Forex News: The final day of the week that just ended was heavily influenced by the US Non Farm Employment report which exceeded expectations and strengthened the greenback as a result. Overall, the day was characterized by a sharp reversal which made trend following strategies almost impossible to trade successfully.
Technical Outlook
Friday’s move lower is considered a retracement in an uptrend, with the main bias being bullish. An important resistance was broken last week, a fact which solidifies the control of the bulls but signs of weakness are present in the market: the Relative Strength Index is already moving down from overbought territory and the latest daily candle is a pin (which indicates rejection). Moves below 1.3830 may be indicative of increased bearish pressure and a break of Friday’s high located at 1.3914 would indicate trend continuation.
Fundamental Outlook
The Euro Group meetings take place today in Brussels and are a potential market mover, considering the fact that important officials will be present (ECB President, Euro Group President and finance ministers from the member states). Although the meetings are closed to the press, participants often talk to journalists, possibly creating volatility, depending on the matters discussed.
GBP/USD
Friday the pair continued its choppy price action, moving above and below the level of 1.6750 before dropping on the back of good US employment data which reinforced the US Dollar.
Technical Outlook
The recent move south is backed by fundamental events and the strength of the Pound seems to fade away as we saw the bulls make several failed attempts to break resistance. Our bias remains neutral in anticipation of a clear breakout but there are increased chances of an encounter with the first minor support level located at 1.6650.
Fundamental Outlook
Other than the Euro Group meetings, there are no notable events scheduled today and we anticipate slow trading if no major developments take place in Brussels.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Mark Carney’s testimony steals the headlines
EUR/USD
Forex News: The week started with ranging price action and the pair lacked clear direction. No major economic indicators were released, contributing to the ranging price action and slow movement.
Technical Outlook
As mentioned, yesterday price was confined in a narrow range but this fact makes us believe that today we will see stronger moves. The pair is in an uptrend but the fact that buyers failed to take price higher may suggest that lower moves will follow; if this is the case, 1.3830 is the next potential support and target of the day. Keep in mind that bulls are still in control of the pair and only a break of support would mean that bears are really starting to shift the power in their favor.
Fundamental Outlook
Both the Euro and the US Dollar have a slow day ahead in terms of economic indicator releases and we consider the technical aspect to be the main market mover.
GBP/USD
The sellers managed to seize control of the pair yesterday and took price below the support located at 1.6650. Overall we had a day without sharp reversals and a steady trend was in place on the lower time frames.
Technical Outlook
As mentioned before, the pair broke 1.6650 support and is now trading below it. Short term control belongs to the bears but the break is not a clear one and we still consider the picture to be unclear until a break of 1.6600 occurs. Although moves above 1.6650 are possible, we slightly favor the short side but we acknowledge the fact that today’s important fundamental events may overshadow the technical aspect.
Fundamental Outlook
The most important event of the day is Mark Carney’s testimony before the Parliament’s Treasury Committee with the main focus being the economic outlook and the inflation situation. During the few hours of the hearings, strong and even irregular movement may be experienced, depending on the matters discussed. The hearings start at 09:30 am GMT and at the same time the UK Manufacturing Production is announced, with an anticipated increase from 1.5% to 3.3%. Better than anticipated values for this indicator are usually beneficial for the Pound and have the potential to take the pair higher.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Markets governed by indecision. Strong moves still expected
EUR/USD
Forex News: The pair had a rather slow day, characterized by a sharp reversal after a touch of 1.3830 support zone. The fundamental scene was quiet, a fact which contributed to the pair’s lack of strong movement and narrow range.
Technical Outlook
An important level was barely touched yesterday but price showed an almost immediate reaction, bouncing higher for about 40 pips. This is without a doubt a bullish sign but lately the pair seems to lack momentum and the buyers’ strength is slowly fading away. On the other hand, even if our anticipated target of 1.3830 was almost reached, we didn’t see clear bearish pressure. All this goes to show that the market is governed by indecision and the next strong move will probably determine the short term bias. Support still sits at 1.3830 while the highest price reached this year (1.3914) will probably act as resistance.
Fundamental Outlook
At 10:00 am GMT the Euro Zone Industrial Production is announced, with an anticipated increase from the previous 0.5% to 1.9%. Such a change would be beneficial for the Euro and we might see higher prices as this is a leading indicator of economic health. The US has a slow day ahead and no major indicators are released.
GBP/USD
Although we expected Mark Carney’s testimony to have a higher impact on the market, the pair moved between support and resistance for the entire day and no major developments took place.
Technical Outlook
For a long time the pair has been trading between the support located at 1.6600 and the resistance located at 1.6750; a clear break of either level would most likely determine the pair’s next medium term direction so we can say that we are a crossroad now: if 1.6600 will be broken today, we are likely to see and extended move lower but a bounce higher off this level would indicate that the ranging period is not over yet.
Fundamental Outlook
The day ahead lacks major economic releases and this makes the technical aspect the most influential factor of the day.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: US Retail Sales – the incentive for a break of Support or Resistance
EUR/USD
Forex News: The pair had a bullish trading session yesterday, with price moving in one direction for almost the entire day. The better than expected value of the Euro Zone Industrial Production greatly contributed to this upward movement by strengthening the Euro.
Technical Outlook
The pair made an attempt to break this year’s high located at 1.3914 and price is now in close vicinity of this level but there are no clear hints of a breakout or of a bounce lower. The Relative Strength Index on a four hour chart is very close to the 70 level, a fact which indicates an overbought condition of the market and price is printing a double top pattern which usually indicates that lower moves are anticipated. The main levels to watch are 1.3914 as resistance and 1.3830 as support.
Fundamental Outlook
The main event of the day is the release of the US Retail Sales scheduled at 12:30 pm GMT. Retail sales represent a hefty part of the entire US consumer spending and are considered a market mover which can drastically affect the pair’s behavior. For today’s release an increase is anticipated from the previous value of -0.4% to 0.2% and usually better than expected numbers are beneficial for the US Dollar.
GBP/USD
For a long time we expected a break of either support or resistance and yesterday the pair moved briefly below 1.6600. However the break could not be sustained by the bears and price moved quickly to the upside.
Technical Outlook
The fact that yesterday price tried to break the important support located at 1.6600 but failed and quickly returned above it indicates that bears are not ready yet to take control of the pair. To the upside, the first level of interest remains 1.6650 while 1.6600 is still support which could generate a bounce higher if it’s not broken today. We remain neutral until a clear break occurs.
Fundamental Outlook
The Pound has a calm day ahead in terms of economic indicator releases so we consider the US event to be the main market mover of the day.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex New: The pair had a wild day yesterday, characterized by Euro Zone optimism which took price higher but was soon followed by a sharp reversal triggered partly by a better than expected value of the US Retail Sales.
Technical Outlook
Yesterday price printed a new high at 1.3965 but the Dollar strengthened after the US data came out and 1.3914 (previous high) was broken to the down side. The latest fall opens the door for a break of 1.3830 support, a fact which would represent a major victory for the bears. Note that the drop didn’t occur immediately after the release of the US Retail Sales so technical reasons, not only fundamental were responsible for it, a fact which makes us believe that high prices were hard to sustain, the bullish trend was overextended and the market was in need of a strong move to the south which may turn into a full scale reversal.
Fundamental Outlook
At 07:00 am GMT the German Final Consumer Price Index is released and anticipated to remain unchanged at 1.2%. The indicator is Germany’s main inflation gauge but it is usually overshadowed by the Preliminary version which is released about 15 days earlier; however, higher values have the potential to strengthen the Euro and take the pair higher. Later in the day, at 1:55 pm GMT, the US Consumer Confidence is released and expected to increase from the previous 81.2 to 81.9; higher levels of consumer confidence are indicative of future increases in consumer spending which is vital for the economy so US Dollar strength is anticipated if higher values will be posted.
GBP/USD
The first part of yesterday’s trading session was controlled by the bulls on the back of speculation that Bank of England will raise the Interest Rate sooner than estimated but the day finished with a stronger US Dollar and a bearish move which nullified the Pound’s previous gains.
Technical Outlook
The recent encounter with the support located at 1.6600 resulted in a bounce higher which broke 1.6650 decisively to the upside; however, the rally was sharply reversed and price moved lower, in close vicinity to 1.6600. All this goes to show that indecision still rules the pair but the bears can make a decisive move today if they manage to break 1.6600 support and finish the week below it. We slightly favor this scenario and anticipate a break of 1.6600 but we acknowledge the fact that bulls still have underlying strength and may take the pair north.
Fundamental Outlook
The United Kingdom releases the Trade Balance today at 09:30 am GMT; the indicator shows the difference between imported and exported goods and higher readings are beneficial for the Pound. Today’s expected value is -8.7B while the previous was -7.7B but the indicator is not considered a market mover and the impact is usually mild. The US Confidence indicator will have a direct impact on the pair’s movement as well.
We hope you had a profitable trading week and we wish you a relaxing weekend.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Monday’s trading session was characterized by an irregular market and although the Euro Zone Consumer Price Index posted a lower than anticipated value, the pair moved higher. Following a weekend referendum, Crimea decided to join Russia, a fact which escalated tensions between the West and the East, creating a difficult trading environment.
Technical Outlook
Technical Indicators such as the Relative Strength Index don’t offer a lot of clues regarding the pair’s next move and lately the pair has been ranging and reversing a lot. Rumors and speculation drive price rather than technical reasons and that’s why extra caution is needed in periods like these. The main levels of importance remain 1.3965 as resistance and 1.3830 as major support but our bias for the pair is neutral.
Fundamental Outlook
The German ZEW Economic Sentiment is released today at 10:00 am GMT with an anticipated decrease from 55.7 to 52.8. Such a decrease would be detrimental for the Euro as the indicator is based on the opinions of about 275 German analysts and investors who are highly informed about the political situation of the country due to the nature of their jobs. At 12:30 pm GMT the US will announce the Consumer Price Index which acts as the main inflation gauge and has the ability to influence strongly the pair’s movement. For today’s release a decrease is expected, from the previous 1.6% to 1.2% but usually higher values are beneficial for the greenback.
GBP/USD
Although the American Industrial Production indicator posted better numbers, the bulls couldn’t make a decisive move and yesterday’s price action was characterized by a bounce off 1.6600 which failed to be continued to the upside and encountered resistance at 1.6650.
Technical Outlook
For yet another day the pair struggled to move outside the small range created between 1.6650 and 1.6600 but failed to do so. Usually after extended periods of relative inactivity, price tends to move strongly so the next clear breakout will most likely be a real one. We still favor slightly the short side so if 1.6600 will be broken, we believe the move will be continued lower.
Fundamental Outlook
The United Kingdom didn’t schedule any major economic indicator releases but BoE Governor Mark Carney will speak today in London at 5:45 pm GMT. Although this is not a high-profile speech, volatility may be experienced at the time. The US events and tensions in Crimea will affect the pair’s movement as well.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Slow movement ahead of Manufacturing data
EUR/USD
Forex News: Friday we had a slow trading session, with price retracing higher as anticipated but the lack of major economic data releases translated into a movement of less than 50 pips for the entire day. Overall, it was a calm end to a very busy week.
Technical Outlook
From a Daily chart perspective, the market is in a clear uptrend, however on the lower time frames, a down trend is starting to form. For today’s trading session we anticipate moves lower and a potential break of the support zone created around 1.3760, a fact which would open the door for a touch of 1.3710 major support. To the up side, the first major resistance sits at 1.3830 but we don’t expect a bullish break of this level unless surprising numbers are posted for today’s economic indicators.
Fundamental Outlook
At 8:30 am GMT Germany will announce their Manufacturing PMI which is a survey derived from the opinions of purchasing managers from the Manufacturing sector. The anticipated figure is 54.7, a slight decrease from the previous 54.8 and under normal circumstances, better than anticipated values are beneficial for the Euro. The US Manufacturing PMI will be released today at 1:45 pm GMT with an anticipated value of 56.6, a decrease from the previous 57.1. Similar to the German PMI, better numbers can strengthen the currency and take the pair lower.
GBP/USD
The pair moved mostly sideways during Friday’s trading session, a fact which was mainly due to the lackluster fundamental scene and lack of economic indicator releases.
Technical Outlook
Price traded for the entire Friday session very close to the support created at 1.6480, in a very small range, a fact which doesn’t offer a lot of hints about today’s potential direction. However, lately the bears have been in control of the pair and the chart doesn’t show strong signs of bullish moves so we anticipate a break of 1.6480 minor support if the US Manufacturing PMI doesn’t post a surprising number.
Fundamental Outlook
The Pound has a slow day in terms of economic indicator releases and the focus will be on the US data and on the technical aspect of the market.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Technical factors overshadowed by political turmoil
EUR/USD
Forex News: Yesterday an emergency G7 meeting was held in The Hague to discuss potential sanctions against Russia for the takeover of Crimea and this triggered a strong move up which took the pair above 1.3830.
Technical Outlook
Before the G7 meeting, the pair moved lower on the back or worse than expected German data but now the picture is unclear once again. The rise was not generated entirely by technical reasons so the break of 1.3830 can be a false one and price is likely to move below this level once again if things calm down on the political scene. The support located at 1.3760 was touched for a second time today without being broken so now its importance has increased and a potential break will weigh more for short term price action; however, if the bulls can maintain price above 1.3830 the bearish momentum will start to fade away.
Fundamental Outlook
Two important indicators are released today: the first is the German Ifo Business Climate which is a leading indicator of economic health based on the opinions of about 7,000 businesses and has the potential to take the pair higher if better values are posted. The release is scheduled at 9:00 am GMT and the expected value is 110.9, a slight decrease from last month’s 111.3. The second indicator is the US Consumer Confidence which comes out at 2:00 pm GMT with an estimated increase to 78.7 from the previous 78.1. If consumers are optimistic about economic conditions, they are likely to spend more and consumer spending is of crucial importance to the US economy so higher numbers are beneficial for the US Dollar and can take the pair lower.
GBP/USD
Price moved mostly sideways before the G7 meeting but a fast rise ended this calm behavior. The US data didn’t have a notable impact on the pair and the highlight of the day was the whipsaw seen during the G7 meeting.
Technical Outlook
The technical aspect of the market is overshadowed at the moment by the political developments but it is important to acknowledge the fact that bulls couldn’t sustain the high price generated by the G7 meeting. This shows us that bears still have underlying strength and that lower prices are a distinct possibility. The first support is located at 1.6480 while resistance sits at 1.6600 but our technical bias is neutral considering the current political situation.
Fundamental Outlook
The United Kingdom announces today at 9:30 am GMT the Consumer Price Index which is the prime inflation gauge and is closely watched by the Bank of England when the Interest Rate decision is made. A higher inflation can determine the BoE to raise the interest rate and this is the reason why higher than expected values for today’s release can strengthen the Pound and take the pair higher. The anticipated value is 1.7%, a decrease from the current 1.9%. The pair will be directly affected by the US releases and by political events.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: US data may bring an end to market indecision
EUR/USD
Forex News: Yesterday’s trading session was choppy and characterized by a lot of back and forth movement. Germany’s Business Climate came out with a value which was very close to the expected one but the US Consumer Confidence posted a better reading, strengthening the US Dollar.
Technical Outlook
The US Dollar strength generated by the Consumer Confidence release took the pair down into the support located at 1.3760 but price bounced higher from there and the pair experienced another encounter with 1.3830 resistance. This up and down movement doesn’t offer many clues about future direction but is likely to come to an end today and 1.3830 or 1.3760 will probably be broken. The direction of the break however, is harder to predict, considering yesterday’s wild movement. We slightly favor the short side but a lot will depend on the outcome of the US data release.
Fundamental Outlook
Today at 12:30 pm GMT the US Durable Goods Orders are announced and expected to increase substantially from the previous -1.0% to 1.1%. Such an increase would most likely strengthen the US Dollar because more orders for durable goods suggest that producers will intensify their activity to fill those orders. Also, because durable goods are more expensive than normal ones, a rise in demand for such goods indicates consumer confidence regarding the current and future economic conditions.
GBP/USD
United Kingdom’s Consumer Price Index was released yesterday with the anticipated value of 1.7% and the market did not react strongly, mainly because the value didn’t come as a surprise. Overall we had a bullish day but trading on the lower time frames was rather difficult.
Technical Outlook
Although the last couple of days have been characterized by market indecision and choppy price action, we anticipate a move below the support located at 1.6480. This bearish bias is mostly based on the fact that medium term control still belongs to the bears and we consider the latest rise just a normal retracement after price moved strongly in one direction. To the north, the first resistance is located at 1.6600 and a move above it would make us reassess our bearish stance.
Fundamental Outlook
The United Kingdom didn’t schedule any major economic indicator releases for today so price action will be mostly driven by the US economic indicator and by the technical aspect.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: Price confined between support and resistance. A breakout is imminent
EUR/USD
Forex News: Yesterday’s release of the US Durable Goods Orders didn’t do much to affect the pair although the indicator posted much better than anticipated numbers. However, the US Dollar strengthened throughout the day but price action was characterized by some sharp turns on the lower time frames.
Technical Outlook
After price tried a second time to break the resistance located at 1.3830 but failed, the bears seem to be taking back control of the pair. If this is the case, we will probably see a break of the support located at 1.3760 and a continued move lower, towards 1.3710. For the moment, 1.3830 is still strong resistance but a break would be indicative of a shift of bias and a potential resumption of the long term uptrend.
Fundamental Outlook
At 12:30 pm GMT the US Unemployment Claims are released, with an anticipated increase from last week’s 320K to 326K, a fact which would probably weaken the US Dollar because a higher number of unemployed people, suggests that consumer spending may decrease in the near future. The US Pending Home Sales are announced at 2:00 pm GMT with no change anticipated from the current 0.1%; better than anticipated numbers usually strengthen the greenback as home purchases are usually made during times of economic expansion.
GBP/USD
The pair moved on a bullish path for the entire day and price came close to 1.6600 resistance. The bullish sentiment was triggered by speculation that Bank of England may raise the interest rate if the economy continues to recover.
Technical Outlook
An encounter with 1.6600 resistance seems almost imminent but if it occurs we expect a bounce lower. Since the beginning of the month the pair has been moving in a bearish manner and the Relative Strength Index on a four hour chart is close to overbought territory so moves lower after a touch of resistance have a higher probability. A break to the up side of 1.6600 would make 1.6650 the next target.
Fundamental Outlook
The most important event of the day for the pair will be the release of the UK Retail Sales which is scheduled at 9:30 am GMT. Analysts’ forecast a rise from the previous -1.5% to 0.5%, a fact which would strengthen the Pound because retail sales represent the majority of consumer spending. US unemployment and house-market data will have a direct impact on the pair.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
