showing bearish momentum, favouring a move into the next support but a lot will depend on the US data released today.
Fundamental Outlook
The first U.S. data release will be the Durable Goods Orders, scheduled at 1:30 pm GMT. The indicator shows changes in the total value of orders for goods with a life expectancy of at least 3 years and is expected to post a reading of 0.4% (previous 2.0%). Higher than anticipated numbers show increased economic activity and usually strengthen the US Dollar.
Later in the day, at 7:00 pm GMT the FOMC will release the Minutes of their latest rate meeting. The document contains insights into the reasons that determined the latest rate decision but can also contain hints about future rate hikes and other monetary policy matters. If this is the case, the US Dollar will probably have a strong reaction, thus caution is recommended.
GBP/USD
The pair retreated yesterday without threatening 1.3280 resistance but found support around 1.3225 zone and bounced higher. Both currencies in the pair lack a clear direction, so we can expect to see more choppiness.
Technical Outlook
The pair is capped by the resistance at 1.3280 and the support at 1.3225, so until we see a clear breakout, we can expect reversals within the range. A break of support will take price into the 50 period EMA, while a break of resistance will open the door for a move into the key level at 1.3320. Both the US Dollar and the Pound will be affected today by important events, so there’s an increased chance of a breakout.
Fundamental Outlook
At 12:30 pm GMT, HM Treasury will release the Autumn Forecast Statement, which contains an economic outlook and offers information about the government’s budget for the upcoming year. The Statement is released once per year and can have a significant impact on the Pound.
FOREX NEWS: LONG-TERM RESISTANCE THREATENED. US DOLLAR STRUGGLES TO RECOVER WEEKLY LOSSES
EUR/USD
Forex News: The European Manufacturing and Services surveys released yesterday showed optimism among purchasing managers and this contributed to the pair’s climb into the key resistance at 1.1860, generating another bullish session.
Technical Outlook
The bulls are now facing an important resistance zone represented by 1.1860 and 1.1875. Also, the pair has travelled a long distance to the upside without a proper retracement and the Relative Strength Index is approaching overbought territory. These reasons make us anticipate a drop that will possibly find support at 1.1825. If the pair moves above 1.1875 without retracing first, expect the upside to be limited and a pullback to follow.
Fundamental Outlook
The German IFO Business Climate will be the day’s only notable release, scheduled at 9:00 am GMT. This is a survey with a very large sample size of about 7,000 businesses that asks respondents to give their 6-month outlook for the economy and to rate current business conditions. The expected reading is 116.6, almost unchanged from the previous 116.7 and usually a higher number strengthens the Euro but to a limited extent.
GBP/USD
The pair dropped close to 1.3280 support yesterday after the British GDP failed to surpass expectations. However the losses were quickly erased, mostly due to US Dollar weakness across the board.
Technical Outlook
The resistance at 1.3320 represents the top of the long term range and is a key level for long term movement, a fact which makes us believe that price will struggle to break it and that we will see a retracement lower from here. The first potential support is located at 1.3280, where we expect bullish action to resume.
Fundamental Outlook
The economic scene is light today for the Pound, without any important data releases. The technical aspect will decide the pair’s direction unless surprising events take place.
FOREX NEWS: BULLS DOMINATE THE MARKET BUT TECHNICAL INDICATORS ENTER DEEP OVERBOUGHT TERRITORY. PULLBACKS FORTHCOMING?
EUR/USD
Forex News: Friday the German IFO Business Climate posted an all-time high figure of 117.5, thus allowing the Euro to make significant advances against an already weak US Dollar and to finish the day almost 100 pips higher.
Technical Outlook
Momentum is clearly bullish and the pair broke a very important zone of resistance (1.1860 – 1.1875) but these types of moves are usually followed by a pullback or at least a period of sideways movement. The Relative Strength Index and Stochastic are deep in overbought territory, thus increasing the chances of a retracement lower.
Fundamental Outlook
The only notable release of the day is the U.S. New Home Sales, a report that shows how many houses were sold during the previous month. The expected number is 627K (annualized format) and a higher reading shows increased economic health, thus strengthening the greenback but the impact is medium.
GBP/USD
Price action was mostly bullish Friday and the pair broke the resistance at 1.3320, reaching a high at 1.3360 before retracing lower. The US Dollar continues to be on the retreat, with only minor signs of strength.
Technical Outlook
After an almost perfect bounce at 1.3280, which is now support, the pair exited the long term range by breaking the resistance at 1.3320. Price action during the next few days will show whether the break was true or not and until then, the levels to watch are 1.3360 (Friday’s high) as potential resistance and of course 1.3320, which may turn into support.
Fundamental Outlook
The United Kingdom didn’t schedule any economic releases for today, so the technical aspect and the U.S. home sales numbers will decide market direction.
