FOREX NEWS: U.S. ADVANCE GDP: ENDING THE WEEK WITH A BANG?
EUR/USD
Forex News: After coming very close to the resistance at 1.1840, the pair dropped more than 100 pips due to dovish comments made by ECB President Mario Draghi. The ECB maintained the interest rate unchanged, as expected.
Technical Outlook
Yesterday’s move took the pair below the 50 period Exponential Moving Average and broke two support levels, showing that short term control belongs to the sellers. Although the latest move was strongly bearish, the pair is still considered in a range from a longer term perspective. The first place where a bounce higher can happen is the support at 1.1700, followed by 1.1670 but the chances of a climb will increase once the Relative Strength Index enters oversold.
Fundamental Outlook
At 12:30 pm GMT the Advance version of the U.S. Gross Domestic Product will be released, showing annualized changes in the total value of goods and services generated by the economy. This is the main gauge of an economy’s performance and the Advance version is the first in a series of three, thus it tends to have the strongest impact. The expected change is 2.5% and higher number are beneficial for the US Dollar.
GBP/USD
Yesterday the pair retraced some of the gains made a day before and descended again into the 50 period Exponential Moving Average, partly due to recovery signs shown by the US Dollar.
Technical Outlook
Lately we’ve seen increased volatility but the pair is still inside a range, without a clear bias. For today we expect to see a move into 1.3160, where action will probably stall while market participants decide the next move. An important role will be played by the U.S. Advance GDP but as long as price is trading below the 50 Exponential Moving Average, the technical bias is slightly bearish.
Fundamental Outlook
The United Kingdom didn’t schedule important economic data releases so all eyes will be on the US Dollar for the GDP numbers.
FOREX NEWS: OVERSOLD LEVELS WARN OF POTENTIAL PULLBACKS. GERMAN CPI IN THE SPOTLIGHT
EUR/USD
Forex News: Friday’s trading session belonged to the bears and the pair continued on a downward path. The U.S. Advance GDP posted a value above expectations (actual 3.0%, forecast 2.6%) and this contributed to the drop.
Technical Outlook
The pair broke out of the range that it was in and the bias is clearly bearish but strong moves usually retrace after the initial momentum fades. Also, the Relative Strength Index is oversold and moving up and all this means that we will probably see a bounce above 1.1610. Once this retracement completes, we expect the bears to step in again, taking price at least into 1.1575.
Fundamental Outlook
The German Preliminary Consumer Price Index will be today’s main event, showing changes in the price that Germans pay for the goods and services they purchase. This is the main gauge of inflation and the German economy accounts for a major part of the entire Eurozone economy, so we can expect a hefty impact on the currency, with higher numbers strengthening it. The forecast is 0.1% and the time of release is 1:00 pm GMT.
GBP/USD
The US Dollar was boosted Friday by the better than expected U.S. Gross Domestic Product and the pair continued lower, breaching support. Later in the day we saw a bounce up, generated in part by profit taking.
Technical Outlook
Although the latest momentum is bearish, the pair is not in a downtrend and the support at 1.3100 is not broken. This suggests that price will probably continue upwards until 1.3160 is reached and possibly into the 50 period EMA but as long as these two resistances remain intact, our bias is bearish, anticipating a break of 1.3100.
Fundamental Outlook
The Net Lending to Individuals will be released today at 9:30 am GMT, and expected to show a reading of 5.5 Billion. The report shows changes in the total value of credit issued to individuals and has a positive impact on the Pound if it posts a higher than expected reading; however, the impact is usually low-to-medium.
FOREX NEWS: PAIRS ON THE RISE, OVERALL BIAS STILL NEGATIVE
EUR/USD
Forex News: The Euro pushed the pair above immediate resistance yesterday, although the German CPI came out slightly below expectations. However, the move was mostly technical and was anticipated due to the oversold condition of the pair.
Technical Outlook
Even if yesterday the pair moved upwards, the strength still favours the bears and we expect to see a continuation of the move seen the other week. If price continues higher, the first resistance will be encountered at 1.1670 but the extent of the climb should be limited and there’s a great probability for price to fall through 1.1610 – 1.1600 and into 1.1575.
Fundamental Outlook
Today at 10:00 am GMT we take a look at Eurozone inflation with the release of the European Consumer Price Index but we don’t expect a huge impact mostly because the German CPI, which accounts for a big part of overall inflation, was already released yesterday. However, higher numbers than the forecast 1.5% will probably strengthen the single currency.
At 2:00 pm GMT the US Dollar will be affected by the Consumer Confidence, which is a survey that gauges consumers’ opinions regarding the overall economic situation. Higher numbers than the forecast 121.1 show optimism and usually strengthen the US Dollar but to a limited extent.
GBP/USD
Yesterday’s session was controlled by the bulls, who managed to take the pair above the resistance at 1.3160 and above the 50 period EMA. The move was mostly technical and was predicted by the failed break of 1.3100.
Technical Outlook
As mentioned before, the pair is not in a downtrend and all moves in one direction are reversed, which is a characteristic of a ranging market. If the buyers can maintain the pair above the 50 period EMA, we will probably see a move into 1.3280 resistance but a quick move below the EMA and below 1.3160 would show that the balance of power is tilting towards the short side, so we will probably see another attempt to break 1.3100.
Fundamental Outlook
There’s nothing major on the Pound’s calendar for today, so the pair’s direction will be decided by the U.S. data and the technical aspect.
FOREX NEWS: US DOLLAR IN THE LIMELIGHT: FOMC RATE STATEMENT AND FIRST LOOK AT EMPLOYMENT DATA
EUR/USD
Forex News: The pair remained relatively quiet for the most part of yesterday’s trading session and no special developments took place. The U.S. Consumer Confidence survey posted a value above expectations but the impact was low.
Technical Outlook
The move up seen this week is still considered a normal retracement after a strong drop that took the Relative Strength Index into oversold territory. Our bias remains bearish as long as the pair is still trading below the 50 period Exponential moving Average but we don’t exclude a climb into 1.1670; however, the pair’s direction will be heavily affected by the fundamental side today.
Fundamental Outlook
At 12:15 pm GMT we take a first look at U.S. employment data with the release of the ADP Non-Farm Employment Change, which is a report that tries to mimic the more important Non-Farm Payrolls released by the Government Friday. The forecast is 191K and usually a higher change has a positive impact on the US Dollar.
Later in the day, at 6:00 pm GMT the FOMC will issue their Rate Statement, containing the rate decision and the reasons that determined it. No rate change is expected for today but if we will get any hints about the timing of the next hike, the US Dollar will probably have a strong reaction, so caution is advised.
GBP/USD
The pair continued higher yesterday, mostly backed by increased demand for the Pound due to rate hike expectations. Price remained above the 50 period EMA and pushed towards the resistance at 1.3280.
Technical Outlook
It’s very likely to see a touch of 1.3280 resistance, based on the positive sentiment that’s currently surrounding the Pound. However, if the pair reaches that level, probably the Relative Strength Index will become overbought or will touch its 70 level and this will increase the chances of a bounce lower. Overall the pair is still in a range and today we have important data for both currencies, so the technical side will be somewhat secondary.
Fundamental Outlook
The British Manufacturing PMI will be released today at 9:30 am GMT, showing the opinions of about 600 purchasing managers from the manufacturing sector about overall economic conditions in said sector. A higher number than the expected 55.9 usually strengthens the Pound, taking the pair higher and the opposite is true for a lower number.
FOREX NEWS: BANK OF ENGLAND EXPECTED TO HIKE. POUND LOADED AND READY TO SPIKE IN VOLATILITY
EUR/USD
Forex News: The pair remained relatively calm throughout yesterday’s trading session and the FOMC decided to maintain the rate unchanged as it was widely expected, so the impact was mild. However, price reached support on the back of upbeat information contained in the Rate Statement.
Technical Outlook
The pair has created short-time resistance around 1.1655 – 1.1660 and is now testing the support at 1.1610, with the oscillators showing a bearish bias. This means that the bullish pullback may be over and that we will see a break of the current support, followed by a move into the low at 1.1575; however, a bounce from 1.1610 – 1.1600 will most likely take the pair into the 50 period Exponential Moving Average. Our bias remains bearish and we consider the move up just a normal retracement after a big drop.
Fundamental Outlook
The U.S. Unemployment Claims will be today’s only highlight, scheduled at 12:30 pm GMT and expected to show a number of 235K. The indicator has a low-to-medium impact, mostly because it is released weekly so the changes are not significant; however, a higher number of unemployed individuals usually weakens the currency, due to consumer spending implications.
GBP/USD
Yesterday the Pound bulls took price above the resistance at 1.3280 on the back of a better than expected British Manufacturing PMI but the US Dollar made a comeback later in the session and brought the pair below the previously mentioned level.
Technical Outlook
Price shows rejection at 1.3320 and has moved below the previous resistance at 1.3280 after an overbought condition showed by the Relative Strength Index. These are clear bearish signs, which suggest that we will likely see an encounter with the 50 period Exponential Moving Average. That being said, today’s price action will be heavily affected by Bank of England’s rate decision, thus the technical aspect will be secondary.
Fundamental Outlook
Today is a huge day for the Pound, mainly because the Bank of England is expected to hike the interest rate from the current 0.25% to 0.50%. If this happens, we will likely see increased volatility and strength for the Pound.
The announcement is scheduled at 12:00 pm GMT and at the same time the BOE will release their Inflation Report, containing economic and inflation projections for the next 2 years. Half an hour later, at 12:30 pm GMT, BOE Governor Carney will hold a press conference, discussing the Inflation Report. This is another reason for increased volatility, so caution is strongly advised.
FOREX NEWS: US DOLLAR PREPARES FOR THE BIGGEST RELEASE OF THE WEEK: U.S. NON-FARM PAYROLLS
EUR/USD
Forex News: The pair behaved erratically yesterday and dropped below 1.1600 support just to jump higher immediately after. Price remained below the 50 period Exponential Moving Average but this type of price action calls for caution.
Technical Outlook
The last candle seen on the chart shows that volatility is high but the market is still unsure about the next direction. As long as the pair is trading below the 50 period EMA and below the resistance zone between 1.1670 – 1.1700, our bias remains bearish but as mentioned before, caution is advised because a clear direction cannot be predicted. Also, today’s technical aspect will be secondary to the fundamental due to the important NFP release.
Fundamental Outlook
The main event of the day is without a doubt the release of the U.S. Non-Farm Payrolls, a report that shows changes in the total number of employed people, excluding the farming industry. This is widely regarded as the most important U.S. jobs data and has a strong impact on the greenback almost every time. Today’s release is scheduled at 12:30 pm GMT and the expected change is 311K (previous -33K); higher numbers usually strengthen the greenback and show increased economic activity.
GBP/USD
The Bank of England decided to hike the interest rate to 0.50% but this was somewhat priced into the market, so the Pound was more affected by the forward guidance offered by the Bank, saying that “very gradual” increases are expected.
Technical Outlook
The strong move seen yesterday and the break of 1.3100 support could mean that the ranging period is over and that we will see a more directional behaviour in the future. For the short term we expect to see a touch of 1.3030 support where a retracement will probably occur. Of course, the pair’s movement today will be heavily affected by the U.S. employment data.
Fundamental Outlook
At 9:30 am GMT the British Services PMI is released, showing the opinions of purchasing managers about business and economic conditions in the services sector. A higher number than the anticipated 53.3 usually strengthens the currency but the impact is mild if the actual number matches expectations.
FOREX NEWS: US DOLLAR THREATENS SUPPORT DESPITE NFP COMING OUT BELOW EXPECTATIONS
EUR/USD
Forex News: The U.S. Non-Farm Payrolls released Friday failed to meet the market expectation of 312K but still showed a higher number than previous. This initially created a spike up, which was soon reversed and the pair ended the trading week on support.
Technical Outlook
Price action is choppy lately and the pair hasn’t made any clear moves after the drop into 1.1575. Currently it is stuck inside the horizontal channel created by 1.1610 support and 1.1670 resistance and until we see a clean break, we can expect more of the same choppy movement. However, the Euro bulls failed to take price above the 50 period EMA and the current momentum is bearish, with the US Dollar boosted by the Non-Farm Payrolls numbers. This makes us anticipate a break of current support, followed by a move into 1.1575.
Fundamental Outlook
We don’t have anything of note on the economic calendar for the Euro and US Dollar today but the Eurogroup Meetings take place and this may be a reason for increased volatility. However the Meetings are closed to the press and usually don’t have a huge impact unless some important decisions are made.
GBP/USD
The pair spiked above 1.3100 Friday at the time of the NFP release but the gains were soon erased after the market digested the numbers, so the session ended below resistance, very close to the opening of the day.
Technical Outlook
There is still bearish pressure on the pair and rejection at 1.3100 resistance was clearly seen Friday, so for today we expect a touch of 1.3030 support but the oscillators are not showing enough bearish momentum (Stochastic is oversold, RSI is approaching that territory). This means that a touch of 1.3030 will be probably followed by a bounce up; if that level is breached, then 1.3000 will be the next place where the pair may start to move up. A break of these levels will probably trigger an extended period of downside movement and would mark the end of the ranging phase.
Fundamental Outlook
The Pound will not be affected today by economic data releases, so the technical aspect will be the deciding factor for the pair’s direction.
FOREX NEWS: PAIRS DRIFTING WITHOUT CLEAR DIRECTION. ECB’S DRAGHI AND FED’S YELLEN SET TO DELIVER SPEECHES
EUR/USD
Forex News: Monday’s trading session had a bearish bias but overall action was slow and no major developments took place, mostly due to the lack of fundamental incentives.
Technical Outlook
Although price action was slow yesterday, the bears remained in control and took price close to the support located at 1.1575 but there’s an overall lack of conviction from both sides, so we may see a bounce higher when the pair will reach the support level mentioned earlier. The Relative Strength Index is approaching oversold, increasing the possibility of a move up. A clean break of 1.1575 would make 1.1480 the next target.
Fundamental Outlook
ECB President Mario Draghi will deliver opening remarks in Frankfurt at the ECB Forum on Banking Supervision, at 9:00 am GMT. Later in the day, at 7:30 pm GMT, Fed Chair Yellen will speak in Washington DC, accepting the Paul H. Douglas Award for Ethics in Government. We don’t expect these speeches to generate huge volatility because they are not directly related to monetary policy, but caution is advised nonetheless.
GBP/USD
The pair had a bullish bias yesterday and moved again above 1.3100 but at the time of writing price is still hovering near the level so a clear break hasn’t occurred. The economic scene lacked important releases so the move was mostly technical.
Technical Outlook
If the bulls can maintain price above 1.3100, we will most likely see a move into the 50 period Exponential Moving Average but as long as that line remains resistance, our bias is bearish. If the pair drops below 1.3100, we expect a touch of 1.3030 and possibly 1.3000. The Pound is still very vulnerable to any Brexit talks so it can jump or drop at any time and this makes the entire picture unclear.
Fundamental Outlook
The Pound will not be affected today by major economic data, so the technical aspect will decide the pair’s direction.
FOREX NEWS: PAIRS ON THE DOWNSLIDE, AMID A LACKLUSTRE ECONOMIC ENVIRONMENT
EUR/USD
Forex News: The pair showed rejection at resistance yesterday and picked up speed, moving south and breaching the previous low at 1.1575. The move was mostly due to increased US Dollar demand, in absence of any notable economic data.
Technical Outlook
The pair breached the nearly 4-month low at 1.1575 and this will most likely generate additional selling pressure, taking price into the 1.1500 zone (psychological level), followed by 1.1480 (technical level). However, before those targets can be reached, we will probably see moves up, possibly a re-test of 1.1575 from below but at the time of writing this support is not clearly broken. The Relative Strength Index is approaching oversold territory and this may contribute to a bullish move.
Fundamental Outlook
Today’s economic calendar is lacklustre, without any notable releases, so the pair’s direction will be decided by the technical aspect unless surprise announcements occur.
GBP/USD
Yesterday’s trading session lacked major economic news but the pair showed relatively good momentum and erased a part of the move up seen Friday. Resistance is still holding and the pair is approaching support.
Technical Outlook
After moving slightly above the 50 period Exponential Moving Average and above 1.3160, price reversed, showing that we are not dealing with a true break of resistance. This means that today we will probably see a touch of 1.3100 support, where the next direction will be decided: a break will take the pair into 1.3030, testing the lower boundary of the range, while a bounce will make 1.3160 the target once more.
Fundamental Outlook
Similar to the other two currencies, the Pound will not be affected by economic data today so the main focus will be on the technical aspect.
FOREX NEWS: RANGING PHASE IS APPROACHING AN END. PREPARE FOR STRONG BREAKOUTS
EUR/USD
Forex News: The choppiness continued yesterday and the pair drifted generally sideways. This was mostly due to a lackluster economic environment, without any important data releases.
Technical Outlook
After what appeared to be a break of 1.1575 support, the pair returned above the level and tested 1.1610 resistance where it turned down again. This type of behavior is characteristic to a ranging market where price bounces between support and resistance without clear direction. Until we get a clean breakout, our bias is mostly neutral, although slightly bearish as long as price is trading below the 50 period EMA.
Fundamental Outlook
At 10:00 am GMT the European Commission will reveal their Economic Forecasts for the next 2 years. The release is not known to create huge market volatility but if it’s more hawkish than expected, it generally boosts the Euro.
On the US Dollar’s side we have the Unemployment Claims, an indicator that shows how many people asked for unemployment related benefits during the last week. The time of release 1:30 pm GMT and the expected number is 232K; values above expectations usually weaken the US Dollar but the impact is limited.
GBP/USD
The pair took a bearish path yesterday after another attempt to move above 1.3160 resistance. The economic scene was calm, without any market moving releases.
Technical Outlook
Price is facing again the support at 1.3100 and this time we expect to see a break, followed by a move into 1.3030 and possibly 1.3000. We base this prediction mostly on the fact that the bulls tried to break 1.3160 twice and the pair created a double top just above the level, which is a sign that the buyers lack strength and that bearish pressure is increasing.
Fundamental Outlook
The National Institute of Economic and Social Research (NIESR) will release at 1:00 pm GMT an Estimate of the British Gross Domestic Product. The release usually has a low impact but considering the lack of major economic data this week, we may see a higher effect that usual. The previous estimate was 0.4% and numbers above it can strengthen the Pound.
