Forex News: Slow movement generated by the lack of major economic releases
EUR/USD
Forex News: Although Friday the US Consumer Sentiment showed a worse than expected value, the pair continued to drop, clearly breaking 1.3550 support and suggesting that bulls are losing control of the pair.
Technical Outlook
The break of 1.3550 support opens the door for a move into 1.3455 daily support but at the moment the Relative Strength Index shows an oversold condition on an hourly chart so we anticipate a move up to re-test the recently broken level, followed by a bounce lower. We have a pretty slow day in terms of economic releases so it’s very likely that price will move in a ranging manner.
Fundamental Outlook
US banks are closed today, celebrating Martin Luther King Day so the US session will lack trading volume. The Euro will be affected by the German Producer Price Index which comes out early at 07:00 am GMT and shows fluctuations in price charged by producers for their goods. The expected value is 0.2%, an increase from the previous -0.1% and usually better numbers are beneficial for the Euro but the indicator is considered to have a medium impact on the pair.
GBP/USD
The expected value for the UK Retail Sales was 0.5% but the actual was 2.6%, a huge increase which generated a massive move up and took the pair into resistance once again.
Technical Outlook
The bullish move seen Friday was generated by fundamental reasons but the resistance located at 1.6440 managed to stop the initial impulse. If the pair fails to break this resistance today, we believe that during the days to come, price will start to move to the downside, towards the place where the move originated (1.6315). Given that usually Mondays are slow days and no fundamental events take place, we don’t believe the pair will make substantial advances to either side.
Fundamental Outlook
The United Kingdom didn’t schedule any economic or financial releases and this fact combined with the US Banks being closed may generate ranging price action.
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 Meeting Minutes released by the Bank of England
EUR/USD
Forex News: Yesterday’s German ZEW Economic Sentiment survey came out with a worse than expected value, weakening the Euro and taking the pair lower. However, the initial bearish direction couldn’t be sustained throughout the session and the pair climbed later in the day.
Technical Outlook
The fact that yesterday the pair moved numerous times above and below the level of 1.3550 makes the next direction hard to anticipate. The latest price action created a minor resistance at 1.3570 and overall we are still trading in a market where the bears have the medium term control, although the momentum is starting to fade away. The main level to watch remains 1.3550.
Fundamental Outlook
The Euro Zone didn’t schedule any economic or financial indicator releases but the US will announce at 12:00 pm GMT the MBA Mortgage Approvals which are an excellent gauge of the housing market fluctuations. The current value is 11.9% and an increase suggests a thriving housing market and may strengthen the US Dollar but the indicator is not considered to have a major impact on the pair.
GBP/USD
The Pound broke 1.6440 resistance on the back of a positive growth forecast made by the International Monetary Fund regarding United Kingdom’s economy and yesterday the bulls were in almost complete control.
Technical Outlook
The latest move above 1.6440 looks like a strong one, which may determine more buyers to jump in and take the pair into the crucial resistance located at 1.6550. However, this may be just an isolated move, determined by a sudden increase in optimism but which will not trigger additional buying pressure. It’s an important day for the Pound from a fundamental viewpoint so the technical aspect will be somewhat secondary.
Fundamental Outlook
At 09:30 am GMT the UK Claimant Count Change is announced, with an expected increase from -36.7K to -33.8K; because this is a gauge of unemployment, lower numbers are beneficial for the economy and thus for the Pound. At the same time, the Bank of England Meeting Minutes are released, offering important insights into the reasons which stood behind the latest Interest Rate vote and also a breakdown of the votes, showing how many members voted to increase, decrease or keep the rate unchanged.
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: Finishing the week with the bulls in control
EUR/USD
Forex News: The anticipated strong move occurred yesterday and the pair moved out of the range that confined it for the first three days of the week. The move was mostly generated by better than expected Euro zone manufacturing data.
Technical Outlook
Although the support located at 1.3550 appeared to be broken during the week, the bears couldn’t move price lower so this zone still remains support for future price action. Yesterday’s extremely strong move broke 1.3650 resistance and price is likely to move higher, towards 1.3710 but a retracement is in order before further advances can take place. This move lower is likely to be stopped by 1.3650 and upside movement may be resumed.
Fundamental Outlook
The last day of the week lacks major news releases for the Euro or US Dollar and price movement will be mostly influenced by technical factors.
GBP/USD
Similar to the Euro, the Pound strengthened substantially against the greenback and the bulls scored a major victory by taking price above 1.6600.
Technical Outlook
If the Pound can push higher, the next resistance is located at 1.6750 (visible on a Weekly chart) but such a move has a very low probability of being completed today and it’s rather a medium term target. The Relative Strength Index maintains its overbought condition and we anticipate a retracement lower before any more bullish movement can occur.
Fundamental Outlook
At 09:30 am GMT the British Bankers’ Association will release the Mortgage Approvals which is an excellent gauge of housing market health because usually houses are purchased with the help of a mortgage. The anticipated number is 47.2 while the previous was 45.0 and usually better than expected numbers strengthen the Pound and drive the pair higher.
We hope you had a profitable 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: Price action driven by fundamental factors
EUR/USD
Forex News: After piercing through the resistance located at 1.3710, the pair bounced back Friday, creating a sharp reversal pattern which was rather difficult to trade.
Technical Outlook
At the moment the pair is confined between 1.3650 and 1.3710 and we expect it to remain within these two levels if the economic indicators released today will not show surprising numbers. If the bulls make another attempt to break 1.3710 but don’t succeed, it would suggest that momentum is starting to fade away and moves lower are probable.
Fundamental Outlook
The German Ifo Business Climate is released today at 09:00 am GMT with an anticipated increase from the previous 109.5 to 110.2. The indicator is a survey based on the opinions of about 7,000 German businesses regarding the current and 6-month outlook and is considered a leading indicator of economic health. Later in the day, at 3:00 pm GMT the US New Home Sales numbers come out, showing how the US housing market performs. An increase in the number of houses sold suggests a thriving economy and can potentially strengthen the US Dollar. The anticipated number is 457K while the previous was 464K.
GBP/USD
The pair dropped sharply Friday after moving to the upside for the entire last week and the trading session was almost completely controlled by sellers who took price almost 200 pips lower.
Technical Outlook
Although the pair climbed strongly during the last period, Friday’s sharp drop is a potential sign of reversal. The break above the resistance located at 1.6600 was a false one as price soon returned below it and now the short term uptrend is weakened, making 1.6440 a level to watch. A touch of this level may result in a bounce higher, signaling that Pound is still strong and the uptrend may resume.
Fundamental Outlook
The United Kingdom didn’t schedule any major news releases for today so price action will be influenced by the US event mentioned above and by technical factors.
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: UK’s Gross Domestic Product – a huge event for the Pound
EUR/USD
Forex News: The pair remained between support and resistance yesterday and no major moves took place although the German Ifo Business Climate was better than anticipated and the US New Home Sales posted lower numbers.
Technical Outlook
Today we anticipate a break of either the support located at 1.3650 or the resistance located at 1.3710 but the direction will be highly dependent on the economic data which will be announced by the United States. The latest momentum belongs to the bulls but 1.3710 couldn’t be broken immediately after the initial impulse so the strength of the buyers is somewhat reduced.
Fundamental Outlook
AT 1:30 pm GMT the US Durable Goods Orders are announced and their value is expected to decrease to 1.9% from the previous 3.4%. Goods with a life expectancy of at least three years are considered “durable” and usually these types of goods require a larger investment from the part of the buyer and are purchased when the economy is expanding. Better than expected values have the potential to strengthen the US Dollar. The second important event of the day is the release of the US Consumer Confidence scheduled at 3:00 pm GMT and expected to increase slightly from 78.1 to 78.3. This is a leading indicator of consumer spending and usually strengthens the greenback if better results are posted.
GBP/USD
The Pound had a bullish day yesterday, strengthening considerably during yesterday’s trading session but 1.6600 resistance was not broken so the uptrend is not resumed.
Technical Outlook
Today’s price action will be heavily influenced by fundamental factors and the direction will be decided by the value of the UK Gross Domestic Product. The levels to watch for are 1.6600 as resistance and 1.6440 as support.
Fundamental Outlook
The most anticipated event of the day is the release of United Kingdom’s Gross Domestic Product scheduled at 09:30 am GMT. The GDP is an economy’s main performance gauge and can strengthen the currency substantially if it shows good results. Today’s release is has an added importance because a big increase is anticipated, from the previous 1.9% to 2.8%, a fact which would take the pair higher if it comes true.
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: FOMC Statement – the day’s market mover
EUR/USD
Forex News: Yesterday’s trading session started on a bearish note and support appeared to be broken but a worse than anticipated value of the US Durable Goods Orders weakened the US Dollar and created a sharp reversal.
Technical Outlook
The pair is still trading between 1.3650 support and 1.3710 resistance but yesterday’s failed attempt at breaking support may result in a bounce higher for another encounter with resistance and a potential continuation of last week’s bullish impulse. The FOMC statement is the day’s market mover and we might experience ranging price action, without a clear direction until the time of its release.
Fundamental Outlook
The FOMC Statement is the most important event of the day and comes out late at 7:00 pm GMT, together with the Federal Funds Rate which is not expected to change from the current 0.25%. The Statement will contain important insights about the reasons which stood behind the rate vote and also an economic outlook which may offer hints about future rates. Discussions about the monetary stimulus program will most likely generate very strong movement in the market so we recommend caution if trading at the time.
GBP/USD
United Kingdom’s Gross Domestic Product met expectations yesterday, coming out with a value of 2.8% but the event created very difficult to trade price action, reversing the direction several times in a short while.
Technical Outlook
The strong resistance created at 1.6600 was touched yesterday but price was pushed lower signifying that the power of the bulls is starting to fade. However, we are still in a medium-term uptrend so moves to the upside are very possible. We favor slightly the down side but acknowledge the fact that price action today will be heavily influenced by the FOMC Statement.
Fundamental Outlook
Today at 12:15 pm GMT, Bank of England Governor Mark Carney will speak at the Scottish Council for Development and Industry luncheon in Edinburgh; almost all his public speeches generate volatility in the market, depending on the matters discussed so we recommend caution at the time of the event. Of course the FOMC Statement will strongly affect the pair 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: Support levels ahead – retracements anticipated
EUR/USD
Forex News: Yesterday the German Consumer Price Index showed a decrease to 1.3% from the previous 1.4% and this fact, combined with the Fed decision to reduce the QE value generated a totally bearish day for the pair.
Technical Outlook
Although we anticipated a move lower and a touch of 1.3550 support, we didn’t expect this move to be so quick and the entire distance to be traveled in a single day. At the moment price is testing 1.3550 support but the Relative Strength Index is showing an oversold condition on an hourly chart as well as on a four hour chart and we believe that a retracement is in order before any advances to the down side can be made. Of course, a decisive break of support will probably trigger additional bearish movement.
Fundamental Outlook
The Consumer Price Index for the entire Euro Zone will be released today at 10:00 am GMT and is anticipated to increase from the current 0.8% to 0.9%, a fact which would strengthen the Euro. However, because the German CPI was released a day before, today’s event may have a limited impact, especially if the actual value will not be a surprising one.
GBP/USD
The effects of the US monetary stimulus reduction were seen throughout yesterday’s trading session and the pair dropped on the back of a stronger US Dollar. Overall it was a day with clear direction and no surprising whipsaws or reversals.
Technical Outlook
Yesterday’s bearish impulse brought the pair close to the support located at 1.6440 but a break didn’t occur and the bearish momentum faded away. If today the pair will touch this support once again without breaking it, we anticipate moves higher, especially if the Relative Strength Index will cross the oversold level. A break of 1.6440 to the down side would mean an important victory for the bears and may generate an extended move south.
Fundamental Outlook
The United Kingdom didn’t schedule any major economic indicator releases for today so price action will be probably driven by the technical aspect of the market.
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: Important developments expected for both pairs
EUR/USD
Forex News: Yesterday the pair had a mixed trading session, mostly because no major economic indicators were released. Price moved slowly to the down side but the previous low was not broken so the US Dollar didn’t make significant advances against its counterpart.
Technical Outlook
We maintain our bearish stance and anticipate a move lower towards the important support located at 1.3400. The resistance at 1.3550 was still not touched so price can move into that zone before dropping and a lot will depend on the economic indicators released today.
Fundamental Outlook
At 10:00 am GMT the Euro Zone Retail Sales are released and anticipated to change from the previous 1.4% to -0.7%; such a decrease would weaken the Euro since sales made at a retail level are crucial for economy and represent the major part of consumer spending. Later in the day, at 1:15 pm GMT, Automatic Data Processing, Inc. will release the Non Farm Employment Change, providing an early situation of the jobs market in the United States. A decrease is anticipated from the previous 238K to 191K but this indicator is released by a private company and has a much milder impact than the Government situation which will be released 2 days later.
GBP/USD
The pair dropped in close vicinity of the support located at 1.6250 but a better than expected value of the British Construction Purchasing Managers’ Index strengthened the Pound and drove the pair higher.
Technical Outlook
The Relative Strength Index is still near the 30 level which suggests an oversold condition and potential moves north, but price is trading below 1.6315 which may act as resistance. Also, the major support located at 1.6250 is close to the current price and may reject it higher if touched, so the next direction is still uncertain and will probably be decided by today’s fundamental events.
Fundamental Outlook
The British Services PMI is released today at 09:30 am GMT with an anticipated increase from the previous 58.8 to 59.1. This survey is based on the opinions of purchasing managers from the services sector, is a leading indicator of economic health and has the potential to strengthen the Pound if better than expected numbers are posted. The US events will have a direct impact on the pair 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: Two Interest Rates – a boost of volatility
EUR/USD
Forex News: Yesterday’s session was very difficult to trade and was characterized by a lot of sharp reversals, especially on the lower time frames. The Euro Zone Retail Sales came out worse than anticipated but so did the ADP Non Farm Employment report and these facts generated quick changes of direction.
Technical Outlook
The resistance located at 1.3550 was touched yesterday and price is showing rejection on a four hour chart (long upper wick of the candle that touched resistance). From a strictly technical point of view, we anticipate a drop towards 1.3400 but today the ECB Press Conference is held and the market will move strongly depending on Mario Draghi’s attitude, making the technical aspect somewhat secondary.
Fundamental Outlook
Without a doubt the most important event of the day is the ECB Press Conference which takes place at 1:30 pm GMT. Although the ECB will announce the Interest Rate (not expected to change from the current 0.25%) at 12:45 pm GMT, this event will be overshadowed by Mario Draghi’s speech at the conference. He will also answer audience questions and his answers will be analyzed in detail by traders around the world, trying to anticipate the next direction, a fact which will generate sudden moves and possible sharp reversals. We recommend caution if trading during the press conference.
GBP/USD
The British Services PMI came out yesterday with a worse than anticipated value, making the pair drop to touch the support located at 1.6250. However, later in the day, disappointing US data took price higher again.
Technical Outlook
Similar to our EUR/USD outlook, we consider that price is still aiming for a move lower but the day’s fundamental events may overthrow this scenario. The resistance located at 1.6315 is holding so far but the same is true for the 1.6250. A breakout is imminent but the direction will be decided by fundamental factors.
Fundamental Outlook
At 12:00 pm GMT the Bank of England will announce the Interest Rate which is not expected to change from the current 0.50% but the event usually creates volatility even if no change occurs. At the same time the Asset Purchase Facility value is released; this represents the amount of money the Bank of England can use to purchase open market assets with the purpose of stabilizing the currency. The current value of 375B is not expected to change but a decrease is often considered beneficial for the currency and can drive 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: The day’s headline – the US Non Farm Payrolls
EUR/USD
Forex News: During yesterday’s Press Conference, ECB President Mario Draghi commented that inflationary risks remain limited and that he doesn’t see the need for additional monetary stimulus as the economy is showing some signs of recovery. As a result the Euro strengthened against the US Dollar and 1.3550 resistance was decisively broken.
Technical Outlook
After yesterday’s strong bullish move, we anticipate a consolidation period during which price will move either sideways or to the down side. Once this period is over, the bulls may take the pair into the resistance located at 1.3650 but a failed attempt to break this level will most likely bring the pair back to 1.3550. Just like yesterday, today’s trading session will be highly affected by the fundamental aspect.
Fundamental Outlook
The most important US report regarding the employment situation is released today: the Non Farm Payrolls (also known as Non Farm Employment Change). The report shows the change in the number of employed people in the US non farm sector and is considered a huge market mover. Almost always the impact is violent and immediate so we recommend caution if trading at the time. The event is scheduled at 1:30 pm GMT and the expected number is 184K while the previous was 74K; better numbers usually strengthen the US Dollar as they indicate a thriving economy.
GBP/USD
The Bank of England did not modify the Interest Rate (0.50%) and some volatility could be seen at the time of the release but no substantial developments took place and resistance is still holding.
Technical Outlook
In the second part of yesterday’s trading session the control belonged to the bulls and we saw price move above 1.6315 resistance. However, we don’t consider this move will be able to generate additional up side pressure especially because price stalled after moving above the level. We are neutral on the pair for the moment, in anticipation of the US employment situation report which will probably decide the next medium term direction.
Fundamental Outlook
The UK Manufacturing Production is released t 09:30 am GMT with an expected increase from the previous 0.0% to 0.6%. The indicator measures the change in the total output generated by manufacturers and can strengthen the Pound if better than expected values are posted. Of course the US Non Farm Payrolls will be the day’s headline and will directly affect 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.
