FOREX NEWS: U.S. INFLATION EYED FOR NEXT MOVE. POSSIBLE RATE HIKE IMPLICATIONS
EUR/USD
Forex News: After reaching the resistance at 1.1875, the pair bounced lower, due to the technical reasons outlined yesterday but also due to upbeat US Dollar sentiment triggered by positive economic data.
Technical Outlook
The overbought condition of the Relative Strength Index combined with the resistance level at 1.1875 generated a bounce lower, which is likely to extend into the 50 period Exponential Moving Average. However, if price returns above 1.1840, we will most likely see another test of 1.1875 but we don’t expect major advances north until a deeper retracement occurs.
Fundamental Outlook
Today we have two very important releases scheduled at 12:30 pm GMT: the U.S. Consumer Price Index (expected change 0.6%) and the U.S. Retail Sales (expected change 1.7%). The former is the main gauge of inflation and is especially important now because some Fed officials see inflation as too low and this could potentially affect their decision to hike later this year.
Sales made at retail levels represent the major part of consumer spending and in turn, a big part of overall economic activity, thus higher numbers usually strengthen the currency.
GBP/USD
The Pound weakened during yesterday’s session on concerns that Brexit negotiations are not going as smooth as they should and this combined with positive U.S. data triggered a drop below support.
Technical Outlook
The pair broke 1.3160 and now it looks like it’s testing the level from below. If price remains below 1.3160 and below the 50 period Exponential Moving Average, we expect to see a move into 1.3100. The oscillators are starting to gain downside momentum and the Pound is affected by Brexit negotiations, so the bias is negative but a lot will depend on the U.S. data released throughout the day.
Fundamental Outlook
The economic calendar for the Pound is light today, without any major releases, so the technical aspect and the U.S. data will be the main price drivers.
FOREX NEWS: U.S. INFLATION DISAPPOINTS, US DOLLAR STILL RESILIENT
EUR/USD
Fores News: The pair spiked higher Friday when the U.S. Consumer Price Index showed a value below expectations. However, most of the US Dollar losses were soon erased and the pair finished the week below resistance.
Technical Outlook
As long as the pair is trading above the 50 period Exponential Moving Average, the bias is still bullish but it must be noted that recently the resistance at 1.1875 was touched twice and each time price dropped. This shows that bearish pressure is increasing and the bulls lack the necessary strength to take price higher, at least for the time being. If resistance is not broken early in the session, we expect a drop through the 50 EMA and into 1.1775.
Fundamental Outlook
The day’s only notable release is the Empire State Manufacturing Index, which is a survey of about 200 manufacturers from the New York state. The respondents are asked to rate the level of business conditions and the survey acts as a leading indicator of optimism and economic health. The time of release is 12:30 pm GMT and the expected reading is 20.3 but the survey has a limited impact.
GBP/USD
The pair showed choppy price action Friday and ended the session close to where it started it. The US Dollar weakened at the time of the CPI release but erased most of the losses soon after.
Technical Outlook
Friday the bulls attempted to take price higher but failed and this resulted in a candle with a long upper wick, which is a sign of rejection, so we expect a move lower for today. However, the pair will most likely remain between the resistance at 1.3350 and the support at 1.3250 for the entire trading session or at least for a big part of it.
Fundamental Outlook
The Pound has a light economic calendar today, so the technical aspect will decide the pair’s direction. The lack of economic data releases may also trigger a slow day.
FOREX NEWS: FULL DAY FOR THE POUND: INFLATION DATA AND BOE GOVERNOR’S TESTIMONY
EUR/USD
Yesterday the pair moved below the 50 period Exponential Moving Average and approached the support at 1.1775 but overall the session was pretty slow. The Empire State Manufacturing Index posted a value of 30.2, higher than the expected 20.3 and this helped the US Dollar to some extent.
Technical Outlook
Although the pair descended below the 50 EMA, it lacks momentum and seems like neither side is in control. However, if the support at 1.1775 is not broken soon, this will show that the balance is tilting towards the bulls and 1.1840 will become the first target. Until an important level is broken, our view is mostly neutral.
Fundamental Outlook
The German ZEW Economic Sentiment will be released today at 9:00 am GMT and will show the opinions of about 300 German professional analysts and investors regarding a 6-month economic outlook for the German economy. Usually a higher number than the expected 20.3 is beneficial for the Euro but the impact is often low if the actual number matches the forecast.
GBP/USD
The pair remained in a tight range for most of yesterday’s trading session mostly due to the lack of economic data releases for the Pound.
Technical Outlook
Although yesterday the pair moved sideways for the most part of the session, in the afternoon we saw a drop into 1.3250 and into the 50 EMA, followed by a bounce higher. This shows that 1.3250 is still a good support level, thus a break will show increased bearish pressure. As long as the pair is trading between 1.3250 and 1.3350, our bias is neutral but a lot will depend on the British economic data.
Fundamental Outlook
Today is an important day for the Pound, due to the release of the British Consumer Price Index, which is the main gauge of inflation and is closely watched by the BOE when deciding interest rate changes. The time of release is 8:30 am GMT and the expected reading is 3.0% (previously 2.9%). Higher numbers usually strengthen the Pound because high inflation eventually leads to a rate hike.
At 10:15 am GMT, BOE Governor Mark Carney will testify in London, before the Treasury Select Committee. This testimony may have a strong impact on the Pound, so we recommend caution until volatility settles down.
FOREX NEWS: US DOLLAR REGAINS ITS SWAGGER. SUPPORT BROKEN AND LOWER PRICES TO FOLLOW
EUR/USD
Forex News: The Euro weakened yesterday after a disappointing German ZEW survey and this allowed the pair to break support and to move south for almost the entire trading session.
Technical Outlook
The pair is trading below the 50 period Exponential Moving Average and below 1.1775 so the short term outlook is bearish, making us anticipate a move closer to 1.1700. However, it must be noted that the last few candles are showing long wicks in their lower part and the Relative Strength Index is approaching oversold, which are signs of rejection. This means that the pair will probably retrace higher before reaching 1.1700 but as long as it remains below the 50 EMA, the bias is bearish.
Fundamental Outlook
At 8:10 am GMT, ECB President Mario Draghi will deliver opening remarks at the ECB Conference held in Frankfurt. The impact on the currency will depend on his attitude and matters discussed but cannot be anticipated beforehand. However, volatility is likely to surge and caution is always advised when heads of central banks speak publicly.
At 12:30 pm GMT the U.S. Building Permits will be released, showing how many construction permits for residential buildings were released during the previous month. This is a gauge of future construction activity and usually the greenback is positively affected by a number above forecast, which for today is 1.25 Million (annualized number).
GBP/USD
The Pound pushed slightly higher at the time of the British CPI release (3.0% change, as anticipated) but it came under heavy selling pressure and dropped for more than 100 pips, breaking the key handle at 1.3250.
Technical Outlook
The pair broke with ease the confluence zone created by 1.3250 and the 50 period EMA, showing increased bearish pressure. However, at the time of writing, the drop is showing rejection at 1.3160 so a move up cannot be ruled out. That being said, our bias remains bearish as long as price is trading below the 50 EMA and below 1.3250, so we expect a drop to 1.3100 or even lower.
Fundamental Outlook
The main event for the Pound today will be the release of the Average Earnings Index, which shows changes in the price that employers pay for labour. Higher wages lead to increased consumer spending and this in turn strengthens the Pound, so the indicator has a hefty impact. The time of release is 8:30 am GMT and the expected change is 2.1%.
FOREX NEWS: US DOLLAR FAILS TO BREAK SUPPORT. BRITISH RETAIL SALES EYED FOR NEXT MOVE
EUR/USD
Forex News: After dipping into the area around 1.1735, the pair recovered and moved higher, breaking 1.1775 and reaching the 50 period EMA. The U.S. Building Permits came out lower than expected, facilitating the climb.
Technical Outlook
The pair is currently at a crossroads: if the bulls can break the 50 period Exponential Moving Average, the climb will probably continue until 1.1840 is reached. Otherwise, we expect a drop through 1.1775 into the minor support at 1.1735 and possibly 1.1700. The oscillators are showing upside momentum but recently the US Dollar is showing signs of strength so the overall bias is still unclear.
Fundamental Outlook
The Philly Fed Manufacturing Index will be released today at 12:30 pm GMT, showing the opinions of manufacturers from the Philadelphia district regarding the general level of business conditions. The survey has a medium impact on the currency, but higher numbers than the anticipated 21.9 usually strengthen the greenback.
GBP/USD
British earnings data came out above expectations yesterday but despite this bullish signal, the pair only showed a small climb, which was quickly erased and overall the entire session was choppy.
Technical Outlook
Yesterday’s trading session doesn’t offer a lot of clues for the next move but it’s clear that 1.3160 is offering good support and is tough to break. For the short term we expect a climb into the 50 period EMA but if that mark is not surpassed, the pair will probably return to attempt another break of 1.3160. A lot will depend on the British data released today.
Fundamental Outlook
The Pound will be heavily affected today by the release of the British Retail Sales, scheduled at 8:30 am GMT. The indicator draws its importance from the fact that sales made at retail level represent the main part of consumer spending, so a higher number means that economic activity is picking up and this strengthens the currency. The expected change for today is -0.1%, while the previous was 1.0%.
FOREX NEWS: CHOPPINESS CONTINUES AS THE US DOLLAR IS SHOWING MIXED SIGNALS
EUR/USD
Forex News: Despite better than anticipated US data, the US Dollar remained in the negative territory and the pair climbed after a spike below the 50 period EMA and below 1.1775 support.
Technical Outlook
Price has reached again the important resistance zone between 1.1840 and 1.1875 but the Stochastic has entered overbought and the Relative Strength Index is approaching that territory. This is usually an early signal that the pair may be rebounding lower in the near future, and we expect that bounce to happen around 1.1875. The bias remains bullish as long as the pair is trading above the 50 period EMA.
Fundamental Outlook
At 2:00 pm GMT the U.S. Existing Home Sales are released, showing the annualized number of houses sold during the last month. The forecast is 5.30 Million but the impact is usually low-to-medium, with higher numbers strengthening the greenback.
At 11:30 pm GMT, Fed Chair Yellen will deliver a speech named "Monetary Policy Since the Financial Crisis". Caution is always recommended when heads of central banks speak but the late hour will probably diminish the impact on the market.
GBP/USD
The British Retail Sales disappointed yesterday and this generated a sharp drop but soon after, the pair reversed and erased all the losses. Overall price action remained choppy and without clear direction.
Technical Outlook
The pair is still ranging and cannot move above the 50 period EMA or below 1.3160. As long as it remains between these barriers and is showing choppy movement, our bias is neutral but a breakout will probably generate an extended move in that direction. The oscillators lack strong momentum but we can notice a candle with a very long lower wick, which is a clear sign of rejection at support.
Fundamental Outlook
The United Kingdom didn’t schedule major economic data releases for today so the technical aspect will take center stage.
FOREX NEWS: A LACKLUSTRE ECONOMIC SCENE TRIGGERS CHOPPY MOVEMENT
EUR/USD
Forex News: Friday’s price action was bearish due to increased demand for the US Dollar. The pair broke the 50 period Exponential Moving Average but stopped at 1.1775 support.
Technical Outlook
The pair is in a range-bound market, without a clear bias. This is visible on a Daily chart as well as a 4-hour chart and it means there’s an increased chance of a bounce up from the current support (1.1775) or from 1.1735 if price gets there. The 50 EMA is almost flat, so it won’t offer a strong resistance but as long as price is trading below it, the bias is slightly bearish.
Fundamental Outlook
The pair will not be affected today by any economic data, so the technical aspect will decide price direction.
GBP/USD
The Pound erased earlier losses Friday when British Prime Minister May encouraged efforts between UK and EU officials to reach common ground in Brexit negotiations. The pair bounced at support but stopped at the 50 period EMA.
Technical Outlook
The bullish momentum started by Prime Minister May’s speech slowed down by the end of Friday’s trading session and it looks like the pair is having trouble breaking the 50 EMA. If this type of resistance is not broken early in today’s session, we will most likely see a drop lower, through 1.3160 and closer to 1.3100. On the other hand, a break will take the pair into 1.3250 but we don’t expect a move above that level unless surprising news comes out.
Fundamental Outlook
Similar to the other two currencies, the Pound will not be affected today by major economic releases, so the technical aspect will take center stage.
FOREX NEWS: SUPPORT HOLDS, PAIRS STILL IN RANGE-MODE
EUR/USD
Forex News: The two currencies weren’t affected by economic releases yesterday but the pair descended below 1.1775 and touched the next support at 1.1735. The session was bearish but volatility was relatively dim.
Technical Outlook
The pair remained below the 50 period Exponential Moving Average and broke 1.1775 support but now is showing rejection at 1.1735. This means that we will probably see a re-test of 1.1775 and possibly another encounter with the 50 period EMA but if price will show rejection in that area, then we will most likely see a drop through 1.1735 and into 1.1700.
Fundamental Outlook
The Euro will take center stage today, with the release of Eurozone’s Manufacturing and Services PMIs. These are surveys of purchasing managers from the Manufacturing and Services sectors that act as leading indicators of economic health but the impact is often limited. However, higher numbers usually strengthen the Euro. Both indicators are scheduled for release at 8:00 am GMT and the expected readings are 57.9 for the Manufacturing PMI and 55.7 for the Services PMI.
GBP/USD
After reaching the 50 period EMA the pair dropped into support but then the jumped on comments made by British Prime Minister May. However, most of the climb was erased soon after and overall price action remained choppy yesterday.
Technical Outlook
Price is trapped between the 50 EMA and the support at 1.3160, and is showing choppy behaviour. Today we will most likely see a breakout that will decide the next direction but until that happens, the picture is blurry. A move above the 50 EMA will make 1.3250 the next destination, while a break of 1.3160 will take the pair into 1.3100. As long as the pair is trading below the 50 EMA our bias is slightly bearish.
Fundamental Outlook
The Pound will not be affected by economic data today so the technical aspect will decide the pair’s direction.
FOREX NEWS: POUND SLIPS LOWER AHEAD OF BRITISH GDP. NEXT SUPPORT TARGETED?
EUR/USD
Forex News: Eurozone’s Manufacturing PMI showed a value above expectation but the Services PMI disappointed so economic data was mixed yesterday and didn’t have a strong impact on the currency. Overall the pair remained in a range, with a slight bullish bias.
Technical Outlook
Price is approaching the 50 period Exponential Moving Average and is testing the resistance at 1.1775. If this resistance zone will reject price lower, we expect to see a break of 1.1735 and a move into 1.1700. Lately, price action has been choppy and confined in a tight range, and this is usually a sign that the pair is preparing for a strong move.
Fundamental Outlook
At 12:30 pm GMT the U.S. Durable Goods Orders come out, showing changes in the total value of orders placed for goods with a life expectancy of at least three years. A higher value suggests increased economic activity and usually strengthens the greenback but to a limited extent. The forecast is a change of 1.1%, while the previous was 2.0%.
GBP/USD
Yesterday the Pound slipped below the support at 1.3160 after another failed attempt to move above the 50 EMA. It looks like the pair is picking up speed and is aiming for the next support.
Technical Outlook
The break of 1.3160 makes 1.3100 the next target but it must be noted that the pair is not in a strong trend although momentum currently belongs to the bears. The lack of a clear trend means that if price reaches support (1.3100 – 1.3090) and the Relative Strength Index becomes oversold, we may see a bounce higher. However, the bulls failed twice to break the 50 EMA during the recent period and the pair broke support, so the bias is clearly bearish at least for the short term.
Fundamental Outlook
The Preliminary version of the British Gross Domestic Product will be today’s main event for the Pound. The release is scheduled at 8:30 am GMT and the expected value is 0.3%. Since the GDP is the main gauge of overall economic performance and the Preliminary version is the most important, we expect to see Pound strength if higher values are posted, and weakness otherwise.
FOREX NEWS: BIG DAY FOR THE EURO: ECB INTEREST RATE AND DRAGHI’S PRESS CONFERENCE
EUR/USD
Forex News: The bulls dominated yesterday’s session although the U.S. Durable Goods Orders showed a value above expectations. The pair climbed above immediate resistance and above the 50 period EMA.
Technical Outlook
The level at 1.1775 and the 50 period EMA created a confluence zone of resistance and the break seen yesterday shows that the Euro is winning the short term battle with the US Dollar. A lot will depend today on the ECB interest rate announcement and Mario Draghi’s press conference that follows soon after, but strictly from a technical standpoint, we expect to see a move into 1.1840.
Fundamental Outlook
Today is Euro’s turn to take center stage as the European Central Bank will announce their interest rate at 11:45 am GMT and ECB President Draghi will hold his usual press conference at 12:30 pm GMT. The current rate is 0.00% and no change is expected but the press conference is usually the main market mover.
During the conference, Mario Draghi will talk about the rate decision and then will answer journalists’ questions; this second part of the session usually generates strong volatility but the direction will be decided by his answers and attitude. Caution is advised.
GBP/USD
The Pound strengthened and took the pair more than 150 pips higher yesterday, negating all the losses incurred a day before and extending gains. Most of the move was due to a better than expected British Preliminary GDP but also upbeat comments made by British politicians.
Technical Outlook
The Pound is fuelled by a positive economic sentiment and by hawkish comments made by politicians but the pair is currently struggling to break the key resistance at 1.3250. Also, strong and fast moves in one direction are usually followed by a retracement so we expect to see some sort of pullback before 1.3250 can be broken but the bias is bullish as long as the pair remains above the 50 EMA.
Fundamental Outlook
The Pound will not be affected by economic data today but potential comments made by UK politicians will have a direct impact on the currency.
