Forex News: The lack of major data releases causes slow price action
EUR/USD
Forex News: Friday the pair continued to climb on the back of worse than anticipated numbers shown by the US Non Farm Employment report and price came very close to 1.3650 resistance, consolidating the short term control of the bulls.
Technical Outlook
As seen on a Daily chart, price is approaching a confluence zone created by the resistance located at 1.3650 and the trend line drawn from last year’s high. Usually confluence zones are hard to break so today we might see a bearish move. The Relative Strength Index is also approaching an overbought condition on the four hour chart, making further upside movement more difficult.
Fundamental Outlook
The day lacks major economic releases and the only noteworthy indicator is the French Industrial Production which comes out early at 07:45 am GMT and is expected to decrease from the previous 1.3% to -0.1%. Such a decrease would be detrimental for the Euro but the indicator usually has a mild impact on the pair.
GBP/USD
The control belonged to the bulls during Friday’s trading session and the move up was mostly generated by US Dollar weakness, not by Pound strength.
Technical Outlook
Friday’s bullish move brought the pair once again above 1.6315 and made 1.6440 the first target for today’s trading session. However, we consider that a touch of this resistance will most likely generate a bounce lower, not a break to the upside, especially considering the fact that usually Mondays are slow days and strong levels are rarely broken.
Fundamental Outlook
Today the United Kingdom didn’t schedule any economic releases and this contributes to our belief that a sow day is ahead.
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: Janet Yellen’s testimony – a reason for volatility
EUR/USD
Forex News: Yesterday’s trading session had low volume and price didn’t travel a considerable distance but the bulls were in control for the most part of the day and the pair touched the resistance located at 1.3650.
Technical Outlook
Although touched, the confluence zone created by the down trend line and 1.3650 horizontal resistance is still holding but yesterday’s slow movement doesn’t offer enough clues about the next direction. Confluence zones are usually hard to break so moves to the down side are very possible but a break will most likely add more bullish pressure to the market.
Fundamental Outlook
Today at 3:00 pm GMT, Fed Chairwoman Janet Yellen will deliver a speech before the House Financial Services Committee regarding the Semiannual Monetary Policy Report. During the second part of her testimony, Janet Yellen will answer questions asked by members of the Committee and this is usually the time when the biggest volatility can occur, depending on her attitude and answers.
GBP/USD
The pair traded mostly sideways yesterday and neither bulls nor bears were in clear control. All moves to one side were quickly reversed and we attribute this ranging price action to the lack of economic indicators.
Technical Outlook
Price is likely to pick up some speed during today’s trading session and we anticipate a move into the resistance zone created around 1.6440 followed by a fall towards 1.6315. Even if price will move to the down side, we don’t expect it to travel the entire distance to 1.6315 in one day, except if unscheduled events occur.
Fundamental Outlook
This is the second day during which the United Kingdom didn’t schedule any important economic or financial indicators so price action will be mostly influenced by technical factors and by Janet Yellen’s testimony.
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: True break of resistance or single impulse?
EUR/USD
Forex News: The US Dollar weakened considerably during yesterday’s trading session as Fed Chairwoman Janet Yellen commented that recovery of the US employment situation is “far from complete”. This allowed the pair to move above resistance and consolidated the control of the bulls.
Technical Outlook
The confluence zone created by 1.3650 resistance and the down trend line drawn from last year’s high was broken yesterday and this is a sign that further advances to the upside are probable. However, the Relative Strength Index touched the 70 level which indicates an overbought condition and a possible move to the downside. Today’s price action will show us if the break was a true one and the pair is re-testing the broken level or if it was just an impulse generated by Yellen’s comments.
Fundamental Outlook
Euro Zone’s Industrial Production is announced at 10:00 am GMT and a big decrease is expected from the previous 1.8% to -0.2%. The indicator shows the change in the productivity of the industrial sector and usually better than expected numbers strengthen the Euro, driving price higher.
GBP/USD
The pair was also affected by Yellen’s comments and as a result the US Dollar weakened against the Pound, triggering a break of resistance.
Technical Outlook
The resistance located at 1.6440 was broken again yesterday and lately price seems to respect it less, moving through it with relative ease. A successful re-test of the broken level followed by a bounce would indicate that the level has turned into support once more and that further moves to the upside will follow. The Relative Strength Index is in close vicinity to the overbought level so it is possible to see moves below 1.6440 during today’s trading session.
Fundamental Outlook
The main event of the day for the Pound will be the release of the Inflation Report and the Press Conference held by Governor Mark Carney regarding the Report. Bank of England’s projection about inflation and a two year economic growth outlook will be contained in the report and Carney’s attitude during the conference will be closely watched by market participants in an attempt to identify the pair’s next direction. Both events take place at 10:30 am GMT and we recommend caution if trading at the time.
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 day’s market-mover
EUR/USD
Forex News: The pair dropped sharply during yesterday’s trading session as the Euro Zone Industrial Production posted worse than expected numbers, indicating decreased activity and a slowdown of the economic recovery.
Technical Outlook
The latest move above 1.3650 failed to produce the expected results and price returned below resistance on the back of disappointing economic data. This shifts the balance of power in favor of the bears once more but the pair faces support at 1.3550 and moves to the north are a distinct possibility since no clear trend is in place. Today’s important US events will have a strong impact on price movement, overshadowing the technical side.
Fundamental Outlook
The US Retail Sales are released at 1:30 pm GMT and are expected to slightly decrease from the previous 0.2% to 0.0%. The retail sector represents a major part of the entire consumer spending which in turn represents the biggest part of the US economy so better than expected values usually strengthen the greenback. Later in the day, at 3:30 pm GMT Fed Chairwoman Janet Yellen will testify before the Senate Banking Committee regarding the Semiannual Monetary Policy Report and the speech has the potential to be a major market mover so we recommend caution if trading at the time.
GBP/USD
The Pound strengthened substantially against the US Dollar after the Inflation Report showed the Bank of England has a positive outlook regarding economic growth and hinted about future interest rate increases.
Technical Outlook
After breaking 1.6440, price stalled there for a while before moving furiously to the upside. Now the important resistance located at 1.6600 is very close but the Relative Strength Index is showing a clear overbought condition on a four hour chart. After such a strong move, a retracement is in order, even if the medium term control clearly belongs to the bears. The pair’s movement will be highly affected by the fundamental aspect and the technical part will be somewhat secondary.
Fundamental Outlook
Although the United Kingdom didn’t schedule the release of any economic or financial indicators, the US Retail Sales and Janet Yellen’s testimony will most likely generate volatility and sharp moves.
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 Technical Analysis: The bulls may give back some of their gains
EUR/USD
Forex Technical Analysis: The US Dollar weakened substantially against the Euro as the US Retail Sales showed a decrease of consumer spending, allowing the pair to climb for almost the entire duration of yesterday’s trading session.
Technical Outlook
The pair moved back above 1.3650, continuing the bullish impulse seen in the beginning of the week; however price is showing signs of rejection judging by the long upper wicks of the candles and strong resistance is ahead (1.3710). We are neutral on the pair but consider that a successful re-test of the recently broken level will bring the pair into 1.3710 resistance.
Fundamental Outlook
Early at 07:00 am GMT the German Gross Domestic Product is released, with an anticipated increase from the previous 0.6% to 1.3%. Such an increase will most likely strengthen the Euro as the GDP is an economy’s main performance gauge. Later in the day at 2:55 pm GMT the University of Michigan will release the US Consumer Sentiment which is a leading indicator of consumer spending and usually has a strong impact on the pair. The expected figure is 80.6, an almost insignificant increase from the previous 80.4.
GBP/USD
The Pound continued to gain against the greenback and the important resistance located at 1.6600 was broken relatively easy.
Technical Outlook
Yesterday’s climb stopped in the resistance zone created around 1.6665 and a retracement lower is still anticipated, considering the severe overbought condition indicated by the Relative Strength Index. Without a doubt the bulls are in control but a retracement is needed before the pair can move into the resistance located at 1.6750. If a move into the mentioned resistance occurs, we don’t expect it to be completed today.
Fundamental Outlook
The United Kingdom didn’t schedule any news releases for today so price action will be influenced by the US events and 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.
The Forex Market: Markets react to the Euro Group Meetings
EUR/USD
The Forex Market: Friday the US posted mixed data but overall the Dollar is weakening and this combined with better than anticipated German Gross Domestic Product generated another bullish move which took price into resistance.
Technical Outlook
The pair finished last week right on the important resistance located at 1.3710 and the Relative Strength Index just touched the 70 level, showing signs of an overbought market. These factors make us believe that today price may stall or retrace lower but the market can remain overbought for an extended period of time so further bullish advances are not out of the question.
Fundamental Outlook
The Euro Group meetings take place today and are attended by personalities from the political and financial scene. The meetings are usually closed to the press but officials often speak with journalists during the day and this can generate volatility and sharp moves, depending on the matters discussed. The US Banks will be closed in celebration of Presidents’ Day so the New York session may be characterized by irregular movement.
GBP/USD
The Pound showed tremendous strength against its counterpart and Friday the pair climbed for the fourth consecutive day on the back of speculation about a potential interest rate hike.
Technical Outlook
Price rocketed Friday and the important resistance located at 1.6750 was touched, setting the scene for a bounce-or-break scenario. Without a doubt the bulls are in control of the market but the Relative Strength Index on a four hour chart is showing a severe overbought condition. This fact, combined with the strength of the current level may finally generate a retracement lower which will most likely be followed by a move higher.
Fundamental Outlook
The United Kingdom didn’t schedule any major data releases for today so price action will be driven mostly 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.
Forex News:Yesterday the pair ranged for almost the entire day and the Euro Group meetings didn’t do much to change this behavior. Resistance is still holding and price is trading very close to it.
Technical Outlook
Recent price action doesn’t offer a lot of hints about future direction but the resistance located at 1.3710 is still holding. However, this resistance level didn’t reject strong movement and it didn’t generate a bounce lower so we consider that it is pretty fragile and can be broken by a bullish impulse. Important data is released today so a direction will probably be established.
Fundamental Outlook
At 10:00 am GMT the German ZEW Economic Sentiment is released, with an anticipated decrease from the previous 61.7 to 61.3. The importance of this survey comes from the fact that it is derived from the opinions of about 275 German institutional investors and professional analysts who are asked to rate the 6 month outlook for the German economy. Due to the nature of their jobs, they are highly informed about the economic situation and can give an accurate assessment. Usually, better than expected numbers strengthen the Euro.
GBP/USD
Pound’s strength took the pair above the resistance located at 1.6750 but yesterday the much anticipated retracement lower finally occurred and the bears made their presence known.
Technical Outlook
The uptrend is still very strong and yesterday’s move lower is considered just a retracement which cleared the overbought condition of the Relative Strength Index, not a reversal. We expect trend resumption today but if price will stop in the resistance zone (1.6750), then maybe the strength of the bulls is exhausted and the bears will take over. The first potential support is located at 1.6665 and may push price higher if touched.
Fundamental Outlook
The United Kingdom Consumer Price Index is released today at 09:30 am GMT. This is the main gauge of inflation and it is also taken into consideration by the Bank of England when the interest rate decision is made. Values of the CPI which exceed a certain range may determine the BoE to adjust rates and although the current value of 2.0% is not expected to change today, volatility is likely to be present at the time of the release; usually higher than anticipated values strengthen the Pound.
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.
The Forex Market: Fed and BoE Meeting Minutes – the day’s headlines
EUR/USD
The Forex Market: Despite a worse than expected value of the German ZEW Economic Sentiment, the pair climbed for almost the entire duration of yesterday’s trading session and resistance was broken decisively.
Technical Outlook
The decisive break of 1.3710 resistance confirms the strength of the bulls and the fact that the pair is in trading in an uptrend. This makes 1.3830 the next major resistance and target but we must note the fact that the Relative Strength Index surpassed the 70 level, thus indicating an overbought condition of the market. Of course, this condition doesn’t mean that a retracement will occur right away but further advances may be more difficult. The broken resistance located at 1.3710 is likely to turn into support if price will reach it again.
Fundamental Outlook
The US Producer Price Index is released today at 1:30 pm GMT; the indicator shows the change in the price charged by producers for their goods and services and usually higher values strengthen the US Dollar due to inflationary implications (eventually a higher price charged by producers will be passed on to the consumer). For today’s release, analysts expect a decrease from the previous 0.4% to 0.2%.
Later in the day, at 7:00 pm GMT, the FOMC will release the Minutes of their latest meeting, containing details about the reasons which influenced the Rate decision. Volatility will most likely be present at the time of the release.
GBP/USD
United Kingdom’s Consumer Price Index posted a surprising decrease to 1.9% from the anticipated 2.0%, a fact which weakened the Pound against its counterpart and allowed the pair to move lower.
Technical Outlook
The pair touched support at 1.6665 and now looks prepared for another bullish push towards 1.6750. The Relative Strength Index has cleared its overbought condition and allows moves higher but a fall below 1.6600 would shift the balance of power in favor of the bears. Today’s price action will be highly influenced by the fundamental aspect.
Fundamental Outlook
The United Kingdom releases the Claimant Count Change at 09:30 am GMT with an expected increase from the previous -24.0K to -18.3K, a fact which would be detrimental for the Pound since the indicator shows the change in the number of unemployed people claiming social benefits. At the same time the Bank of England will release the Minutes of their latest meeting, which will contain a breakdown of the members’ votes regarding the interest rate and the Asset Purchase Facility value. The US events mentioned earlier 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.
The Forex Market: Approaching support levels – a good place for trend resumption
EUR/USD
The Forex Market: Yesterday’s price action was mixed and rather ranging until the release of the FOMC meeting Minutes which generated a move lower which was not characterized by a strong or immediate continuation.
Technical Outlook
The overbought condition of the Relative Strength Index was cleared by yesterday’s move lower but now an encounter with the level of 1.3710 is very probable. If this touch occurs, price is likely to bounce higher, continuing the latest bullish momentum. Moves below 1.3710 would indicate that the power of the bulls is fading and would make 1.3650 the next target.
Fundamental Outlook
Early at 08:00 am GMT the German Manufacturing Purchasing Managers’ Index is released, with an almost insignificant decrease being anticipated: 56.4 from the previous 56.5. The indicator is derived from the opinions of managers from the manufacturing sector and it’s a leading sign of economic health so better numbers strengthen the Euro. At the same time the French Manufacturing PMI is released and it’s anticipated to increase from the previous 49.3 to 49.6. Later in the day, at 1:30 pm GMT the US will announce the Consumer Price Index which is the main inflation gauge and usually strengthens the US Dollar if higher than anticipated values are posted. Today’s expected value is 1.6% while the previous was 1.5%.
GBP/USD
Before the FOMC Minutes, the pair tested 1.6665 support zone once again but bounced higher and the FOMC Minutes failed to trigger a break of support or a significant move higher.
Technical Outlook
If the bearish impulse generated by yesterday’s US events cannot take price below 1.6665, we are likely to see higher prices. The pair already tested this support twice and didn’t succeed to break it so another failed attempt would increase the probability of uptrend resumption. Moves lower will shift the medium term balance of power in the favor of the bears only if 1.6600 is broken.
Fundamental Outlook
At 11:00 am GMT the United Kingdom announces the Industrial Order Expectations which are expected to increase from the previous -2 to 6, a fact which would fuel bullish movement but the indicator tends to have a mild impact on the market. Of course the US Consumer Price Index will directly affect the pair’s movement.
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: Ending the week with a bounce-or-break scenario
EUR/USD
Forex News: The US data released yesterday strengthened the US Dollar while German and French PMIs both showed a worse than anticipated value which proved detrimental for the Euro. Overall we had a bearish day and the pair moved slowly beneath support.
Technical Outlook
The fact that price moved below 1.3710 indicates that the power of the bulls is fading and makes 1.3650 the next target. However, the pair is still in a medium term uptrend so bullish moves are a distinct possibility, especially because the break of 1.3710 is not clear or very strong. If this is the case, the first potential resistance is located at 1.3770.
Fundamental Outlook
At 3:00 pm GMT the US Existing Home Sales are released with an anticipated decrease from the previous 4.87M to 4.73M. Under normal conditions better than expected numbers strengthen the US Dollar and take the pair lower. The Euro Zone didn’t schedule any news releases for today.
GBP/USD
The pair continued to move lower throughout yesterday’s trading session, fueled by good US data but price action was choppy, with a lot of reversals on the lower time frames.
Technical Outlook
As we mentioned before, we consider that the bears will show real signs of strength if price drops below 1.6600. So at the moment the bias is still bullish, although price didn’t bounce higher off the support located at 1.6665. The upper target of the day is 1.6750 while the first important support is located at 1.6600. However, the pair’s movement will be highly affected by the UK data released today.
Fundamental Outlook
An important UK event is scheduled today: the release of the Retail Sales numbers. A big decrease is anticipated from the previous 2.6% to -0.9%, a fact which would weaken the Pound and allow the pair to move lower. The release is scheduled at 09:30 am GMT and will probably have a strong impact on the market. The US Existing Home Sales will also affect the pair’s movement.
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.
