GDMFX - Daily News

[GDM_FX]

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


EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

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


EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

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


EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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


GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

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


EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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


GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

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

EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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



GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

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

EUR/USD

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

Technical Outlook

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

Fundamental Outlook

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



GBP/USD

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

Technical Outlook

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

Fundamental Outlook

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

 

[GDM_FX]

FOREX NEWS: U.S. JOBS IN THE SPOTLIGHT: ADP NON-FARM EMPLOYMENT CHANGE

EUR/USD

Forex News: Yesterday the pair tried again to break 1.1875 but bounced lower and reached the bottom of the channel. A worse than expected U.S. Services PMI then weakened the US Dollar, creating a brief climb.

Technical Outlook

Although the greenback was temporarily weakened by a disappointing PMI, the pair is still trying to break support and to move out of the horizontal channel created by 1.1825 and 1.1875. Given that price bounced several times at 1.1875 and is now showing some bearish momentum, we expect to see a break of 1.1825 followed by a stronger move south.

Fundamental Outlook

Today at 1:15 pm GMT we take a first look at U.S. jobs with the release of the ADP Non-Farm Employment Change. This report shows changes in the total number of employed people in the U.S. excluding the farming sector and Government but has a lower impact than the Non-Farm Payrolls released Friday. However, numbers above the forecast 191K usually strengthen the US Dollar.



GBP/USD

The Sterling was weakened yesterday by a worse than expected reading for the Services PMI but later in the afternoon the U.S. Services PMI disappointed as well, so the US Dollar gave back most of the early gains, creating a choppy session.

Technical Outlook

The failed break of the confluence zone created by 1.3410 support and the 50 period EMA shows that the bulls are trying to regain control of the pair and this makes us anticipate a touch of 1.3450 or even a small climb above it. However, the pair is showing bearish pressure because it failed to break 1.3550 or to even reach it a second time and this suggests that a full candle close below the 50 EMA will mark the beginning of a longer period of downside movement.

Fundamental Outlook

The Pound will not be affected by major economic releases today, so the technical aspect and the U.S. jobs data will be the main price drivers.

 

[GDM_FX]

FOREX NEWS: BEARS BREAK SUPPORT. THE US DOLLAR STARTS TO REGAIN ITS MOMENTUM

EUR/USD

Forex News: The ADP Non-Farm Employment report came very close to the anticipated value, so the release did not have a major impact. However, the US Dollar continued to drag the pair lower, generating a bearish session with only brief moments of upside movement.

Technical Outlook

Yesterday the pair broke 1.1825 decisively and is now finally out of the horizontal channel that confined it (1.1875 – 1.1825). This means that the bears are in control of short term price action and possibly that we will see a move closer to 1.1735. Until price gets there, we will surely see retracements to the upside but as long as price is trading below 1.1825, our view is bearish.


Fundamental Outlook

Today is a slow day for both currencies and the only notable event will be a press conference held by ECB President Mario Draghi. The conference will be presented by the Bank for International Settlements and held at the European Central Bank, in Frankfurt. The impact is hard to anticipate but caution is recommended.



GBP/USD

Bearish action continued yesterday and the pair reached the next support. Most of this behavior was due to Pound weakness generated by Brexit concerns.

Technical Outlook

The break of the confluence zone created by 1.3410 and the 50 period Exponential Moving Average can be considered a big victory for the bears, and we expect to see an extended move lower, towards 1.3320. The current level (1.3360) is a minor support but it rejected price higher yesterday, so we may see a push into 1.3410 and the 50 EMA but we don’t expect that resistance zone to be broken.


Fundamental Outlook

The Pound has a slow economic day ahead, as the United Kingdom didn’t schedule any major data releases.

 

[GDM_FX]

FOREX NEWS: BUCKLE UP FOR THE FINAL NFP REPORT OF THE YEAR

EUR/USD

Forex News: The pair continued on a downward path yesterday but price action was mostly choppy due to the lack of economic releases. The speech of ECB President Draghi did not have a strong impact on the single currency.

Technical Outlook

Bearish momentum is starting to fade as we see more and more candles with long wicks and also, the pair hasn’t made any significant advances yesterday. This suggests that a move up will soon follow but as long as the pair is trading below 1.1825 and below the 50 period Exponential Moving Average, the bias is negative. Today the US jobs data will have a strong impact on the pair’s direction, so the technical aspect will be secondary.

Fundamental Outlook

There’s nothing important on the calendar for the Euro but the US Dollar will be heavily affected by the most important US jobs report: the Non-Farm Employment Change (aka Non-Farm Payrolls). The report shows changes in the total number of employed people, excluding the farming sector and is a leading indicator of consumer spending. The time of release is 1:30 pm GMT, the expected reading is 198K (previous 261K) and higher numbers are beneficial for the US Dollar.



GBP/USD

The pair dropped into the support at 1.3320 early in yesterday’s trading session but the Pound recovered the losses after an EU official mentioned that progress has been made on Brexit negotiations.

Technical Outlook

The pair’s movement remains very dependent on any Brexit news that come out without warning but from a technical perspective, as long as price is not clearly above the 50 period Exponential Moving Average, the bias remains mostly bearish. Of course the US Dollar will be affected today by major employment data, so the technical side will be overshadowed by the release.

Fundamental Outlook

The British Manufacturing Production is today’s only notable indicator for the Pound. The report shows changes in the total value of goods produced by manufacturers and usually has a medium impact on the currency, with higher numbers strengthening it. The time of release is 9:30 am GMT and the expected change is 0.1%.

 

[GDM_FX]

FOREX NEWS: BUCKLE UP FOR THE FINAL NFP REPORT OF THE YEAR

EUR/USD

Forex News: The pair continued on a downward path yesterday but price action was mostly choppy due to the lack of economic releases. The speech of ECB President Draghi did not have a strong impact on the single currency.

Technical Outlook

Bearish momentum is starting to fade as we see more and more candles with long wicks and also, the pair hasn’t made any significant advances yesterday. This suggests that a move up will soon follow but as long as the pair is trading below 1.1825 and below the 50 period Exponential Moving Average, the bias is negative. Today the US jobs data will have a strong impact on the pair’s direction, so the technical aspect will be secondary.

Fundamental Outlook

There’s nothing important on the calendar for the Euro but the US Dollar will be heavily affected by the most important US jobs report: the Non-Farm Employment Change (aka Non-Farm Payrolls). The report shows changes in the total number of employed people, excluding the farming sector and is a leading indicator of consumer spending. The time of release is 1:30 pm GMT, the expected reading is 198K (previous 261K) and higher numbers are beneficial for the US Dollar.



GBP/USD

The pair dropped into the support at 1.3320 early in yesterday’s trading session but the Pound recovered the losses after an EU official mentioned that progress has been made on Brexit negotiations.

Technical Outlook

The pair’s movement remains very dependent on any Brexit news that come out without warning but from a technical perspective, as long as price is not clearly above the 50 period Exponential Moving Average, the bias remains mostly bearish. Of course the US Dollar will be affected today by major employment data, so the technical side will be overshadowed by the release.

Fundamental Outlook

The British Manufacturing Production is today’s only notable indicator for the Pound. The report shows changes in the total value of goods produced by manufacturers and usually has a medium impact on the currency, with higher numbers strengthening it. The time of release is 9:30 am GMT and the expected change is 0.1%.