FOREX NEWS: BULLISH PRESSURE MOUNTS AHEAD OF EUROPEAN CPI
EUR/USD
Forex News: The German Preliminary CPI came out as expected, showing a change of 0.1% and the United States Final GDP posted a change of 3.1%, slightly higher than the forecast 3.0%. However, the data wasn’t a strong market mover and the pair climbed mostly on technical reasons.
Technical Outlook
The Relative Strength Index and the Stochastic were oversold and price came very close to 1.1713 support. Also, the pair is still in an uptrend from a Daily chart perspective so all these reasons contributed to a bounce at support. The current move will likely retrace to re-test the level at 1.1775; if the level holds and turns into support, we will probably see an extended move north, with 1.1840 as first target. We don’t expect significant moves above 1.1840 unless surprising developments take place. If the pair moves below 1.1775, we expect a move into 1.1713 – 1.1700.
Fundamental Outlook
The European Flash Estimate Consumer Price Index will be today’s highlight for the Euro. This is the main gauge of inflation and usually has a high impact on the single currency, with higher numbers strengthening it. The time of release is 9:00 am GMT and the expected change is 1.6% compared to the previous 1.5%.
GBP/USD
The pair approached 1.3330 support but the bears ran out of steam and the Pound erased the previous losses, climbing into 1.3450 resistance. Mark Carney’s speech did not create huge volatility and went mostly unnoticed.
Technical Outlook
The pair is facing an important hurdle represented by the resistance at 1.3450 and the 50 period Exponential Moving Average. If this confluence zone is broken, it will show that the Pound is regaining its previous strength and would also indicate that we are headed into higher territory. On the other hand, a bounce lower from here will make 1.3330 the first target.
Fundamental Outlook
The Final version of the British GDP will be released today at 8:30 am GMT, and expected to show a 0.3% change, same as previous. This is the last version and thus it tends to have the lowest impact but it’s an important indicator nonetheless so it shouldn’t be overlooked.
At 2:00 pm GMT BOE, Governor Mark Carney will deliver closing remarks at the Bank of England's conference celebrating 20 years of independence. Considering that yesterday’s opening speech didn’t create huge volatility, probably the same will happen today but of course, this kind of speeches should always be treated with caution.
FOREX NEWS: BREAKOUTS IN THE MAKING. MANUFACTURING DATA EYED FOR NEXT DIRECTION
EUR/USD
Forex News: Friday the pair continued higher above 1.1775 and approached the 50 period Exponential Moving Average despite a weaker than anticipated Eurozone Consumer Price Index. Overall price action was choppy and volatility was relatively low.
Technical Outlook
The latest bullish impulse lacks strong momentum and candles are showing long wicks, which is a sign of indecision. That being said, it is very possible to see a climb into the confluence zone created by the 50 period EMA and the horizontal resistance at 1.1840 but it will be tough for the Euro bulls to punch through that mark. We expect to see a bounce lower from 1.1840 but overall, volatility will probably remain low.
Fundamental Outlook
The U.S. Manufacturing PMI is today’s only highlight in terms of economic releases. This is a survey of purchasing managers from the Manufacturing sector that tries to gauge their opinions about business conditions and overall health of the sector. The time of release is 2:00 pm GMT and the expected reading is 57.9; higher numbers are beneficial to the US Dollar but the impact is medium.
GBP/USD
The first part of Friday’s trading session was bearish, with the pair descending into the support at 1.3350. The British GDP numbers came out below expectations, contributing to the initial drop but the pair recovered in the second part of the session.
Technical Outlook
Price is trapped between the 50 period Exponential Moving Average and the support at 1.3350. This is a relatively tight range and today we expect a breakout but the direction is not clear. However, rejection is clearly seen at support (two candles with long lower wicks) and the pair is in an uptrend from a longer term perspective, so the balance is slightly tilted towards the bulls.
Fundamental Outlook
The British Manufacturing PMI is scheduled for release at 8:30 am GMT and expected to show a figure of 56.3. Same as the U.S. PMI discussed earlier, this survey acts as a gauge of optimism and economic health, with higher numbers being beneficial for the currency.
Forex News: Yesterday the pair showed surprisingly high activity, characterized by bearish momentum and a clear break of 1.1775. The U.S. Manufacturing Index showed a better than anticipated reading but the release wasn’t the main reason for the drop.
Technical Outlook
The strong move through 1.1775 indicates that price is likely to continue on a downward path, at least until 1.1713 – 1.1700 is reached and we expect that to happen today. It’s very possible to see a re-test of the recently broken level at 1.1775 but as long as that level remains intact, the bias remains negative. A break of the mentioned support would further solidify the control of the bears for the medium term.
Fundamental Outlook
German banks will be closed today in celebration of German Unity Day and no major economic data will be released. The United States economic calendar is also light, meaning that we will probably have a slow trading session.
GBP/USD
The British Manufacturing PMI came out below expectations, a fact which triggered a downslide below 1.3350 and very close to the support at 1.3250. Overall yesterday was a strongly bearish session, with the sellers in almost complete control.
Technical Outlook
Yesterday the pair showed strong bearish momentum, advancing more than 100 pips to the downside but sharp moves are usually followed by a retracement or at least a period of sideways movement. On top of that, the Relative Strength Index is now oversold and the pair has reached a support level at 1.3250. All these factors point towards a potential bounce higher but even if this is true, we don’t expect to see a move above 1.3350 because the current bias is bearish.
Fundamental Outlook
At 8:30 am GMT the British Construction PMI will be released, showing the opinions of purchasing managers from the Construction sector about business conditions and the health of said sector. The survey has a medium impact, but higher numbers usually strengthen the Pound; the expected reading for today is 51.2.
FOREX NEWS: US DOLLAR IN THE LIMELIGHT: FIRST LOOK AT UNITED STATES EMPLOYMENT EUR/USD Forex News: Yesterday the pair bounced higher after an initial break of 1.1713 support. Most of the session was bullish but this behaviour was somewhat expected.
Technical Outlook
After the bounce at 1.1713 – 1.1700, the pair climbed but encountered resistance at 1.1775. The Relative Strength Index was oversold, which was an early warning that a move like this will soon follow but the overall bias remains bearish and we expect to see a bounce lower from the current level. If this resistance is broken, the pair will probably climb into the 50 period EMA but a lot will depend on the economic data released today.
Fundamental Outlook
Today at 12:15 pm GMT we take a first look at the jobs situation in the United States with the release of the ADP Non-Farm Employment Change. The report tracks changes in the number of employed people, excluding the farming sector and Government. The impact is lower than the NFP released Friday but higher numbers than the anticipated 151K strengthen the US Dollar nonetheless.
At 5:15 pm GMT, ECB President Mario Draghi will deliver opening remarks at the Inauguration of the ECB Visitor Center. Two hours later, at 7:15 pm GMT, Fed Chair Janet Yellen will deliver a speech at a community banking conference hosted by the Federal Reserve Bank of St. Louis. These speeches may have little impact but on the other hand, they could generate increased volatility, so caution is recommended.
GBP/USD
The British Construction PMI came out below market expectations but this didn’t do much for the bears and the pair failed to break 1.3250, instead moving almost sideways, a behavior normal after a big drop.
Technical Outlook
The Relative Strength Index is still in oversold territory and the support at 1.3250 proved strong yesterday although it was breached on several occasions. The pair still needs to move higher before more significant advances south will take place but unless surprises happen, the level at 1.3350 will not be breached today. If a bounce up takes place, 1.3300 is a good psychological level from where downside movement may resume. A break of 1.3250 will make 1.3160 the first target.
Fundamental Outlook
The British Services PMI is today’s only highlight, scheduled at 8:30 am GMT. This is a survey of purchasing managers that tries to gauge their opinions about business conditions in the sector and usually has a medium-to-low impact in the Pound. Today’s expected reading is 53.3 and higher numbers are beneficial for the currency.
FOREX NEWS: RANGE-BOUND TRADING LIKELY COMING TO AN END. BREAKOUTS IMMINENT
EUR/USD
Forex News: The pair had a slower day than expected, mostly because the U.S. employment numbers came very close to analysts’ forecast. Price remained close to 1.1775 resistance, without a clear bias.
Technical Outlook
The pair shows some rejection around 1.1775 and the medium term bias is bearish, so this points toward a bounce from resistance and a move into the support at 1.1713 – 1.1700. If the pair moves above 1.1775, it will encounter the 50 period Exponential Moving Average, which is another place where downside movement may resume. A break of these two resistance levels would show that bullish pressure is increasing and would make 1.1840 the first target.
Fundamental Outlook
We have a relatively slow day ahead, with the most notable highlight being the release of the U.S. Factory Orders, which is an indicator that shows the change in the value of orders placed with manufacturers. A higher number suggests increased economic activity and usually strengthens the greenback but the impact is often low. The time of the release is 2:00 pm GMT and the expected change is 1.0% (previous -3.3%).
GBP/USD
The Pound-Dollar had a very slow day, hovering near the support at 1.3250 for the entire session. The British Services PMI showed a value slightly above expectations but it wasn’t enough to generate strong movement.
Technical Outlook
Yesterday’s price action doesn’t hold any clues for today’s direction but we still consider that a stronger retracement to the north is needed before 1.3250 can be broken. The first upside barrier is the psychological resistance at 1.3300, followed by 1.3350 and the 50 period Exponential Moving Average; these are good places where bearish movement may resume but it’s also possible to see a break of 1.3250 before these marks are hit.
Fundamental Outlook
The Pound will not be affected by important economic releases today, so the technical aspect will be the main factor that will decide the pair’s direction.
FOREX NEWS: US DOLLAR GAINS MOMENTUM. NON-FARM PAYROLLS EYED FOR NEXT MOVE
EUR/USD
Forex News: Yesterday the pair failed to break the resistance at 1.1775 and bounced lower as a consequence, reaching the target at 1.1713. The U.S. economic data released during the day was positive, thus aiding the drop.
Technical Outlook
Currently the pair is testing the support zone between 1.1713 – 1.1700, fuelled by a positive US Dollar sentiment. From a short-to-medium term perspective price is in a range, and it bounced many times from this zone, so we cannot rule out another rejection. However, the technical side will be overshadowed by the fundamental today and we expect to see choppy/ranging price action until the NFP release. If the current support is broken, the next target will become 1.1660, followed by 1.1600 and to the upside 1.1775 remains first resistance.
Fundamental Outlook
At 12:30 pm GMT the U.S. Non-Farm Payrolls report, which is considered the most important employment data in the U.S., will be released. The report shows changes in the total number of employed people, excluding the farming industry and usually has a very high impact on the greenback, mostly because consumer spending is directly correlated with employment. The expected change is 82K (previous 156K) and higher numbers are beneficial for the economy.
GBP/USD
The Pound dropped again yesterday, mostly on rumours that British Prime Minister May will be asked to resign her position. Two support levels were broken and the bears remained in control throughout the day.
Technical Outlook
The recent drop was fuelled by fundamental reasons but from a technical point of view, the Relative Strength Index is oversold, suggesting that a climb will soon follow, with increased chances of that happening if 1.3100 is reached. However, today’s price action will also be affected by the important NFP release, so the technical side will remain secondary.
Fundamental Outlook
There are no scheduled economic releases for today but any news coming from the British political scene will probably have a high impact on the Pound. Also, the U.S. employment data will have a direct impact on the pair.
FOREX NEWS: US DOLLAR VULNERABLE AFTER DISAPPOINTING NFP NUMBERS. UPSIDE PRICE ACTION TO FOLLOW
EUR/USD
Forex News: Friday, after an initial drop below 1.1700, the pair started to climb, mostly on US Dollar weakness triggered by the disappointing Non-Farm Payrolls report. Overall price action was choppy and volatility remained low until the NFP release.
Technical Outlook
The current move up may extend into the 50 period Exponential Moving Average because the US Dollar is affected by worse than expected employment data but we don’t expect to see a move above the 50 EMA or above 1.1775. To the downside 1.1700 is the first barrier but the overall picture is unclear and we may get a ranging session due to the lack of economic releases.
Fundamental Outlook
Today United States banks will be closed in observance of Columbus Day and no major economic data will be released. On the Euro side we don’t have anything important either and this will probably contribute to a slow day.
GBP/USD
Although the US Dollar suffered from a disappointing NFP report, the Pound couldn’t erase the previous losses and instead the pair just paused from the drop seen throughout last week.
Technical Outlook
The last few candles are showing long wicks in their lower side and the pair is clearly oversold, as indicated by the Relative Strength Index which has been moving below its 30 level for quite a long while. Today we expect to see a climb into the previous support at 1.3100, which has now turned into resistance but overall we may see a ranging session, with price trapped between 1.3100 and 1.3000.
Fundamental Outlook
The United Kingdom didn’t schedule any important economic releases for the day so the technical side will probably decide direction.
FOREX NEWS: POUND IN THE SPOTLIGHT: BRITISH MANUFACTURING AND GDP NUMBERS
EUR/USD
Forex News: The pair remained in a relatively tight range yesterday and no special developments took place, mostly because the economic calendar lacked any important announcements.
Technical Outlook
Price is still trading below the 50 period Exponential Moving Average and above the support at 1.1700, which puts the pair in a range from a short term point of view. Today we expect to see a break of either one of these technical levels and the direction of the break will probably decide the direction for the day. Overall price is still making lower highs and lower lows, so we favour the short side as long as price is below the 50 EMA.
Fundamental Outlook
The ECOFIN Meetings will start today, attended by Finance Ministers from the EU member states. The Meetings are closed to the press but a formal statement will be released at the end of the day and sometimes participants talk to reporters during the day. Usually the Meetings don’t have a huge market impact but caution is recommended nonetheless.
GBP/USD
The pair had a bullish day, with price climbing above 1.3160 and then returning below the level. The move was mostly caused by the overextended condition of the pair.
Technical Outlook
Yesterday we saw a retracement that is normal after the strong drop seen during the past week, but the overall direction remains down and we expect to see a bounce from the current level. As an alternate scenario, the move up may continue and reach the 50 period Exponential Moving Average but we don’t expect a break.
Fundamental Outlook
The British Manufacturing Production will be the day’s highlight, scheduled for release at 8:30 am GMT. The indicator shows changes in the total value of goods produced by manufacturers and usually has a hefty impact on the Pound, with higher numbers strengthening it. The expected reading is 0.3% compared to the previous 0.5%.
At 12:00 pm GMT the National Institute of Economic and Social Research (NIESR) will release a GDP Estimate and although this is not Government data, it can have a notable impact on the Pound. The previous estimate was 0.4% and higher numbers strengthen the currency.
FOREX NEWS: ALL EYES ON THE US DOLLAR FOR THE FOMC MEETING MINUTES
EUR/USD
Forex News: Yesterday the pair climbed above the 50 period Exponential Moving Average, extending the bullish move and printing a higher high. Overall price is still in a range but with a bullish bias.
Technical Outlook
The move above the 50 EMA will probably bring in additional buyers, taking the pair into the resistance zone around 1.1840. If the pair does reach that mark, we expect to see a move south but as long as price stays above the 50 EMA, our short term bias is bullish. The balance of power will tilt towards the bears if price descends below 1.1775 and below the Moving Average.
Fundamental Outlook
At 6:00 pm GMT the FOMC will release the Minutes of their latest rate Meeting and some hints about a future rate hike are expected. If the document will reveal that the Fed is preparing to hike one more time this year, the US Dollar will probably respond by strengthening.
GBP/USD
Yesterday price climbed above 1.3160, partly due to better than expected British Manufacturing numbers. The pair is approaching the 50 EMA but the move lacks strong momentum.
Technical Outlook
The first destination for the pair seems to be the 50 EMA, followed soon after by the resistance at 1.3250. If the 50 EMA holds, we expect to see a drop through 1.3160 and closer to 1.3100 but otherwise, 1.3250 will become the first target, which if surpassed, will open the door for further upside movement. The FOMC Meeting Minutes released today will be a deciding factor for price direction.
Fundamental Outlook
There are no economic releases scheduled for the Pound today so all eyes will be on the US Dollar for the FOMC Minutes release.
FOREX NEWS: FED OFFICIALS FEAR LOW INFLATION. ANOTHER HIKE THIS YEAR STILL POSSIBLE
EUR/USD
Forex News: The pair continued on a bullish path before the FOMC Meeting Minutes release, which revealed that some Fed officials fear that low inflation is not “only transitory”. The greenback weakened at the time of the release but volatility remained relatively normal.
Technical Outlook
It looks like the Dollar’s next move will be decided by inflation data but for the time being, the American currency lacks strength and the pair is climbing. However, price is currently at a resistance zone created by 1.1840 and 1.1875, with the Relative Strength Index in overbought territory. This calls for a bounce lower, which will probably occur once 1.1875 is hit. As long as the mentioned level remains intact, our bias is bearish, expecting a bounce lower.
Fundamental Outlook
The U.S. Producer Price Index will be today’s most notable release for the US Dollar, scheduled at 12:30 pm GMT. The indicator tracks changes in the price that producers charge for their goods and it has inflationary implications because a higher producer price usually leads to a higher consumer price. Today’s expected change is 0.4% (previous 0.2%) and numbers above forecast strengthen the greenback.
At 2:30 pm GMT, ECB President Draghi will speak about monetary policy in Washington DC, at the Peterson Institute for International Economics. The impact cannot be anticipated but caution should always be used when heads of central banks speak publicly.
GBP/USD
The pair remained in a range for most of yesterday’s trading session and the FOMC Minutes created a small climb due to US Dollar weakness. Overall no special developments took place and price action was slow.
Technical Outlook
Currently the pair is drifting without clear direction, meaning that we can see either a move up or down. The 50 period Exponential Moving Average is also flat, adding to the uncertainty, so until we see a clear break of 1.3250 or 1.3160, our bias is neutral. The Relative Strength Index is not showing an overextended condition but the Stochastic is overbought and crossing down; this is not a strong bearish signal but combined with the inability to move above the 50 EMA, it may suggest that lower prices will follow.
Fundamental Outlook
The Pound has another light day ahead, so the technical aspect and the U.S. data will be the main price drivers.
