Forex News: The beginning of the year belongs to the bears
EUR/USD
Forex News: During the first trading day of the year, price moved strongly to the down side and although US economic data was not better than anticipated, the support located at 1.3710 was broken.
Technical Outlook
The level of 1.3710 was broken in a pretty decisive manner but the drop was stopped by the next support located at 1.3650. A break of this barrier will open the door for a touch of the next important support located at 1.3550, but first we anticipate a move up to re-test the broken 1.3710 and possibly turn it into resistance once again. If this scenario unfolds, the bears will probably control short to medium term price action and the pair will travel lower, towards 1.3550.
Fundamental Outlook
Today no major economic releases are scheduled by either the United States or Europe and we expect a day mostly driven by the technical aspect.
GBP/USD
United Kingdom’s Manufacturing Purchasing Managers’ Index came out with a lower value than initially anticipated and this weakened the Pound, allowing the pair to move sharply to the down side for almost the entire day.
Technical Outlook
The latest momentum is clearly bearish but the level of 1.6440 stopped yesterday’s strong move, showing that higher prices are not out of the question. If this barrier is broken to the down side, price is likely to visit the next support, located at 1.6315. However, the pair traveled quite a big distance yesterday so a retracement higher is very possible, although we don’t expect a move up (if any) to reach 1.6550 again.
Fundamental Outlook
The United Kingdom will release today at 09:30 am GMT the Construction Purchasing Managers’ Index which is expected to slightly decrease from the previous 62.6 to 62.3. This is a leading indicator of economic health focused on the Construction sector and usually better than anticipated values strengthen the Pound, driving the pair higher.
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 4-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
Forex News: A busy Monday with potentially dynamic price action
EUR/USD
Forex News: Friday the pair continued the move lower started Thursday and the support located at 1.3650 was broken decisively without a retracement higher. The move was mostly triggered by technical factors as no high-impact economic indicators came out.
Technical Outlook
The latest momentum definitely belongs to the bears but price traveled quite a long distance without a significant retracement higher and the Relative Strength Index is showing an oversold condition. This makes us believe that a move up is needed before price can advance lower. A good place for a bullish move to reverse is located at 1.3650, the recently broken level. The first lower barrier is represented by 1.3550.
Fundamental Outlook
At 1:00 pm GMT the German Consumer Price Index is released and expected to increase from the previous 1.3% to 1.4%. This indicator measures inflation and higher than anticipated values usually strengthen the Euro. At 3:00 pm GMT the US Non Manufacturing PMI (Purchasing Managers’ Index) is released; the expected figure is 54.6, a slight increase from the previous 53.9. Being a leading indicator of economic health, better than anticipated figures could strengthen the greenback.
The last event of the day is US Senate’s vote regarding the nomination of Janet Yellen as Federal Reserve Chairperson but the late hour (10:30 pm GMT) of the vote may generate less movement than anticipated as usually volatility subsides at that time.
GBP/USD
Friday’s UK data came out with a close to anticipated value, a fact which did not generate strong moves but the pair traveled south nonetheless. However, moves to the upside also occurred and the trading session had a rather mixed direction.
Technical Outlook
Although the support located at 1.6440 was broken Friday, a move above it is not out of the question, especially because the break wasn’t a decisive one. The first major victory of the bears would be a break of 1.6250 support but we don’t expect such a move to occur today although we favor the short side of the market and a move towards 1.6315.
Fundamental Outlook
Early at 09:30 am GMT the United Kingdom will release the Services PMI, a survey based on the opinions of purchasing managers from the services sector who are asked to rate the current business conditions. Today’s expected value of the indicator is 60.4, a slight increase from the previous 60.0 and better than anticipated numbers are beneficial for the Pound. Of course, the US events mentioned earlier 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.
EUR/USD
Forex News: Yesterday we saw the US Dollar weaken against the Euro on the back of a worse than anticipated value of the US Non Manufacturing PMI which indicated a slower pace of economic growth and was perceived as bearish for the greenback.
Technical Outlook
The expected bullish retracement occurred yesterday and the pair traveled north for another encounter with 1.3650 resistance. We anticipate moves to the down side if this level holds but a break would make 1.3710 the next target for the pair and also the next place where price is likely to reverse and start moving south again.
Fundamental Outlook
Early at 08:55 am GMT the German Unemployment Change is released, offering insights into the job-market situation of Europe’s most influential economy. The expected figure is -1K compared to the previous 10K and usually smaller than expected numbers are beneficial for the Euro as they suggest that jobs are easily available and the economy is thriving.
GBP/USD
Although yesterday’s trading session started on a bearish note, the US data which came out during the day weakened the greenback and allowed the pair to climb towards 1.6440.
Technical Outlook
Since the beginning of the year, the pair has been moving to the down side and we consider this behavior to continue today as well. Very important for short term direction is the way price reacts near the current level of 1.6440; we anticipate a bounce lower and a move towards 1.6315 but a break to the upside is not out of the question and would indicate that bulls are not ready yet to give up their control.
Fundamental Outlook
The United Kingdom doesn’t release today any important economic indicators but the US will announce their Trade Balance at 1:30 pm GMT and this has the potential to be a high-impact indicator for both our pairs. The expected figure is -40.2B while the previous is -40.6B and usually higher than anticipated numbers are beneficial for the US economy as they indicate a smaller deficit.
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: Resistance holds. Bearish movement might resume
EUR/USD
Forex News: German unemployment dropped during the previous month as showed by the report which came out yesterday but the US Trade Balance data was also better than anticipated and this created mixed price action as both currencies strengthened.
Technical Outlook
When both currencies in a pair strengthen on the back of better than anticipated economic data, we can expect a lot of sharp reversals, without significant advances. This was the case yesterday and what appeared to be a bearish move was reversed and the pair finished the day close to where it started it. However, the resistance located at 1.3650 is still holding so we maintain our bearish bias, anticipating a move towards the support located at 1.3550.
Fundamental Outlook
The Euro Zone Retail Sales are released at 10:00 am GMT with an anticipated increase from the previous -0.2% to 0.2%, a fact which would strengthen the euro if it were to come true, but the main event of the day will be the release of the FOMC Meeting Minutes. These will come out later in the day, at 7:00 pm GMT and will contain important insights into the reasons that stood behind the latest Federal Funds Rate vote.
GBP/USD
Yesterday’s price action was rather mixed and no significant developments took place. The resistance located at 1.6440 was touched but not threatened.
Technical Outlook
We maintain our bearish stance as long as price remains below 1.6440 although the pair didn’t bounce lower as anticipated. Yesterday’s trading session was ranging and price didn’t travel a substantial distance so we believe today we will have a more active day, with a potential touch of 1.6315 support. A clear break above 1.6440 would invalidate this scenario for the moment.
Fundamental Outlook
The United Kingdom doesn’t release any major economic or financial indicators today so price action will be mostly influenced by the technical aspect and by the US 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: All eyes on the Interest Rates – an important day ahead
EUR/USD
Forex News: Yesterday’s trading session was mostly bearish ahead of the FOMC Meeting Minutes and once they were released, price action became choppy, with a lot of mixed, up and down movement on the lower time frames.
Technical Outlook
The support located at 1.3550 was touched yesterday as anticipated and the bears solidified their short-term control. A break of the current level of support would be a very important victory for the sellers and will most likely affect the pair’s medium-term direction. Our bias remains bearish but bounces higher are very possible, depending on the outcome of the day’s fundamental events.
Fundamental Outlook
The most anticipated event of the day is the ECB Press Conference which is scheduled at 1:30 pm GMT. The ECB announces the Interest Rate decision 45 minutes earlier, but no change is anticipated from the current 0.25% and we believe the Press Conference will be the day’s market moving event. President Mario Draghi will speak at the Conference and will answer journalists’ questions, most likely generating strong moves, depending on his attitude and matters discussed.
GBP/USD
Before the FOMC Minutes, the pair broke the resistance located at 1.6440 with a strong candle but the move was reversed and currently the pair is trading very close to the mentioned level.
Technical Outlook
The next direction is hard to anticipate but the break of 1.6440 resistance doesn’t seem to be one that will generate additional movement to the up side. It is very possible for the pair to move in a ranging fashion until the UK Interest Rate will be released and a direction will be probably established afterwards.
Fundamental Outlook
Bank of England will announce their Interest Rate decision at 12:00 pm GMT, together with the Asset Purchase Facility value. No change is anticipated for either the Interest Rate (0.50%) or the Asset Purchase Facility (375B) but usually an increase of the rate or a decrease of the purchase facility value are considered beneficial for the Pound. Overall, we anticipate a high volatility trading session, especially at the time of the events mentioned.
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: Choppy price action ahead of the Non Farm Employment report
EUR/USD
Forex News: The Euro zone interest rate remained unchanged at 0.25% as analysts predicted but ECB President Mario Draghi talked about maintaining low rates in the future as well and this weakened the Euro, allowing the pair to touch support once again.
Technical Outlook
The support located at 1.3550 couldn’t be broken and the sharp drop caused by Draghi’s comments was soon reversed. Despite the latest move up, we believe the pair will break support today or during the days to come. The medium term control still belongs to the bears and the effects of Mario Draghi’s comments are likely to be greater than we have seen so far. To the upside, 1.3650 remains strong resistance.
Fundamental Outlook
The main event of the day is the release of the US Non Farm Employment Change scheduled at 1:30 pm GMT. This is crucial data concerning the employment situation in the United States and it always has a tremendous impact on the market. The expected figure is 194K, a decrease from the previous 203K and usually higher than anticipated numbers strengthen the US Dollar, driving the pair lower.
GBP/USD
Both the UK Interest Rate and the Asset Purchase Facility remained unchanged and the expected volatility wasn’t present, except some erratic action at the time of the release.
Technical Outlook
The pair remained above the level of 1.6440 but no significant advances were made by either bulls or bears. We still don’t consider the break of 1.6440 to be one that can generate additional moves to the upside and our view on the pair is neutral at the moment. Direction will be decided by the outcome of the US Non Farm Employment data which is likely to influence medium term movement.
Fundamental Outlook
The United Kingdom announces at 09:30 am GMT the Manufacturing Production numbers, with no change expected from the current 0.4%. A higher than expected value suggests increased economic activity and a potentially stronger Pound. Of course, the US employment data remains the day’s headline and will have a high impact on the pair.
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: RANGING PRICE ACTION BETWEEN SUPPORT AND RESISTANCE
EUR/USD
Forex News: Friday’s headline was the much worse than expected number for the US Non Farm Payrolls, which triggered a massive move up based on US Dollar weakness. Resistance was broken and the bulls control short term momentum.
Technical Outlook
The strong move up brought the Relative Strength Index in the overbought territory and price started to move sideways, showing exhaustion. We anticipate a move lower and a touch of the recently broken level of 1.3650. If this potential touch will trigger a bounce higher, 1.3650 will become support and the pair will head towards 1.3710. There is also a distinct possibility for the pair to continue to move sideways most of the day, especially because no major economic indicators are released today.
Fundamental Outlook
The only notable event of the day comes out at 7:00 pm GMT in the form of the US Budget Balance. The expected figure is 44.0B, a big increase from the previous -135.2B; better than expected numbers have the potential to strengthen the US Dollar, taking the pair lower.
GBP/USD
Worse than anticipated UK Manufacturing Production numbers triggered an initial move lower but the unexpected value of the US Employment Change generated US Dollar weakness and took the pair well above the resistance located at 1.6440.
Technical Outlook
We expect a quiet and ranging day, mostly because no major economic indicators are released and usually Mondays are slow in terms of price movement. Although the latest momentum belongs to the bulls, a significant high has not been made and 1.6550 resistance wasn’t threatened so moves to the downside are not out of the question. The levels to watch today are 1.6440 and 1.6550.
Fundamental Outlook
As mentioned before, today the United Kingdom didn’t schedule the release of significant economic or financial indicators so price action will be mostly influenced 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.
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Forex News: US Retail Sales – a potential market-mover
EUR/USD
Forex News: The pair had a pretty slow trading session, with price confined in a 50 pip range for almost the entire day. Although the day had a bearish bias, no substantial developments took place.
Technical Outlook
The level of 1.3650 was tested from above and appeared to be broken but price soon returned above it. At the moment the picture is not clear and we must wait to see if this touch generates a bounce higher or if the level will be broken. If the bulls take price higher, the first barrier in front of rising prices is located at 1.3685, a minor resistance created by yesterday’s price action.
Fundamental Outlook
The most anticipated event of the day is the release of the US Retail Sales numbers scheduled at 1:30 pm GMT. The indicator shows the change in the total value of sales made at a retail level and is a very accurate gauge of economic activity. Better values than the expected 0.2% (previous 0.7%) have the potential to strengthen the US Dollar and drive the pair lower.
GBP/USD
The Pound weakened substantially against the US Dollar during yesterday’s trading session and the pair decisively broke support, traveling about 160 pips lower.
Technical Outlook
Yesterday’s drop nullified the gains made Friday by the pair on the back of a worse than expected value of the US Non Farm Employment report and short term control now belongs to the bears. For today’s trading session we anticipate a continued move to the downside and an encounter with the support level located at 1.6315.
Fundamental Outlook
United Kingdom’s Consumer Price Index comes out at 09:30 am GMT with an anticipated value of 2.1%, (unchanged from last month’s value). The indicator is UK’s main inflation gauge as it is being used by the Bank of England as an inflation target. Values outside certain ranges may determine the Bank of England to adjust interest rates to counter inflation and usually, higher than expected values of this indicator strengthen the Pound and take the pair higher. The US Retail Sales numbers 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.
EUR/USD
Forex News: The US Retail Sales came out yesterday with the expected value of 0.2% and the market remained rather neutral for almost the entire day, mostly because no other major indicators were released.
Technical Outlook
After the strong move up seen last week the pair started to move sideways and nothing much happened during the first two days of the week. The previous resistance located at 1.3650 was successfully tested from above and it became support, a fact which usually triggers a continuation of the trend but no significant higher high was created and the new minor resistance located around 1.3685 is still holding. At the moment we are neutral on the pair, anticipating a break of either resistance (1.3685) or support (1.3650).
Fundamental Outlook
We have a pretty slow day ahead, with the only notable indicator being the US Producer Price Index which shows the changes in prices charged by producers for their goods and services. The expected value is 0.5%, an increase from the previous -0.1% and the time of the release is 1:30 pm GMT; usually better than expected values are beneficial for the US Dollar and drive the pair lower.
GBP/USD
The Pound strengthened against the greenback on the back of increased optimism regarding the economic situation and as a result, the pair climbed back above 1.6440 resistance.
Technical Outlook
The ranging movement continues and the pair doesn’t seem to choose a clear direction. All moves are reversed the next day so an accurate prediction regarding the next move is difficult to make. We are slightly biased towards the short side, expecting a move back below 1.6440 but today’s direction will probably be affected by Mark Carney’s testimony.
Fundamental Outlook
At 2:15 pm GMT the Governor of the Bank of England will testify at the Treasury Committee Hearing in London about the Financial Stability Report. This testimony is likely to have a strong impact on the pair and we recommend caution if trading at the time of his speech.
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.
EUR/USD
Forex News: The US Dollar strengthened significantly during yesterday’s trading session, mostly because the US Producer Price Index posted better numbers than its previous value. This was seen as a sign of improvement in economic conditions and a hint that the Fed will keep tapering the stimulus.
Technical Outlook
The resistance created at 1.3685 proved to be too strong for the pair to break and price traveled south for almost the entire duration of yesterday’s trading session, breaking decisively the support located at 1.3650. We expect the bearish price movement to continue today, but a retracement higher is needed, considering the oversold condition signaled by the Relative Strength Index on an hourly chart. To the down side, the first target for the pair is 1.3550 support.
Fundamental Outlook
The first event of the day is the release of the Euro Zone Consumer Price Index, scheduled at 10:00 am GMT and expected to remain unchanged at 0.8%. The indicator shows the fluctuations in prices paid by consumers for the goods and services they purchase and it’s the main gauge for inflation; higher values than anticipated usually take the pair higher. Later in the day, at 1:30 pm GMT the US Consumer Price Index is released, with an anticipated increase from the previous 0.0% to 0.3%.
The last important event of the day is the release of the US Philly Fed Manufacturing Index which is a survey of about 250 manufacturers from the Philadelphia district and also a leading indicator of economic health. The expected figure is 8.8, an increase from the previous 7.0 and usually better than expected numbers suggest optimism and strengthen the greenback.
GBP/USD
During his speech yesterday, BoE Governor Mark Carney suggested that a substantial increase in interest rates is not expected. This fact, combined with good US economic data took the pair lower, for a touch of 1.6315 support.
Technical Outlook
Although the pair moved considerably lower, we are still not out of the ranging period and moves to the upside are very likely, especially if the support located at 1.6315 is not broken soon. A break of this level would open the door for a move into the major support located at 1.6250 and would count as a big victory for the bears.
Fundamental Outlook
The United Kingdom didn’t schedule any important releases for today so price movement will be mostly influenced by the US events and by 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.
