GDMFX - Technical News-weekly

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2014.01.27 :Forex Technical Analysis: A week filled with major economic indicators

EUR/USD

Forex Technical Analysis: Last week started without strong movement and a calm economic scene but as soon as better than expected Euro Zone Manufacturing data came out, the Euro strengthened substantially and the pair touched 1.3710 resistance once more.

Technical Outlook
Although the bullish trend line was previously broken to the down side, last week’s developments brought price back above it and pierced through 1.3710 resistance. However, on the Daily chart we can notice a pin bar (candle with long upper wick) which suggests rejection and a potential move lower. If 1.3710 holds, the next target may be 1.3550 support but a move above the mentioned resistance will open the door for a move towards 1.3830.

Fundamental Outlook
The first event of the week is scheduled Monday and it’s the German Ifo Business Climate which draws its importance for the large sample used: about 7,000 businesses are surveyed and asked to rate the current economic conditions and to offer a 6-month outlook. The US New Home Sales are released the same day, showing the number of houses sold during the previous month.

Tuesday the United States announce the Durable Goods Sales which represent purchases of goods with a life expectancy of at least three years. Later in the day the US Consumer Confidence indicator is released and is often regarded as a leading indicator of consumer spending.

The most important event of the week is release of the FOMC Statement and US Federal Funds rate decision scheduled Wednesday. The rate is not expected to change and probably the monetary stimulus issue will be the more important aspect which will most likely create huge volatility in the market.

Thursday Germany announces the Consumer Price Index which is the main gauge of inflation; the same day, the US releases the Gross Domestic Product which is an economy’s main performance measurement. The trading week finishes Friday with the release of the Euro Zone Consumer Price Index and the German Retail Sales; both are considered high-impact indicators which have the ability to move the market strongly.

GBP/USD

The Pound made substantial advances last week and the pair traveled a respectable distance to the north, breaking 1.6600 resistance and printing a new high at 1.6668.

Technical Outlook
Although the bulls were in control for almost the entire week, taking the pair above 1.6600 resistance, during the last day of the previous week price dropped for almost 200 pips indicating that a reversal may be happening. The bullish trend line is not clearly broken but if this occurs, the pair’s medium term direction will be bearish and a move toward 1.6250 will be highly probable. Otherwise, 1.6750 is the next target for the bulls.

Fundamental Outlook
The main event of the week for the Pound is the release of UK’s Preliminary Gross Domestic Product which is scheduled Tuesday. As mentioned before, the Gross Domestic Product is an economy’s main gauge of performance and the Preliminary release tends to have the greatest impact on price action. Wednesday the UK Nationwide House Price Index is released and Thursday the value of Net Lending to Individuals comes out but both are considered medium-impact indicators and the effect on the pair varies from month to month. Of course, the US events mentioned earlier will have a direct impact on 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.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: [email protected]​

 

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2014.03.31 :Forex Technical Analysis: Euro Zone Interest Rate and U.S. Employment data – A tough week ahead

EUR/USD

Forex Technical Analysis: During last week, the US economy posted mostly better than anticipated data and the greenback strengthened as a result. The pair traveled south and touched main support which couldn’t be broken.

Technical Outlook
The support level located at 1.3710 was touched but the bears’ power wasn’t enough for a break; however, the subsequent bounce up doesn’t necessarily mean that higher prices will follow and we expect another encounter with support. If this new potential touch of 1.3710 will result in another failed break, it could mean that bulls are ready to take back control of the pair and take it above 1.3830. The Relative Strength Index on a Daily chart doesn’t indicate an extreme condition of the market and at the moment we are still in an uptrend (from a Daily chart perspective).

Fundamental Outlook
The first important event of the week is the release of the Euro Zone Consumer Price Index which shows fluctuations in inflation. A higher value is considered bullish for the Euro because the ECB may step in to adjust the Interest Rate if inflation becomes worrying. A speech of Fed Chairman Yellen is scheduled for the same day and can be a source of strong movement.

Tuesday the release of the US Manufacturing PMI is the only notable event while Wednesday, Automatic Data Processing Inc. will announce the US Employment Change numbers. This report is generated by a private company but it manages to offer hints about the Non Farm Payrolls which are released 2 days later and are regarded as the most important US employment indicator.

The most important event of the week is scheduled Thursday and it’s the ECB Press Conference which follows the Interest Rate decision. The Rate is not expected to change so Mario Draghi’s speech at the press conference will probably overshadow the rate decision release. He will also answer journalists’ questions and his attitude will most likely trigger sharp moves.

The last market-mover of the week comes out Friday in the form of the US Non Farm Employment Change (also known as Non Farm Payrolls or NFP) which is considered to be the main gauge of employment levels in the United States. Employment is closely related to consumer spending so a higher reading for the NFP usually strengthens the US Dollar.

GBP/USD

The bulls were in control of last week’s price action, taking the pair above the important level of 1.6600 on the back of a much better value of United Kingdom’s Retail Sales.

Technical Outlook
The pair is in a clear uptrend from a long term perspective and now bulls scored another victory by taking price back above 1.6600. The Relative Strength Index doesn’t show an overbought condition so price still has room to move to the upside, solidifying the control of the bulls; however, if price returns below 1.6600 early in the week, the uptrend line drawn from late 2013 will offer good support and a break of this line can trigger a continued move lower.

Fundamental Outlook
Monday Bank of England Governor Mark Carney will speak at a press conference in London and throughout the week, three Purchasing Managers’ Indexes will be released: the Manufacturing PMI, Construction PMI and Services PMI will come out Tuesday, Wednesday and Thursday respectively. These are leading indicators of economic health, each focused on a different sector and with the ability to strengthen the Pound if better numbers are posted. The important US events mentioned earlier will have a direct and strong 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.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: [email protected]​

 

[pasfx]

2014.04.14 :Forex Technical Analysis: Easter approaches, bringing irregular movement

EUR/USD

Forex Technical Analysis: Last week the bulls scored a major victory and what appeared to be a break of support actually turned into a clear and strong bounce higher which took the pair close to the year’s high.

Technical Outlook
The trend line we mentioned last week, combined with the strength of 1.3710 support, generated an almost perfect bounce higher. The uptrend is intact and the bulls are in control of the market so we expect price to move higher, approaching or even breaking the year’s high located at 1.3965. Because price traveled a hefty distance in a single direction, we also expect bearish retracements before bulls can take price higher. The main levels to watch this week are 1.3965 as resistance and 1.3830 as support, followed by 1.3710; the trend line will also provide diagonal support if it’s touched again.

Fundamental Outlook
The week begins Monday with the release of an important US indicator in the form of Retail Sales. Being a major part of American consumer spending, sales made at a retail level can highly influence the pair’s direction and can strengthen the US Dollar if better numbers are posted. Tuesday the German ZEW Economic Sentiment is released, followed by the US Consumer Price Index which has inflationary implications and will probably be the day’s main event.

Wednesday it’s Euro Zone’s turn to release the Consumer Price Index. Its importance comes from the fact that ECB closely watches it when the Interest Rate decision is made, in an attempt to keep inflation between certain ranges (just below 2% is considered optimal).

The last event of the week is Thursday’s release of the Philly Fed Manufacturing Index which is a survey based on the opinions of about 250 manufacturers from the Philadelphia district. Friday most Banks will be closed in celebration of Good Friday so irregular movement and low liquidity will be present.

GBP/USD

The Pound strengthened significantly last week, on the back of positive economic data and this translated into a bullish rally above 1.6750 resistance.

Technical Outlook
The latest bullish move was stopped by the resistance located at 1.6820, a level which wasn’t visited by price since the year 2009. Now we can notice that a Double Top has formed; this chart pattern which is considered bearish is often seen at the end of an uptrend or before a major retracement. This makes us believe that price will slide towards 1.6600 but keep in mind that bulls are showing a lot of strength so moves north have a high probability of happening.

Fundamental Outlook
The British Consumer Price Index will be released Tuesday and will probably be the week’s main event for the Pound as the CPI is the prime measurement of an economy’s inflation. Higher values have the ability to strengthen the Pound, taking the pair higher. Wednesday the UK Claimant Count Change is announced, tracking changes in British unemployment and Friday Banks will be closed. Of course, the US events mentioned above will directly influence the pair throughout the week.

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.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: [email protected]​

 

[pasfx]

FOREX NEWS: INDECISION STILL PLAYS A MAJOR ROLE IN THE MARKET​

EUR/USD

Forex News: During a speech at a conference in Amsterdam, Mario Draghi mentioned that “both unconventional and conventional instruments” will be used to deal with the possible threat of deflation. His comment weakened the Euro and allowed the pair to move lower initially but later in the day, growing turmoil in Ukraine generated another climb.

Technical Outlook

Indecision is still present in the market as we saw yesterday from the multiple changes of direction. Price is still struggling without success to break 1.3830 to the north and on the other hand, bears cannot drive the pair lower. We are still expecting a stronger move which will determine the next medium term bias but the direction of that move is hard to predict. The important levels to watch are 1.3760 as support and 1.3830 as immediate resistance, followed by 1.3900.

Fundamental Outlook

Today no major indicator releases are scheduled by either Europe or the United States so traders will focus on the technical factors.

GBP/USD

The pair had a slow day and the drop seen Wednesday couldn’t be continued yesterday. Instead, bulls and bears alternated their control over the pair numerous times, creating a difficult trading environment.

Technical Outlook

Although yesterday’s trading session lacked clear direction, we still believe that a move into 1.6750 support is in order, but since the pair is ranging lately, we don’t exclude the possibility of moves into 1.6820 resistance. Today the technical aspect will be somewhat secondary because the only major indicator of the day comes from the United Kingdom and this is likely to have a big impact on the pair’s movement.

Fundamental Outlook

The indicator we mentioned above is United Kingdom’s Retail Sales; the release is scheduled at 8:30 am GMT and the anticipated value is -0.4%, a sharp drop from the previous 1.7%. Such a drop would be detrimental for the Pound because sales made at a retail level are an important part of the entire economic activity.

We hope you had a profitable trading week and we wish you a relaxing weekend.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX NEWS: SHORT TERM RESISTANCE HOLDS. THE PROBABILITY OF NEW LOWS INCREASES

EUR/USD

Forex News: Yesterday the pair showed mixed price action with both the bulls and the bears battling for control. No major indicators were released and price couldn’t break minor resistance but the sellers didn’t manage to threaten support either.

Technical Outlook

Price action established the zone around 1.2960 as short term resistance and this will be the first barrier in front of higher prices. Yesterday we saw another rejection off of this level but further bullish movement is not out of the question and a break of the mentioned level will most likely bring in additional buyers. To the downside, the first level of interest sits at 1.2860 and a break would show that bears still have some steam left and that price will continue to move south, towards 1.2750.

Fundamental Outlook

The day’s direction will be influenced by Mario Draghi’s speech scheduled at 7:00 pm GMT. The ECB President will speak in Milan at the Eurofi Financial Forum 2014 and any reference regarding the current Euro Zone situation will most likely trigger a response in the market. Keep in mind that the relatively late hour of the speech may be a reason why impact could be mild; however, if Draghi’s position will be straightforward, the market impact will be strong so we recommend caution.

GBP/USD

After a touch of support, the pair headed north yesterday on the back of a hawkish attitude shown by Bank of England Governor Mark Carney during the Inflation Report Hearings.

Technical Outlook

Although we had some bullish action yesterday, the pair didn’t manage to break the short term resistance located at 1.6160. This might be a sign that downside movement is next, aiming for 1.6060 support, but we must note the position of the Relative Strength Index which is now coming out of oversold territory for the first time in a long period, a fact which favors the bulls. However, bearish price action is anticipated, considering the strong downtrend the pair is in.

Fundamental Outlook

The United Kingdom didn’t schedule important news releases for the day so price direction will be influenced by the technical factors.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: A HISTORIC WEEK AHEAD – SCOTTISH INDEPENDENCE TAKES CENTER STAGE

EUR/USD

Forex Technical Analysis: The fundamental scene was slow during the week that just ended and as a result, price action lacked the volatility seen throughout the last period. Also, after 8 bearish weeks, we saw the first victory of the bulls, although it was a minor one.

Technical Outlook

The week ended with price being higher than it opened but the buyers couldn’t make substantial advances and the Relative Strength Index on a Weekly chart is still trading in oversold territory. Last week’s candle shows bullish pressure (long lower wick) and these facts make us believe that we will see a climb into 1.3000 or even 1.3100. To the downside, 1.2750 is a key level which acted as strong support in the past and is likely to stop bearish movement if it will be touched.

Fundamental Outlook

The German ZEW Economic Sentiment is the week’s first notable event. This survey, scheduled Tuesday, shows the opinions of about 275 German professional investors and analysts regarding the current economic situation and a 6-month outlook. The same day, the American Producer Price Index is announced, showing the change in prices charged by producers for their services and goods. The indicator has inflationary implications because a higher producer price will be eventually passed on to the consumer.

Wednesday the United States will take center stage as the FOMC will announce the Interest Rate, a Statement will be released and a Press Conference will take place. This cluster of events is likely to generate strong moves and high volatility so caution is recommended.

Thursday Fed Chair Janet Yellen will deliver a speech in Washington DC, via satellite but throughout the day, the world’s eyes will be focused on the Scottish Independence vote which will most likely generate irregular movement. Friday lacks major events and we are likely to have a slow, ranging day.

GBP/USD

Bearish momentum slowed down last week and the bulls finally managed to close the week higher than it begun. Price action was heavily influenced by the polls regarding the Scottish Independence, a matter that will be finally settled this week when the results of the referendum are released.

Technical Outlook

The pair is currently testing the important level at 1.6250. This level acted as both support and resistance in the past and it proved to be well respected by price but the latest gap generated a clear move below it. However, it will be hard for the pair to move past this level for the second time without some sort of rejection, stall or re-test (if broken). A clear move above will make 1.6460 the next bullish target while a bounce lower will open the door for a move into 1.5900 with the first barrier being last week’s low.

Fundamental Outlook

The main event for the Pound will be the Scottish Independence vote scheduled Thursday. If the Scottish people will decide in favor of a separation from the United Kingdom, the Pound will suffer and we are likely to see huge downside movement but no matter the result, volatility will be high and caution is recommended.
Other important events are the British CPI scheduled for release Tuesday, the MPC Meeting Minutes (Wednesday), which will show a breakdown of the members’ votes regarding the interest rate and the British Retail Sales scheduled Thursday. Overall, we expect a week with strong movement which will be heavily influenced by the Referendum; as always, the US events will have a direct impact on the pair’s direction.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: UNITED KINGDOM’S UNITY REMAINS INTACT

EUR/USD

Forex Technical Analysis: Last week the US Dollar was strengthened by a hawkish attitude of Fed Chair Yellen while the European Central Bank decided to set the target for their Long Term Refinancing Option (LTRO) at 82.6 Billion Euros, a fact which was perceived as bearish and triggered another selloff.

Technical Outlook

The week belonged to the bears as a new low was printed and the downtrend was resumed. The first level of importance to the downside is located at 1.2750 and it seems this level is the pair’s next destination now that 1.3000 was re-tested from below successfully. However, the Daily Relative Strength Index didn’t move clearly out of oversold territory for a long period and this increases the possibility of bullish moves but the pair is in a clear downtrend and we favor more downside movement overall.

Fundamental Outlook

Monday ECB President Mario Draghi will testify before the European Parliament’s Economic and Monetary Committee regarding monetary policy, an event which will be surrounded by volatility and possibly strong movement depending on his attitude and answers.

The French and German Flash Manufacturing PMIs will be Tuesday’s main events while Wednesday’s headlines are the German IFO Business Climate and the American New Home Sales. Traders’ attention will then shift to the US Durable Goods Orders (goods with a life expectancy of more than three years) which are released Thursday. At the same time the Core version (which excludes from calculation transportation items) is released. Better numbers for any of the versions may strengthen the US Dollar because they suggest future increased economic activity as producers will have to work harder to fill the extra orders.

Friday the United States will release the Final version of the Gross Domestic Product but this tends to have the lowest impact of the three versions (Advance, Preliminary and Final). However, since the GDP is an economy’s main performance gauge, the market will react to surprising numbers.

GBP/USD

The Scottish people voted “No” last week on a potential separation from the United Kingdom so the 307-year old union will remain intact for now. The result triggered Pound strength and was the week’s main British event.

Technical Outlook

The pair broke 1.6460 and came close to 1.6550 resistance on the back of Pound strength generated by the Scottish vote but soon after, the Dollar erased some of the gains. Overall we had a bullish week but if price will return below 1.6250, we are likely to see a move in close vicinity of 1.6060. To the upside, resistance still sits at 1.6460 followed by 1.6550 as these levels were just pierced and price failed to close above them.

Fundamental Outlook

The week ahead is characterized by a lackluster fundamental scene, a fact which makes us believe that we will see price slow down a bit, especially now that Scottish turmoil has settled. Tuesday the British Bankers’ Association will release the Mortgage Approvals numbers and Thursday the Confederation of British Industry will release a survey regarding Realized Sales. These are medium-impact indicators and we don’t expect them to create strong movement but the pair’s direction will be directly influenced by the US events mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: ALL EYES ON THE EUROPEAN CENTRAL BANK RATE AND AMERICAN EMPLOYMENT DATA
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week the US Dollar reached a 21-month high against the Euro, continuing to drag the pair lower on the back of strength generated by speculation that the Fed will move to raise interest rates before other Central Banks do.

Technical Outlook

An important support level was broken last week, showing the clear difference in strength between the Euro and the Dollar. The first support is now located at 1.2660, followed by 1.2280 but the Relative Strength Index on a Weekly chart shows a clear oversold condition and this increases the chance of bullish retracements. Keep in mind that the RSI is not a clear signal to go long as it can stay in oversold territory for a relatively long period and we may easily see another bearish week. To the upside, 1.2750 will probably turn into resistance.

Fundamental Outlook

We have an important week ahead, with the first major event being the release of the German Preliminary CPI scheduled Monday. As this is the main gauge of inflation and the German economy is a pillar of the entire Euro Zone, we expect volatility at the time of the release. Euro Zone’s CPI Estimate will be released Tuesday and the same day a survey regarding American Consumer Confidence comes out.
Wednesday’s headline will be the ADP Non Farm Employment Change, a private report which tries to mimic the Government report issued 2 days later. Thursday will be the most important day of the week for the Euro as the ECB will announce the interest rate and Mario Draghi will hold a press conference discussing the rate decision and the economic situation of the Euro Zone. This is almost always a reason for strong and sometimes irregular movement so we recommend caution if trading during the Conference.
The US Dollar will be strongly influenced Friday by the Non Farm Employment report which is considered the most important data regarding the American job market and almost always generates big swings.

GBP/USD

The bears managed to take price lower last week, a behavior mostly generated by US Dollar strength, not by Pound weakness. An important level was touched and we expect some bullish reaction here.

Technical Outlook

During the previous weeks a bullish retracement was completed and it seems now the downtrend will continue. For that to happen, the current level at 1.6250 must be broken decisively; even if last week closed below it, the move cannot be considered a true break because price is still very close to the level and a retest was not seen. To the upside, the first barrier is located at 1.6460.

Fundamental Outlook

Three important indexes are released this week by the United Kingdom: the Manufacturing PMI comes out Wednesday, followed Thursday by the Construction PMI and finishing the week Friday with the Services PMI. For these indicators, purchasing managers from the manufacturing, construction and services sectors will be asked to give their opinions on the health of each sector. The surveys act as leading indicator of economic health and usually have a big impact on the Pound. As always, the pair will be directly influenced by the important US events mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: PRICE ACTION SLOWS DOWN ON THE BACK OF A QUIET FUNDAMENTAL SCENE
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week’s price action made it clear that the European economy is in need of further stimulus while employment levels in the United States rose more than anticipated, adding fuel to an already strong US Dollar.

Technical Outlook

The current selloff is one of the longest seen in recent years as price is falling since July without even a slight retracement on the Weekly charts. It is true that some bullish retracements were seen on the daily charts, but nothing significant and this raises questions about where price will stop. The first support ahead is located at 1.2440 and the Relative Strength Index is deep in oversold territory so we might see some bull power here. However, last week we warned that another bearish week is possible even though the RSI is oversold and the market dropped; the same applies for this week but the fundamental scene lacks huge releases so we might be in for slower price action.

Fundamental Outlook

Monday there are no important American indicators and the Euro will only be affected by a medium-impact release: German Factory Orders. This is a leading indicator of production as more orders placed with manufacturers would suggest that activity will have to increase to fill these orders.
Tuesday we have another slow day in terms of economic releases for both the Euro and the Dollar but Wednesday we expect more action as the FOMC will release the Minutes of their latest Meeting. The document will offer insights into the reasons which influenced the members’ latest vote regarding interest rates and may also contain hints about a potential rate hike.
Thursday the G20 (Group of 20) meetings start and ECB President Mario Draghi will speak in Washington DC about the recent European situation. As always, his speeches are reasons for increased volatility and caution is recommended. Friday the G20 meetings will continue but other than that, no major economic or financial releases are scheduled.

GBP/USD

British economy showed signs of slowing down last week as economic data disappointed somewhat and the US Dollar continued to strengthen, resulting in a bearish week and broken support.

Technical Outlook

Now that 1.6060 is broken, the pair is heading towards the important zone around 1.5900 which acted as strong support in the past. For the entire 2014 the pair traded above 1.6000 and the move below this psychological support is an important victory for the bears but we must note the oversold condition of the Relative Strength Index which increases the chances of a bullish bounce if price will touch 1.5900. First major resistance sits at 1.6250 while immediate resistance is located at 1.6060.

Fundamental Outlook

British Manufacturing Production data will be released Tuesday and the same day a Gross Domestic Product estimate will be announced. Both indicators have the potential to strengthen the Pound if their value will be higher than forecast and vice versa for lower numbers. Thursday the Bank of England will announce their interest rate decision but no change is expected from the current 0.50% so we don’t expect a lot of volatility. Thursday and Friday the pair’s movement will be affected by the G20 Meetings.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: DOWNTREND LOSES STEAM. NEW LOWS STILL A DISTINCT POSSIBILITY
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week we had the first significant bullish move in a long time on the back of both technical and fundamental reasons. However, the second part of the week belonged to the bears as the US Dollar regained its strength.

Technical Outlook

Last week’s strong price action pierced through two resistance levels: 1.2660 and 1.2750 but the Weekly candle closed below these levels. At the moment we can see a long upper wick and this is a sign of rejection and underlying US Dollar strength. The Relative Strength Index is starting to move upwards, coming out of oversold territory, a thing which suggests that we might see more upside movement. The signals are pretty mixed but keep in mind we are in a downtrend and this increases the chances of a new low.

Fundamental Outlook

US banks will be closed Monday, celebrating Columbus Day and Europe doesn’t release any major indicators but the Eurogroup Meetings take place and this may be a reason of volatility. The German ZEW Economic Sentiment survey is Tuesday’s main event while Wednesday is a busier day: ECB President Mario Draghi will speak at a Conference organized by the European Central Bank and the US Retail Sales come out, together with the American Producer Price Index.
The Philly Fed Manufacturing Index is released Thursday while Friday’s main event will be a speech of Fed Chair Janet Yellen. The final event of the week is an American Consumer Sentiment survey released by the University of Michigan.

GBP/USD

Bank of England decided to keep the interest rate unchanged and the week was bullish but some downside action was seen during the last two days. The Pound is starting to gain against the greenback but a downtrend is still in place.

Technical Outlook

During the first part of the week price came close to the major resistance at 1.6250 but the bulls ran out of steam before this level could be seriously threatened. At the moment, downside movement is rejected by the support at 1.6060 and bullish divergence is present on a Daily chart (lower low on price – higher low on RSI). These factors increase the chances of a move into 1.6250 resistance but there is still a lot of US Dollar strength and a break of 1.6060 will make 1.5900 the next destination.

Fundamental Outlook

The British Consumer Price Index, which is the main inflation gauge, is released Tuesday, followed Wednesday by the Claimant Count Change which shows the change in the number of unemployed British people. These are the only notable events for the Pound this week but the pair’s direction will be influenced by the US releases as well.


Written by: Bogdan Giulvezan