WEEKLY ANALYSIS: EURO PREPARES FOR ECB MEETING, US DOLLAR SHOWS MODEST RECOVERY SIGNS
EUR/USD
Weekly Analysis: Last week the pair remained in a relatively tight range, moving above and below the 50 days Exponential Moving Average, which is flat thus confirming the lack of momentum.
Technical Outlook
The pair spent another week inside the horizontal channel created by 1.1875 resistance and 1.1700 support but Friday we saw that price approached the upper part of the channel and then bounced lower. This may be a sign that we are headed towards 1.1700 once again but overall the pair is range-bound and neither side is in clear control.
Fundamental Outlook
The first day of the week lacks major announcements for any of the two currencies and action picks up Tuesday with the release of the Eurozone Manufacturing and Services PMIs, which are surveys derived from the opinions of purchasing managers regarding business conditions in the respective sector.
Wednesday’s highlight will be the release of the U.S. Durable Goods Orders, an indicator that shows changes in the total value of orders for goods with a life expectancy of more than 3 years. Thursday will be the most important day of the week for the Euro as the ECB will announce their interest rate and soon after, ECB President Mario Draghi will hold his usual press conference, which is known to be a major market mover.
The trading week ends Friday with the release of the U.S. Advance Gross Domestic Product, which is the first version in a series of three and thus tends to have the strongest impact. The GDP is an economy’s main gauge of overall performance, so higher numbers usually strengthen the currency.
GBP/USD
The pair continued lower after bouncing at 1.3350 resistance, mostly because British inflation data wasn’t as good as some expected and BOE Governor Carney didn’t show a hawkish stance.
Technical Outlook
Price descended below the 50 days Exponential Moving Average, which makes the bias bearish but the last daily candle is showing a long wick in its lower part, which is a sign of rejection. If the 50 days EMA and 1.3250 resistance can stop this upwards momentum, then we will probably see a touch of 1.3050 this week, otherwise the pair will be headed for 1.3350.
Fundamental Outlook
Only two notable releases will affect the Pound this week, both scheduled Wednesday: the Preliminary GDP (main gauge of economic performance as mentioned prior) and the Inflation Report Hearings, during which BOE Governor Carney will testify on inflation before Parliament's Treasury Committee. As always, the U.S. releases will have a direct impact on the pair’s movement.
WEEKLY ANALYSIS: US DOLLAR AND BRITISH POUND SET FOR HUGE MOVES: NON-FARM PAYROLLS AND BOE POTENTIAL RATE HIKE
EUR/USD
Weekly Analysis: The European currency weakened after ECB President Draghi announced a QE taper on Thursday last week. From 2018 the monthly pace will run at 30 billion Euros, as opposed to the current 60 billion Euros.
Technical Outlook
The rejection at the 50 days Exponential Moving Average followed by the confident break of 1.1700 key support shows that the long term uptrend is coming to an end. The pair is likely to enter a bearish market, with the next support and target located at 1.1450 but it’s also possible to see a bounce higher from the current support and a re-test of the recently broken level at 1.1700. If the level will turn into resistance, rejecting price lower, then the chances of a downtrend will increase.
Fundamental Outlook
The week starts with the release of the German Preliminary Consumer Price Index, scheduled Monday and continues Tuesday with the Eurozone CPI. These are the main gauges of inflation but often the German data has a bigger impact because it is released earlier and also because the German economy is one of the most important for the entire Eurozone.
Wednesday the FOMC will release their Rate Statement, announcing the rate decision. There’s no change expected but if the statement contains hints about the next hike, we will most likely see very strong movement. Thursday will be a slower day for the pair but the week ends Friday with the most important U.S. jobs data: the Non-Farm Payrolls, which is a report that shows changes in the total number of employed people in the U.S., excluding the farming industry. Higher numbers show increased economic activity and indicate that consumer spending is likely to pick up in the near future, thus strengthening the greenback.
GBP/USD
The pair completed another choppy week, with higher volatility than usual but it still remained between support and resistance and all strong moves in one direction were reversed.
Technical Outlook
The last move is bearish and the US Dollar is picking up pace across the board but for the time being the sellers are having difficulty breaking the support at 1.3050 and the 50 days Exponential Moving Average is still flat, indicating that the pair is in range-mode. This week we expect to see another attempt to break the mentioned support, which, if successful will open the door for an extended move lower, with 1.2950 and 1.2850 as targets. Otherwise, the 50 days EMA will become the first target.
Fundamental Outlook
The first major release for the Pound is scheduled Wednesday in the form of the British Manufacturing PMI and followed Thursday by the Construction PMI. These are surveys of purchasing managers that ask respondents to rate business conditions in their respective sectors; the impact is moderate but a greater number than expected usually strengthens the currency.
Also Thursday the Bank of England will announce the interest rate, which is expected to change from 0.25% to 0.50%. If this does happen, we will most likely see huge movement on all Pound pairs, so caution is strongly advised. The same day the Bank of England will release the Inflation Report containing an outlook for inflation and economic growth for the next 2 years and BOE Governor Carney will hold a press conference discussing the Report.
The final event of the week will be the Services PMI, scheduled Friday but this release will probably be overshadowed by the events that unfold Thursday.
WEEKLY ANALYSIS: BEARISH PRESSURE INCREASES, POSSIBLE DOWNTREND DEVELOPS AS THE US DOLLAR GAINS TRACTION
EUR/USD
Weekly Analysis: Despite key economic data being released last week, the pair remained in a relatively tight range, bouncing between 1.1600 support and 1.1700 resistance for the entire week.
Technical Outlook
Price is consolidating between support and resistance, which is a sign that the pair is preparing for a breakout. The latest move is bearish, testing 1.1600, so if the level can be surpassed, we expect to see a move into the next support, located at 1.1450. On the other hand, if the current support rejects price, the immediate target will become the top of last week’s range (1.1700), followed by the 50 days Exponential Moving Average. As long as price is trading below 1.1700 and below the 50 EMA, our bias is bearish.
Fundamental Outlook
The week starts with the Eurogroup Meetings, scheduled Monday and continues with the ECOFIN Meetings scheduled Tuesday. These meetings are closed to the press but participants usually speak to journalists during the day and a formal statement is released at the end of each meeting. The impact is usually negligible on the Euro, unless special developments take place.
Wednesday we don’t have anything major on the economic calendar and Thursday’s only notable event is the release of the EU Economic Forecasts, which is a document released by the European Commission, containing an economic outlook for the EU member states for the next 2 years.
Friday U.S. banks will be closed in observance of Veterans Day and the only important release will be the University of Michigan Consumer Sentiment, which is a survey that tries to gauge the opinions of consumers regarding current and future economic conditions. As you can see, we have a slow week ahead, so the technical aspect will probably take center stage.
GBP/USD
Last week the Bank of England decided to raise the interest rate from 0.25% to 0.50% but the market expected this hike to be followed by three more next year. However, the Bank’s statement showed that it was planning only two more hikes and this was received as disappointing news, thus weakening the Pound.
Technical Outlook
The pair is currently testing the support at 1.3050 but it is still ranging and a clear direction hasn’t yet emerged. The 50 days EMA is also flat, supporting the view that the pair is range-bound. The current level of support (1.3050) will be very important early in the week because a break of it will show that bearish pressure is increasing and that we will probably see a more directional behavior, with 1.2950 as first target.
Fundamental Outlook
Similar to the other two currencies, the Pound has a light economic week ahead, with only 2 notable releases. Thursday the National Institute of Economic and Social Research (NIESR) will release an Estimate version of the British Gross Domestic Product and Friday the British Manufacturing Production numbers come out, showing changes in the value of goods produced by the manufacturing sector. These indicators are not known to have a high impact on the currency, but if the actual numbers differs a lot form expectations, the effect will increase.
WEEKLY ANALYSIS: PAIRS STILL IN LIMBO. LOOKING FORWARD TO INFLATION AND RETAIL SALES DATA FOR A VOLATILITY BOOST
EUR/USD
Weekly Analysis: In the second part of last week the pair showed some signs of directional movement but overall it is still in a range, bouncing between 1.1600 and 1.1700. The lack of major economic releases contributed to the slow movement.
Technical Outlook
The sellers have tried several times to break 1.1600 support zone in the last period but all attempts have failed and now price is moving north, towards the confluence zone created by the 50 days Exponential Moving Average, the resistance at 1.1700 and the bearish trend line seen on the chart above. This confluence zone will be tough to break, considering that lately the pair has been moving very slow, but on the other hand, a break would show that finally the balance is tilting towards one side and that more directional movement will follow.
Fundamental Outlook
Monday will be a slow economic week for the pair but action picks up Tuesday with the release of the Eurozone Flash Gross Domestic Product and the German ZEW Economic Sentiment, which is a survey of about 300 institutional investors and analysts that asks respondents to give a 6-month outlook for the German economy.
Wednesday the focus shifts on the US Dollar for the release of the Consumer Price Index (which is one of the main gauges of inflation) and the Retail Sales, which represent the main part of consumer spending and thus are very important for the currency itself.
Thursday the Philly Fed Manufacturing Index will show the opinions of about 250 manufacturers from the Philadelphia district regarding overall business conditions in the district, and the week ends Friday with the U.S. Building Permits that will offer insights into the construction activity. Apart from a few major releases, we have another slow week ahead, with the technical side taking center stage.
GBP/USD
The Pound retraced higher last week, erasing some of the losses incurred a week before but the pair is still in a range, without a clear trend.
Technical Outlook
After the bounce at 1.3050 support, price moved higher and reached the 50 days Exponential Moving Average, which is flat, showing that control doesn’t clearly belong to either side. For this week we expect to see a breakout of either 1.3250 resistance or 1.3050 support and if that happens, it will probably trigger additional movement in the direction of the break. Until price moves outside one of the two levels, the pair is ranging and we can expect to see further choppiness.
Fundamental Outlook
The first important release of the week will be the British Consumer Price Index, scheduled Tuesday. This is the main gauge of inflation and usually has a strong impact on the Pound, so caution is recommended.
Wednesday’s highlight will be the release of the Average Earnings Index, a report that shows changes in the price that employers pay for labor and the final economic data of the week is scheduled Thursday in the form of the British Retail Sales numbers, which usually have a high impact on the Pound.
WEEKLY ANALYSIS: THE WEEK AHEAD: ECB’S DRAGHI AND BOE’S CARNEY TESTIFY, U.S. PREPARES FOR THANKSGIVING DAY
EUR/USD
Weekly Analysis: Buying interest around the Euro increased last week and the pair moved above several types of resistance, finishing the week more than 100 pips higher than it started.
Technical Outlook
The bulls managed to break the confluence zone created by 1.1700 resistance, the 50 days Exponential Moving Average and the bearish trend line seen on the chart above. This shows that momentum is clearly on the Euro side, so we expect to see a touch of the resistance at 1.1875 early in the week. If the level can be surpassed, the next target will become the key level at 1.2000 but it could take more than a week for the bulls to cover the entire distance. A move below the confluence zone mentioned earlier would invalidate this scenario.
Fundamental Outlook
The week opens Monday with the double testimony of ECB President Draghi before the European Parliament Economic and Monetary Affairs Committee. This is likely an event that will generate increased volatility on Euro pairs, so caution is advised.
Tuesday the economic scene will be calm and Wednesday the FOMC will release the Minutes of their latest meeting, containing details about the reasons that determined the rate vote. More importantly, if the document offers hints about future rate changes, then we will probably see strong USD movement.
Thursday U.S. banks will be closed in celebration of Thanksgiving Day and on the Euro side the Manufacturing and Services PMIs will be the most notable releases. The week finishes Friday with the German IFO Business Climate, which is a survey with a large sample size of about 7,000 businesses that are asked to rate current economic conditions and to offer a 6-month outlook.
GBP/USD
Price action was choppy, with a bullish bias last week and the pair didn’t manage to break out of the range. British data was mixed, with lower than expected CPI but better employment numbers.
Technical Outlook
The 50 days Exponential Moving Average is flat and price is bouncing between 1.3050 support and 1.3250 resistance; also, the oscillators are moving without clear momentum and all this is indicative of a ranging market. The last daily candle shows a long wick in its upper part and this increases the probability of a bounce lower but overall trading will remain range-bound until a clear breakout occurs. The levels to watch are 1.3250 followed by 1.3320 as resistance and the lower part of the range is represented by 1.3050.
Fundamental Outlook
The Pound has a slow economic week ahead, with only three notable events: Tuesday the Public Sector Net Borrowing comes out, showing differences in value between spending and income for government and public companies. The same day, Bank of England Governor Carney will testify before the Parliament's Treasury Committee on inflation and economic outlook
The last release of the week will be the Second Estimate Gross Domestic Product scheduled Thursday. The GDP is the main gauge of an economy’s performance, however this version is not as important as the Preliminary, which was already released.
WEEKLY ANALYSIS: EURO EXPLODES TO THE UPSIDE, CAPITALIZING ON A FRAIL US DOLLAR. KEY RESISTANCE EYED
EUR/USD
Weekly Analysis: Euro strength combined with US Dollar weakness across the board generated a bullish week and a break of key resistance. The pair has exited the consolidation phase but the long term uptrend has not yet resumed.
Technical Outlook
After breaking the bearish trend line seen on the chart above, the pair consolidated between the 50 days Exponential Moving Average and 1.1875 resistance. Now the consolidation is over and we are dealing with a clear bullish breakout above 1.1875, meaning that the key level at 1.2000 is the pair’s first destination. This is a technical resistance as well as a psychological level (big, round number) and the Relative Strength Index is entering overbought, so we expect to see bounces lower if the pair reaches it.
Fundamental Outlook
The week opens relatively slow, with nothing major for the Euro for the first two days of the week. For the US Dollar the highlights will be the New Home Sales scheduled Monday and followed Tuesday by the Consumer Confidence survey. These releases are not known to have a huge impact but usually a higher number strengthens the currency.
Wednesday action picks up with the Preliminary version of the German Consumer Price Index, which is the main gauge of inflation and has a hefty impact on the shared currency because the German economy is the strongest in the Eurozone. Another important release is the Preliminary version of the U.S. Gross Domestic Product, which is the main gauge of overall economic performance and later the same day, Fed Chair Yellen will testify before the Joint Economic Committee of Congress on U.S. economic outlook.
Thursday the European Flash version of the Consumer Price Index will be released and the week ends Friday with the U.S. Manufacturing PMI, which is a survey of purchasing managers that tries to gauge their optimism regarding economic conditions in the Manufacturing sector.
GBP/USD
Broad US Dollar selling was the main reason for last week’s continued climb. The pair has now moved into medium term resistance, which makes it susceptible to a bounce lower.
Technical Outlook
For the last few weeks the pair has traded inside the range created by 1.3320 resistance and 1.3050 support. Currently it’s testing the upper boundary but the last two daily candles are small and with long wicks, showing that bullish momentum is fading, so we may see a bounce that could find support around 1.3250 or even at the 50 days Exponential Moving Average. On the other hand, a clear break of 1.3320 will increase the probability of a move into 1.3450.
Fundamental Outlook
The British Bank Stress Test Results will come out Tuesday, offering insights into the financial stability of 7 banks and building societies. The same day the Bank of England will release their Financial Stability Report, which assesses the potential risks for the financial system.
The last event of the week is scheduled Friday in the form of the Manufacturing Purchasing Managers’ Index, which is a leading indicator of economic health and optimism among purchasing managers from the Manufacturing sector.
WEEKLY ANALYSIS: NON-FARM PAYROLLS – THE LAST MAJOR EMPLOYMENT DATA OF THE YEAR EUR/USD
The US Dollar showed modest gains in the beginning of last week but the pair then climbed on the back of U.S. political turmoil. Overall price action was choppy and characterized by reversals on the lower time frames.
Technical Outlook
The pair is supported by a bullish trend line that will probably push price into the key resistance at 1.2000. On the other hand, if the bears manage to break this trend line, we will most likely see a drop into the 50 days Exponential Moving Average where the next direction will be decided. The pair’s behavior this week will be heavily influenced by the U.S. political scene and by the jobs data released later in the week.
Fundamental Outlook
The week starts off slow, without any major releases scheduled Monday, while Tuesday the only notable economic data will be the U.S. Non-Manufacturing PMI (also called Services PMI), which is a survey that shows the opinions of purchasing managers regarding business conditions in the Services sector.
Wednesday action picks up and we take a first look at United States jobs situation, with the release of the ADP Non-Farm Employment Change. The report shows the estimated change in the number of employed people in the U.S., apart from the farming sector and government. A larger number of employed people indicates that consumer spending is likely to pick up in the near future and this in turn strengthens the currency.
Thursday ECB President Mario Draghi will hold a press conference in Frankfurt at the Bank of International Settlements and the economic week will end Friday with the most important U.S. employment data: the Non-Farm Payrolls. This report shows changes in the total number of employed people in the U.S., excluding the farming industry and has a very strong impact on the US Dollar. Higher numbers strengthen the currency because employment is a leading indicator of consumer spending, which in turn represents a hefty part of overall economic activity.
GBP/USD
Renewed optimism regarding Brexit negotiations took the pair above long term resistance (1.3450), reaching a weekly high at 1.3550. Some rejection was seen during the last day of the week but momentum is still on the buyers’ side.
Technical Outlook
The bias is bullish but the pair is capped by last week’s high at 1.3550 and the Relative Strength Index is entering overbought territory, warning that a deeper retracement south may follow. If early in the week the bears can break 1.3450, we may see a move back into the 1.3320 zone but on the other hand, if 1.3450 becomes support, we will probably see a move into 1.3600 area.
Fundamental Outlook
The week is rather slow for the Pound, with only a few notable releases. The Construction PMI and Services PMI will come out Monday and Tuesday respectively, showing the opinions of purchasing managers regarding business conditions in their sector.
The last announcement of the week is the Manufacturing Production scheduled Friday. This indicator shows changes in the total value of goods produced by the manufacturing sector and has a positive impact on the Pound if it posts a higher than anticipated reading; the opposite is true for a lower reading. As always, the U.S. releases will have a direct impact on the pair’s movement.
WEEKLY ANALYSIS: THREE INTEREST RATES – THREE REASONS FOR HUGE VOLATILITY
EUR/USD
Weekly Analysis: Last week belonged to the US Dollar that showed signs of recovery and took the pair into 1.1700 area. Most of the move was technical as the economic scene was slow and without market moving events.
Technical Outlook
After the break of the bullish trend line seen on the chart above, price remained below 1.1875 and descended below the 50 days Exponential Moving Average. Although last week closed below the 50 EMA, the last daily candle has a very long wick and a very small body, which is a sign of indecision, so the next direction is difficult to anticipate. For now the first support is located at 1.1700 and resistance sits at 1.1875; if price climbs above the 50 EMA, showing that the initial break was false, we expect a move into 1.1875.
Fundamental Outlook
The first notable releases of the week are scheduled Tuesday: the German ZEW Economic Sentiment (survey of about 300 German investors and analysts regarding economic conditions) and the U.S. Producer Price Index (shows changes in the price that producers charge for their goods and services).
Wednesday will be the most important day of the week for the US Dollar as the Fed will announce their interest rate, which is expected to increase from <1.25% to <1.50%. A Rate Statement will come out at the same time, outlining the reasons that determined the rate decision and half an hour later, Fed Chair Yellen will hold a press conference, discussing the rate. Given that this is the final rate announcement of the year, we may see strong movement on the US Dollar.
Thursday it’s the ECB’s turn to announce the interest rate (no change expected) and soon after, ECB President Mario Draghi will hold his usual press conference during which he will answer unscripted questions from journalists. Also Thursday the U.S. Retail Sales will come out, so this will be another day with possibly high volatility. The week ends Friday without any notable releases.
GBP/USD
The Pound had a choppy week and was affected by Brexit talks that generated periods of irregular volatility and reversals on the lower time frames. The bias was bearish but the pair remained above support.
Technical Outlook
After bouncing at 1.3320, the pair climbed above 1.3450 only to move back below it again, showing choppy price action. The technical aspect will be overshadowed by any news regarding Brexit negotiations but the levels to watch remain 1.3320 as support and 1.3550 as resistance (for now 1.3450 doesn’t seem too important). A break of 1.3320 and the 50 EMA will open the door for a move into 1.3050 but this could take more than a week.
Fundamental Outlook
The Pound has a busier week than usual, starting with the Consumer Price Index, scheduled Tuesday. This is the main gauge of inflation and shows changes in the price that consumers pay for the goods and services they purchase.
Wednesday the Average Earnings Index comes out, showing changes in the price that employers pay for labor. The indicator has inflationary implications because usually if businesses pay more for labor they tend to increase the price of their products. If the actual change surpasses expectations, this usually strengthens the Pound.
Thursday the British Retail Sales will come out and the Bank of England will announce the rate decision, which creates volatility even if no change occurs. As always, the U.S. releases will have a strong impact on the pair so caution is recommended.
WEEKLY ANALYSIS: PRICE ACTION BECOMES CHOPPIER AS WE GET CLOSER TO THE WINTER HOLIDAYS
EUR/USD
Weekly Analysis: Last week the Fed raised the interest rate from <1.25% to <1.50% as expected but Fed Chair Yellen was somewhat dovish during her press conference and this generated a jump higher on the back of US Dollar weakness. Most of the Euro gains were erased during the following days.
Technical Outlook
The pair ended last week very close to the opening price and couldn’t break free from the 50 days Exponential Moving Average, which is almost flat, indicating a lack of momentum on both sides. Currently, price action is capped by two trend lines and the break of one of them will probably decide the next direction but until that happens the pair will probably show ranging price action. Horizontal support sits at 1.1700 and resistance is located at 1.1875; for a breakout to happen price needs to clear these zones as well.
Fundamental Outlook
The first release of the week will be the Eurozone Final version of the Consumer Price Index, scheduled Monday. This is an important gauge of inflation but the Final version tends to have the lowest impact. Tuesday the German IFO Business Climate will show the opinions of about 7,000 businesses about a 6-month outlook for the German economy and on the US Dollar side the only notable release will be the Building Permits, which shows how many construction permits were issued during the previous month.
Thursday the U.S. Final Gross Domestic Product will be released, showing changes in the total value of services and goods generated by the economy and the week ends Friday with the U.S. Durable Goods Orders, an indicator that shows changes in the value of orders placed for goods with a life expectancy of at least 3 years. Overall it’s a rather slow week, mostly due to the approaching of the Winter Holidays.
GBP/USD
Last week the pair bounced between support and resistance, a behavior mostly generated by the fundamentals: first the US Dollar weakened during the Fed meeting and then it was the Pound’s turn to go down after more Brexit concerns emerged.
Technical Outlook
After failing to break 1.3450, the pair dropped into the confluence zone created by the support at 1.3320 and the 50 days Exponential Moving Average. Momentum is on the sellers’ side but as long as the mentioned support zone is intact, the pair’s direction is uncertain. A break will likely trigger a stronger drop but the focus will remain on Brexit negotiations so the Pound will be prone to sudden moves.
Fundamental Outlook
The Pound has a slow week ahead, with only a few notable releases. Wednesday BOE Governor Carney will speak before the Treasury Select Committee about the November Financial Stability Report. De pending on his attitude, the Pound may see increased volatility so caution is advised.
Thursday the Public Sector Net Borrowing comes out, showing the difference between spending and income for the Public Sector. A positive number shows deficit and a negative number shows surplus but the indicator is not a major market mover.
Friday the Current Account will be released, showing the value difference between imported and exported goods and the same day the Final version of the British GDP will come out. This is the main gauge of an economy’s performance but the Final version usually has a low impact on the currency.
Weekly Analysis: The pair had a bullish week and seemed to gain some traction but from a longer term perspective it is still trading inside a range, without a definite bias. Moreover, this ranging behavior is likely to continue throughout this week due to the Christmas Holidays.
Technical Outlook
Price bounced at the bullish trend line seen on the chart above and continued higher, reaching the bearish trend line and the horizontal resistance around 1.1875. This means that although the bias was bullish last week, we are not dealing with a breakout and the pair is still range bound. Monday and Tuesday most markets will be closed due to Christmas and volatility will probably remain irregular for the better part of the week. Caution is recommended because price may show sudden spikes due to the low liquidity, so a technical prediction is difficult to make.
Fundamental Outlook
During the first two days of the week, European and U.S. banks will be closed in celebration of the Christmas Holiday, so volatility will be highly affected and most markets will be closed. The first release of the week is scheduled Wednesday: the U.S. Consumer Confidence survey; however, we don’t expect its impact to be high considering that liquidity will be still affected by the Winter Holidays.
Thursday will be another slow day, with the U.S. Unemployment Claims as the only notable event and the week ands Friday with a release that usually has a high impact: the German Preliminary Consumer Price Index, which acts as the main gauge of inflation; however, its impact may be muted this time.
GBP/USD
After a strong climb that occurred at the beginning of last week, the pair showed choppy movement and retraced most of the gains. The macroeconomic environment was slow and contributed to the lack of directional movement.
Technical Outlook
Price action is choppy and will probably remain so until January next year. For the short term we expect to see a touch of the 50 days Exponential Moving Average and the support around 1.3320 – 1.3300, where the next direction will be decided. A bounce or break in this zone can be followed by a move into the resistance at 1.3450 or the support at 1.3250 but trading volumes will be thin and may result in sudden spikes and erratic price movement.
Fundamental Outlook
For the first two days of the week UK banks will be closed due to Christmas and the rest of the week no important economic releases will take place. We expect choppy price action and irregular volatility.
