Technical News|Gdmfx Brokerage|Daily

GDMFX

FOREX NEWS: SUPPORT IN JEOPARDY, OSCILLATORS WARN OF POSSIBLE REBOUNDS

EUR/USD

The pair retraced higher yesterday but a worse than expected German GDP combined with optimistic U.S. Retail Sales, nullified almost all Euro gains and brought the pair closer to support again.

Technical Outlook

Yesterday’s price action created minor resistance at 1.0815 where we saw a pin bar (rejection candle) followed by a hefty drop. Considering this type a behaviour, we anticipate a break of 1.0710 support but the Relative Strength Index and the Stochastic are still “dangerously” close to their respective oversold levels, so we don’t exclude the possibility of another push higher. Overall our bias remains bearish.

Fundamental Outlook

Today’s only notable release is the U.S. Producer Price Index (PPI), an indicator that tracks changes in the price that producers charge for their goods and services. The PPI has inflationary implications because a higher price charged by the producer will be eventually paid by the consumer. Today’s anticipated change is 0.3%, the scheduled time is 1:30 pm GMT and usually, higher values strengthen the US Dollar.


GBP/USD

The greenback strengthened on the back of strong Retail Sales, while the British Consumer Price Index disappointed and as a result the pair dropped below the Moving Average yesterday, completing another bearish session.

Technical Outlook

The recent drop below the 50 period Exponential Moving Average and below 1.2480 will most likely bring in additional sellers that will take the pair into 1.2325 and even further into bearish territory. Moves to the upside may be capped by the 50 EMA and by 1.2480 and we expect price to resume downside movement if it reaches the zone that was just mentioned.

Fundamental Outlook

Today we take a look at the British jobs situation with the release of the Claimant Count Change, scheduled at 9:30 am GMT. The indicator shows changes in the total number of people who asked for unemployment related benefits and higher numbers usually weaken the Pound; today’s expected number is 1.9K, while the previous was 0.7K

GDMFX

FOREX NEWS: DOLLAR CONTINUES ITS SUPREMACY AHEAD OF FED CHAIR YELLEN’S TESTIMONY

EUR/USD

Yesterday the pair slowed down compared to a day before but the sellers remained in control despite a slightly disappointing reading posted by the U.S. Producer Price Index. Support was breached but no significant advances were made after that.

Technical Outlook

The oscillators are now climbing slowly but price is still going downhill. This is a sign of bullish divergence and is an early warning of possible reversals or at least pullbacks to the upside. The first resistance and target for such a potential retracement is located at 1.0760 but if the pair remains below 1.0710, it means that the level may turn into resistance and in this case, we will see a continuation of the bearish trend.

Fundamental Outlook

It’s an important day for the US Dollar, starting with the release of the CORE version U.S. Consumer Price Index, scheduled for release at 1:30 pm GMT. The CPI is the main gauge of inflation but the CORE version excludes food and energy because these are considered too volatile; the FOMC usually pays more attention to this version and that’s why it tends to be more important for the US Dollar. Higher percentages than the expected 0.2% have the potential to take the pair lower.

At 3:00 pm GMT, Fed Chair Janet Yellen will testify before the Joint Economic Committee, on economic outlook. The event is likely to generate increased volatility and possibly irregular movement, thus caution is recommended.


GBP/USD

The British Claimant Count Change showed yesterday a worse than expected value but the Pound wasn’t strongly affected and the pair had a choppy trading session.

Technical Outlook

It looks like the bulls are having trouble breaking 1.2480 and the 50 period Exponential Moving Average to the upside. This may suggest that a drop will soon follow and if this is the case, we expect the pair to find support at 1.2325. The US Dollar is gaining against most of its counterparts and the Pound is not showing clear signs of strength so we favor the short side for the time being.

Fundamental Outlook

The British Retail Sales are today’s headline for the Pound. Scheduled at 9:30 am GMT, the indicator tracks changes in the total value of sales made at retail levels and can have a hefty impact on the Pound, with higher numbers strengthening it; today’s expected change is 0.5%, while the previous was 0.0%.

GDMFX

FOREX NEWS: ECB’S DRAGHI SPEAKS IN FRANKFURT, EURO HEADS FOR SUPPORT

EUR/USD

The CORE version of the United States CPI showed yesterday a value below analysts’ expectations and this created brief moments of bullish price action. However, most of the gains were then erased and overall we had a choppy trading session.

Technical Outlook

We have a minor support, established at 1.0665 and if this level is broken, the next important one is located around 1.0525 but we don’t expect it to be reached this week. The oscillators are exiting oversold, so they are still favouring a stronger retracement to the upside, possibly into 1.0760; however, the medium term trend is still bearish so we don’t exclude the possibility of a drop through 1.0665.

Fundamental Outlook

European Central Bank President Draghi will speak today in Frankfurt at the 26th European Banking Congress and this may be a strong reason for volatility. The Euro is likely to show irregular movement during the speech, depending on how traders will interpret the things the President will say, as well as his attitude. The speech is scheduled at 8:30 am GMT and caution is recommended.


GBP/USD

The British Retail Sales released yesterday, showed a surprising improvement of 1.9% (anticipated 0.5%) but despite all this, the pair remained below resistance and had a mixed trading session.

Technical Outlook

Despite positive British data, the pair is struggling to move above 1.2480 and remains very close to the 50 period Exponential Moving Average. This suggests that the Pound is still weak against the US Dollar and that we are likely to see a drop into 1.2325 if 1.2480 is not broken soon. Also, a decisive break of the 50 EMA would strengthen this view but as long as price remains close to the Moving Average, the pair is ranging, without clear direction.

Fundamental Outlook

The United Kingdom didn’t schedule major releases for the last day of the trading week so the technical side will decide today’s direction.

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

GDMFX

FOREX NEWS: DEEP OVERSOLD LEVELS CALL FOR BULLISH PULLBACKS

EUR/USD

The pair completed another bearish session Friday and the Dollar continued to strengthen against most of its counterparts. The pair is now approaching long term support but pullbacks are due.

Technical Outlook

The move that started with the U.S. Presidential Election is overextended, as price has travelled a long distance without a proper retracement. On a Daily chart we can clearly see that the pair didn’t have a bullish day since the Election, so it’s probably time for a move north; the oscillators have been trading below or very close to their oversold levels and this further increases the chances of bullish action. That being said, keep in mind that the overall bias is still bearish so we are likely to see a touch of 1.0525 zone soon. To the upside, the first level to watch is 1.0665, followed by 1.0700 zone.

Fundamental Outlook

Today at 4:00 pm GMT, ECB President Mario Draghi will testify in Strasbourg before the European Parliament about the European Central Bank's Annual Report. Whenever heads of central banks testify or speak publicly, volatility is likely to surge and the currency may behave erratically so we recommend caution if trading at the time. This is the only indicator that may affect the pair, so until its release we may see ranging price action.


GBP/USD

Friday the bears solidified their control over the pair and moved it comfortably below the 50 period Exponential Moving Average. Support was touched and now a “bounce or break” scenario is in play but the trading week ended before we could get a clear answer.

Technical Outlook

The support at 1.2325 was hit and price seems to react to it, so today we will probably see if we are dealing with a bounce or a break. We favor the short side, considering the US Dollar strength seen lately but the oscillators are close to oversold so we don’t exclude a bounce into the 50 period EMA. In the event of a break of 1.2325, the next target will be 1.2090 but we don’t expect it to be reached today unless surprising events take place.

Fundamental Outlook

The Pound has a lacklustre economic calendar today, so the technical aspect will determine the pair’s direction. Slow, choppy movement is also a distinct possibility.

GDMFX

FOREX NEWS: US DOLLAR SURRENDERS SHORT TERM DOMINANCE

EUR/USD

Forex News: Yesterday’s trading session was rather slow but it had a bullish bias, as the pair started a retracement which was anticipated due to the overextended condition of price. The bearish trend is still intact for the time being.

Technical Outlook

Although the pair moved higher yesterday, our bias remains bearish overall as the US Dollar is still going strong. The current move up is a much needed retracement that is likely to continue higher before downside movement can resume. The first potential resistance is located at 1.0665, followed by the more important 50 period Exponential Moving Average (the EMA will probably descend below 1.0710 until price gets there). To the downside, the low at 1.0570 is the first potential support and a break will mark the resumption of the downtrend.

Fundamental Outlook

The only notable indicator on today’s economic calendar is the U.S. Existing Home Sales, scheduled at 3:00 pm GMT and expected to show a number of 5.43M compared to the previous 5.47M (these are annualized numbers shown in a monthly format). Higher readings are usually beneficial for the US Dollar because they show a healthy house market but the effect is not always spectacular.


GBP/USD

Yesterday the Pound strengthened without apparent reason and the pair bounced at support, moving right back into resistance. The Moving Average was surpassed and the short term control belongs to the bulls.

Technical Outlook

The level at 1.2325 offered good support and the pair bounced perfectly off of it, breaking the 50 period Exponential Moving Average and reaching 1.2480 resistance. At the time of writing 1.2480 is not yet broken but if the buyers can take price above it, we will probably see an extended move to the upside. The next resistance is located at 1.2675 but we don’t expect it to be touched today.

Fundamental Outlook

The Pound will be affected today by the release of the Public Sector Net Borrowing, an indicator that shows the difference between spending and income for the government and public corporations. Lower numbers are beneficial for the Pound but the indicator often has just a mild impact. The time of release is 9:30 am GMT and the expected figure is 5.9B (previous 10.1B).

GDMFX

FOREX NEWS: FOMC MEETING MINUTES EYED FOR POSSIBLE RATE HINTS

EUR/USD

Forex News: Yesterday’s trading session was dominated by indecision and both sides looked reluctant to commit to a clear direction. U.S. house data was better than anticipated but the release had a mild impact.

Technical Outlook

The pair is in ranging mode until it breaks 1.0665 to the upside or 1.0570 to the downside. The oscillators are not showing an extreme condition so they don’t offer clear signals for the time being. If the upside prevails and immediate resistance is broken, the next target will be the 50 period Exponential Moving Average and if that mark is hit, we expect bearish action to resume.

Fundamental Outlook

At 1:30 pm GMT the US Dollar will be affected by the release of the Durable Goods Orders (goods with a life expectancy of at least three years). The expected change is 1.2%, a strong increase from the previous -0.3% and usually, higher numbers show a thriving economy, thus a stronger US Dollar.

Later in the day, at 7:00 pm GMT the Fed will release the FOMC Meeting Minutes, which contain details about the latest FOMC meeting as well as potential hints about a future rate hike. There has been speculation about a possible rate increase in December so if the Minutes point towards the same thing, the US Dollar is likely to strengthen.


GBP/USD

The bulls failed to break resistance yesterday and the US Dollar erased some of the previous losses. Movement was slower than a day before and the 50 EMA was not breached.

Technical Outlook

If the bounce at 1.2480 can extend past the 50 period Exponential Moving Average, the pair is likely to move into the support located at 1.2325 during the days to come. For now our bias is neutral, waiting to see if the moving average will be broken or if it will reject price higher. Today the technical aspect will be secondary to the fundamental because both the US Dollar and the Pound will be affected by important releases.

Fundamental Outlook

At 12:30 pm GMT the British HM Treasury will release the Autumn Forecast Statement, a document containing information about the government’s budget for the upcoming year as well as an economic outlook. The release can have a strong impact so caution is recommended.

GDMFX

FOREX NEWS: U.S. TRADERS STEP AWAY FROM THE MARKET FOR THANKSGIVING DAY

EUR/USD

Forex News: Before the FOMC Minutes, the US Dollar strengthened against the Euro, partly due to a better than expected reading for the U.S. Durable Goods Orders; the Minutes revealed that a hike is due “relatively soon” and this is likely to generate additional Dollar strength.

Technical Outlook

The pair broke the minor support at 1.0570 and is now resting on 1.0525. The greenback seems to have recovered the strength from a few days ago, so we are likely to see a break of the mentioned support. If this is the case, the next major hurdle is located at 1.0460 which is the lowest point reached in 2015; however, until price gets there we may see some form of bullish pullback, especially if the oscillators will become oversold.

Fundamental Outlook

Today the United States celebrate Thanksgiving Day and this will probably affect volatility; also, no major economic indicators will be released and all this may generate irregular movement throughout the day. On the Euro side the most notable release is the German IFO Business Climate survey, scheduled at 9:00 am GMT and expected to show 110.6 (previous 110.5). The survey is derived from the opinions of about 7,000 businesses regarding economic conditions and usually higher numbers show optimism and bring euro strength.


GBP/USD

The Pound continued its erratic movement yesterday and the pair wasn’t much affected by the FOMC Meeting Minutes. Overall price remained in a range and didn’t threaten support but came close to resistance.

Technical Outlook

After an initial move below the 50 period Exponential Moving Average, price reversed and moved back above it, showing that for the time being control doesn’t belong to either side. The latest impulse is bullish and the pair is approaching the resistance at 1.2480 but it’s not clear if the bulls will manage to break this barrier. Today’s session will be affected by the U.S. Thanksgiving holiday and we expect irregular movement.

Fundamental Outlook

We have a slow day for British economic indicators so the focus will be on the technical aspect and the pair will also be affected by the U.S. Thanksgiving Day, as mentioned before.

GDMFX

FOREX NEWS: SUPPORT REJECTS FALLING PRICES, US DOLLAR STILL IN MEDIUM TERM CONTROL

EUR/USD

Forex News: Thanksgiving Day brought low volatility, especially during the New York session and the US Dollar gave back some of the previous gains. The German IFO survey came close to analysts’ forecast so the release didn’t have a notable impact.

Technical Outlook

The support at 1.0525 rejected downside momentum yesterday and now the bulls are struggling to take the pair above the resistance at 1.0570. If they succeed in doing so, we will probably see a move into the 50 period Exponential Moving Average and the resistance at 1.0650. The day ahead lacks major economic releases and we expect a ranging session, without special developments. That being said, keep in mind that the pair is still in a downtrend and the US Dollar shows signs of strength.

Fundamental Outlook

We have a lacklustre day as far as the economic calendar is concerned so the main focus will be the technical side.


GBP/USD

The Pound-Dollar moved without conviction yesterday, ranging between the Moving Average and the resistance at 1.2480. This behaviour was partly generated by the U.S. celebrating Thanksgiving Day and partly by the lack of British releases.

Technical Outlook

The ranging period is likely to continue until 1.2480 resistance or the 50 period Exponential Moving Average is broken. When one of these events will take place, we expect price to continue moving in that direction but until a clear break occurs, our view is neutral on the pair. The oscillators are moving in the middle of their channels, lacking a clear direction and adding to the overall uncertainty.

Fundamental Outlook

The British Second Estimate version of the Gross Domestic Product is released today at 9:30 am GMT and may be a catalyst for a breakout. The GDP is the main gauge of overall economy performance, thus higher numbers than the anticipated 0.5% may bring Pound strength.

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

GDMFX

FOREX NEWS: DRAGHI TESTIFIES ON BREXIT CONSEQUENCES. EURO WILL NOT REMAIN INDIFFERENT

EUR/USD

Forex News: Friday’s movement was choppy and without special developments. The pair remained above 1.0570 but bearish pressure is mounting and rejection candles are present.

Technical Outlook

As you can see on the chart above, the candles show long wicks in their upper parts and this is a sign of bearish pressure. Price came close to the 50 period Exponential Moving Average but the bulls couldn’t even manage to touch this form of resistance and the overall trend is down so we expect to see a move below 1.0570. However, keep in mind that on a Daily chart both oscillators are deep in oversold territory so a stronger move north is not out of the question, especially if the 50 EMA will be broken.

Fundamental Outlook

Today’s only important event is the testimony of ECB President Mario Draghi, delivered before the European Parliament’s Economic Committee on the topic of monetary developments, economic perspective and Brexit consequences. These are all delicate subjects that may affect strongly the market, thus we recommend caution. The scheduled time is 2:00 pm GMT.


GBP/USD

The Second Estimate version of the British GDP, announced Friday matched analysts’ expectations (0.5% change) and the release didn’t have a strong impact. The pair remained in a tight range.

Technical Outlook

Price is trapped between the 50 period Exponential Moving Average and the resistance at 1.2480 but the chances of a breakout are very high, especially because the distance between the two barriers is so small. Given the fact that the pair has been moving almost completely sideways lately, our view is neutral until a strong move or a clear breakout occurs. Once that happens, the pair is likely to continue in the direction of the break.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements for today and this makes the technical aspect the deciding factor for the pair’s direction.

GDMFX

FOREX NEWS: A FULL DAY AHEAD: GERMAN INFLATION DATA, U.S. GDP AND CONSUMER CONFIDENCE SURVEY

EUR/USD

Forex News: After a brief move above the resistance located around 1.0650, the bears took control of yesterday’s session and the pair descended to touch support. The higher than usual volatility may be attributed partly to Draghi’s testimony.

Technical Outlook

It seems like the US Dollar is trying to gain back control over the pair, pushing it lower for another attempt to break the key support located at 1.0525. The oscillators are moving downwards, supporting a bearish move and the pair is trading below the 50 period Exponential Moving Average. As long as things remain this way, we favour the short side and anticipate a break of 1.0525.

Fundamental Outlook

At 1:00 pm GMT we take a first look at German inflation with the release of the Consumer Price Index. The indicator acts as a measure of inflation, showing changes in the price that consumers pay for the goods and services they purchase. A higher change than the forecast 0.1% can strengthen the Euro.

The Preliminary version of the U.S. Gross Domestic Product is released later at 1:30 pm GMT, with an anticipated change of 3.0% (previous 2.9%). The GDP is the main gauge of overall economic performance and usually a higher reading triggers strength for the currency.

Later in the day, at 3:00 pm GMT the Consumer Confidence survey comes out, showing the opinions of U.S. citizens about economic and business conditions. A higher number than the forecast 101.3 would show optimism, acting as a leading indicator of consumer spending, and would strengthen the US Dollar.


GBP/USD

Similar to the Euro-Dollar, this pair climbed above resistance early during yesterday’s trading session but soon gave up all the gains and dropped lower.

Technical Outlook

We can consider yesterday’s move above 1.2480 a false break, so the zone will still act as resistance in the future. The bounce lower brought the pair below the 50 period Exponential Moving Average and now we can expect a touch of 1.2325. It must be noted that the Moving Average is flat, without clear direction and the pair is still in range mode until it clearly moves above 1.2480 or below 1.2325.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases so the pair’s direction will be decided by the U.S. data mentioned earlier and by the technical aspect.

GDMFX

FOREX NEWS: ADP NON-FARM EMPLOYMENT DATA TO REVEAL THE DOLLAR’S NEXT MOVE

EUR/USD

Forex News: Despite the multitude of economic indicators released yesterday, the pair remained relatively unfazed and stayed between support and resistance for the entire day.

Technical Outlook

Price touched the support at 1.0570 and quickly bounced to the upside, touching the 50 period Exponential Moving Average. This leaves us with a bounce-or-break scenario where the 50 EMA plays the biggest role: a break would signify a short term victory for the bulls and would make 1.0650 the first target for the day, while a bounce lower will test 1.0570 support again. The next targets would become 1.0700 zone and 1.0525 but we don’t expect a break of either one unless surprises occur.

Fundamental Outlook

At 10:00 am GMT we take another look at European inflation with the release of the Eurozone Flash Estimate Consumer Price Index (CPI). The indicator is the main gauge of inflation and can bring Euro strength if it posts a reading above the forecast 0.6%.

Later in the day, at 1:15 pm GMT the ADP Non-Farm Employment Change comes out, showing changes in the number of employed people in the U.S., excluding the farming sector and government. The indicator is less important than the Non-Farm Payrolls released Friday but nonetheless, higher numbers than the anticipated 161K can strengthen the US Dollar.

GBP/USD

Price action was mostly dominated by the bulls yesterday and the pair moved above the 50 period Exponential Moving Average but for the time being, the ranging period is still not over.

Technical Outlook

The pair moved above the 50 period EMA and above the resistance at 1.2480 but as seen a day before, price had similar behaviour and then reversed to the downside. This means that we still don’t consider 1.2480 broken and we don’t exclude the possibility of another fall through the Moving Average. The pair’s direction remains uncertain and range-bound trading is still in play.

Fundamental Outlook

The British Bank Stress Test results are revealed today and this may have an impact on the Pound but may also go mostly unnoticed. During these tests, synthetic market conditions are applied to large banks to determine their financial stability and potential risks; the time of the release is 7:00 am GMT.

GDMFX

FOREX NEWS: US DOLLAR BOOSTED BY JOBS DATA, SUPPORT TARGETED

EUR/USD

Forex News: American jobs data released yesterday showed a reading of 216K, surprisingly better than the anticipated 161K and this contributed to a bounce lower after touching resistance.

Technical Outlook

It seems like the resistance at 1.0650 is still a barrier too strong for the bulls to break and we anticipate a move that will initially reach the support at 1.0570. A possible break of this level will trigger another test of 1.0525 but price action is choppy lately so we don’t exclude another surprise climb. As long as the pair is trading below resistance and below the 50 period Exponential Moving Average, we favour the short side.

Fundamental Outlook

Today’s most notable release is the U.S. Manufacturing PMI, a survey of purchasing managers that asks respondents to give their opinion on the health of the manufacturing sector. Usually a higher reading is beneficial for the US Dollar but the impact if sometimes mild, especially if the actual number matches the forecast. The time of release is 3:00 pm GMT and the expected value is 52.1.


GBP/USD

The pair moved again above the resistance around 1.2480 but the bulls failed to capitalize and price dropped below the level, just how it did a day before. Price action remained choppy, with reversals on the lower time frames.

Technical Outlook

The fact that yesterday’s bullish breakout was false and price returned inside the channel, confirms that the ranging period is still not over and that we will see more of the choppy movement experienced during the previous days. The 50 period Exponential Moving Average is almost flat, confirming that the pair lacks a clear bias. We recommend caution until a direction becomes clearer.

Fundamental Outlook

At 9:30 am GMT the British Manufacturing PMI is released and anticipated to show a value of 54.4, almost identical to the previous 54.3. Similar to the U.S. indicator with the same name, this survey measures optimism among purchasing managers and can strengthen the Pound if it posts higher than anticipated readings.

GDMFX

FOREX NEWS: NFP TO MAKE-OR-BREAK US DOLLAR’S TREND?

EUR/USD

Forex News: Yesterday the pair remained between support and resistance and this goes to show that both sides are reluctant to commit to a clear direction. In the afternoon the U.S. Manufacturing PMI posted a better than expected value and this brought limited greenback strength.

Technical Outlook

The support at 1.0570 rejected price higher but bullish momentum stopped at the 50 period Exponential Moving Average. This is typical behaviour for a ranging market so our view is mostly neutral until 1.0570 support or 1.0650 resistance is broken decisively. However, the pair is in a downtrend from a longer term perspective so we slightly favour the short side but keep in mind that today’s U.S. jobs data will overshadow the technical aspect.

Fundamental Outlook

The most important U.S. employment data of the month comes out today at 1:30 pm GMT: the Non-Farm Payrolls (also known as Non-Farm Employment Change). The indicator tracks changes in the number of employed people, excluding the farming industry and usually generates very strong movement but the pair is prone to sudden changes of direction, observed better on the lower time frames. A higher change than the forecast 165K usually benefits the US Dollar and brings the pair lower.


GBP/USD

The pair finally broke out of the horizontal channel yesterday and the bulls managed to drive it into the next resistance. The move was mostly based on Pound strength, not necessarily Dollar weakness.

Technical Outlook

The resistance around 1.2480 is now clearly broken but we can see rejection at the next resistance, located at 1.2675. The Relative Strength Index and the Stochastic are now both overbought due to the long distance travelled yesterday and this combined with the long upper wick of the latest candle, suggests that a bounce lower is next. If the current resistance is surpassed, we expect the bounce to occur around 1.2770.

Fundamental Outlook

The main event will definitely be the release of the U.S. Non-Farm Payrolls but on the Pound side it’s worth mentioning the release of the Construction PMI, scheduled at 9:30 am GMT and expected to show a reading of 52.3. Usually a higher reading indicates optimism but the impact is low if the actual number matches the forecast.

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

GDMFX

FOREX NEWS: US DOLLAR SUFFERS TEMPORARY WEAKNESS

EUR/USD

The Non-Farm Payrolls numbers came out very close to estimates Friday but the previous value was revised from 161K to 147K. It’s not uncommon for this to happen but when the number is revised lower, usually the US Dollar has to suffer.

Technical Outlook

Price action remained choppy but had a bullish bias due to US Dollar weakness generated by the NFP revision. It looks like 1.0650 is now clearly broken and the pair is trading above the 50 period Exponential Moving Average, so the short term picture is bullish but not in a definitive manner. If today price remains above the 50 EMA, we expect a touch of 1.0710.

Fundamental Outlook

The Eurogroup Meetings take place today and may generate some volatility but this will be limited unless surprising discussions take place. The Meetings are closed to the press but a formal statement is released at the end of the day; sometimes participants talk to the press during the day.

At 3:00 pm GMT the U.S. Non-Manufacturing PMI comes out, with a forecast reading of 55.3. This is a survey of purchasing managers from outside the manufacturing sector and usually has a mild impact on the US Dollar, with higher numbers strengthening it.


GBP/USD

Friday the Pound had another great day, gaining against the US Dollar and breaking another resistance level. The bias is bullish but the oscillators are overbought.

Technical Outlook

Friday’s climb took both oscillators in overbought territory and this makes us anticipate a minor pullback before 1.2770 is hit. The previous resistance at 1.2675 may turn into support and reject price higher; if this is the case, the chances of a push into 1.2770 will increase. A more important level is located at 1.2855 but we don’t expect it to be reached today.

Fundamental Outlook

The British Services PMI is released today at 9:30 am GMT and is the only notable Pound affecting indicator. The expected value is 54.2 and higher numbers can strengthen the currency because the survey acts a measure of optimism focused of course on the Services sector.

GDMFX

FOREX NEWS: GREENBACK CONTINUES TO LOSE. OVERSOLD OSCILLATORS WARN OF RETRACEMENTS

EUR/USD

Forex news: The week opened lower but the gap was soon closed and the pair broke resistance. The move was mostly generated by the Italian Constitution Amendment Vote.

Technical Outlook

The break of 1.0710 opens the door for an extended move into the resistance at 1.0800, which is both a psychological level and a technical level better seen on the Daily chart. However, we are not dealing with an uptrend yet so the possibility of a drop must not be overlooked. When the Relative Strength Index and Stochastic become overbought, we anticipate bearish pullbacks that will probably confirm 1.0710 as support. If this level doesn’t become support, we anticipate a drop below 1.0650.

Fundamental Outlook

The ECOFIN Meetings take place today, attended by Finance Ministers from the EU member states. The event often goes unnoticed but caution should be used because surprises can always happen.

On the US Dollar side we have the Factory Orders, released at 3:00 pm GMT but this is an indicator with a medium-to-low impact on the greenback so we don’t expect sharp moves. A higher change than the anticipated 2.5% shows an increase in production and usually strengthens the US Dollar.


GBP/USD

The pair had similar behaviour to the EUR/USD, opening with a gap lower and then climbing above the point where the gap originated. Most of yesterday’s trading session was choppy but with a bullish bias.

Technical Outlook

For a second time in a short while both oscillators are moving in overbought territory and this calls for a retracement to the downside. It is very likely to see a touch of 1.2770 resistance and then a drop lower but we don’t exclude the possibility of such a move occurring before that level is reached. After this potential retracement, we expect the bullish momentum to resume and 1.2770 to be broken.

Fundamental Outlook

The British economic calendar is light today, without any major announcements so the pair’s direction will be mostly influenced by the technical side.

GDMFX

FOREX NEWS: RESISTANCE HOLDS STRONG AS BEARISH PRESSURE MOUNTS

EUR/USD

The first part of yesterday’s trading session belonged to the bulls, who took price into 1.0800 zone; however, the pair lost steam and bounced lower once the barrier was hit.

Technical Outlook

The pair bounced lower immediately after hitting 1.0800 resistance and now we can expect the bearish move to extend into 1.0710 which may turn into support. If this level is breached, we expect a touch of the 50 period Exponential Moving Average but as long as price remains above this dynamic support, the picture is bullish and the probability of another encounter with 1.0800 is high.

Fundamental Outlook

Today’s price direction will be mostly decided by the technical aspect because the United States and Europe don’t release any major economic indicators so we have a lacklustre fundamental scene for both currencies.


GBP/USD

The pair continued its climb yesterday and reached the resistance at 1.2770 but now bearish pressure has increased and a retracement is in the making.

Technical Outlook

The control currently belongs to the bulls but the resistance located at 1.2770, combined with the overbought condition of the Stochastic and Relative Strength Index will most likely generate a move lower that is likely to touch 1.2675. If this level will turn into support and price will bounce off of it, then we can expect a break of 1.2770 and a consequent move into 1.2855, which is a level best seen on a Daily chart. These moves will probably happen over the course of several days.

Fundamental Outlook

The British Manufacturing Production numbers are released at 9:30 am GMT and this will be the main market mover for the Pound. The indicator tracks changes in the total value of goods produced by manufacturers and usually, higher numbers strengthen the currency because they indicate increased economic activity; the forecast is 0.2%, while the previous was 0.6%.

GDMFX

FOREX NEWS: EURO STEALS THE SPOTLIGHT. ALL EYES ON ECB PRESS CONFERENCE

EUR/USD

Yesterday the pair slowed down but it is clear now that 1.0710 has become support and until that changes, the bias is bullish. The fundamental scene was quiet and this contributed to a slow session.

Technical Outlook

The 50 period Exponential Moving Average is angled upwards and the level at 1.0710 is confirmed as support so the short term bias is bullish and we anticipate a touch of 1.0800. If the mentioned support is broken, we can expect the 50 EMA to push price higher but a break of this barrier would suggest a reversal to the downside. Price direction will be heavily influenced by the ECB Rate announcement and Mario Draghi’s press conference so we recommend caution as the technical side will be secondary.

Fundamental Outlook

At 12:45 pm GMT the European Central Bank will announce their decision regarding the interest rate and although no change is expected from the current 0.00%, the event usually generates volatility. However, the pair may be unwilling to choose a direction until the ECB Press Conference takes place, 45 minutes later, at 1:30 pm GMT. During this conference, ECB President Mario Draghi will answer journalists’ questions and will talk about the reasons that determined the rate decision. It’s possible for him to offer hints about future monetary policy and if this is the case, the Euro will respond accordingly.


GBP/USD

British Manufacturing Production disappointed, as shown by yesterday’s numbers (forecast 0.2%, actual -0.9%) and this affected the Pound negatively, allowing the pair to drop into the 50 period Exponential Moving Average.

Technical Outlook

After the perfect bounce at 1.2770, price moved below 1.2675 and is now testing the 50 period EMA on the four-hour chart. It’s not yet clear whether the bears can break it or not but if they do, we expect to see more downside movement, with 1.2480 – 1.2500 zone as first target. Even if price reaches this zone, we don’t expect it to travel in a straight line (we’ll probably see bullish bounces until it reaches support). On the other hand, a quick move above the 50 EMA will make 1.2770 the target once again.

Fundamental Outlook

The United Kingdom didn’t prepare any special economic releases for today, thus price direction will be decided mainly by the technical aspect.

GDMFX

FOREX NEWS: EURO ON THE RETREAT ON THE BACK OF DOVISH DRAGHI COMMENTS

EUR/USD

As expected the ECB maintained the rate unchanged but during the ECB press conference that followed, the Euro started to weaken on the back of Mario Draghi’s comments that were perceived as dovish by the market.

Technical Outlook

The Euro took a hit yesterday and after a short lived move to the upside, the pair started to drop and broke through several support levels. The 50 period Exponential Moving Average is also clearly broken and the medium term bias is once again bearish as long as price remains below this technical indicator. We expect another encounter with 1.0570 and possibly 1.0525 but keep in mind that sometimes after a strong move to one side (like the one seen yesterday), a retracement soon follows.

Fundamental Outlook

Only one important economic release made it to today’s headlines: the University of Michigan Consumer Sentiment. This is a survey that tries to gauge the confidence of consumers in current economic conditions and usually a higher number indicates that in the future consumer spending will increase. This often strengthens the US Dollar so we may see further downside action for the pair if the actual number will be above the forecast 94.3; the time of release is 3:00 pm GMT.


GBP/USD

Yesterday the US Dollar made a nice comeback against the Pound after a bounce round 1.2675 which is now confirmed resistance. Bearish pressure mounts but the Moving Average is not yet broken decisively.

Technical Outlook

After a climb early during yesterday’s session, the pair dropped to test the 50 period Exponential Moving Average and although at the time of writing price is below it, we cannot yet consider it a true break. If the pair remains below this technical indicator, we expect to finish the week on a bearish note, with price approaching 1.2480 – 1.2500 but we don’t expect this target to be hit today. A quick return above the 50 EMA will make 1.2675 the first target.

Fundamental Outlook

Price action today will be mainly driven by the U.S. Consumer survey and by the technical aspect because the United Kingdom didn’t schedule major news releases.

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

GDMFX

FOREX NEWS: KEY SUPPORT LEVELS THREATENED AGAIN, OSCILLATORS APPROACH OVERSOLD

EUR/USD

Forex News: Friday the pair continued the bearish momentum started a day earlier and the US Dollar continued to strengthen against the Euro. Part of the Dollar’s good performance was due to a better than expected Consumer Sentiment survey (forecast 94.3, actual 98.0).

Technical Outlook

Although lately the bears have been in control, the key support at 1.0525 is not broken, the Stochastic is oversold and the Relative Strength Index is very close to its 30 level (which indicates oversold). These factors increase the chance of a bounce higher but as long as the pair is trading below the 50 period Exponential Moving Average, our bias is bearish. If 1.0525 is broken the pair will test 1.0460, which is the lowest price reached since early 2015.

Fundamental Outlook

We don’t have any major releases on today’s economic calendar, thus the main focus will be on the technical aspect. After last week’s strong movement, it’s likely to see a slow, ranging trading session.


GBP/USD

The Pound-Dollar pair had a choppy session Friday and an early climb was soon reversed by the 50 period Exponential Moving Average. The day ended close to where it started and no major advances were made.

Technical Outlook

Bullish price action found resistance at the 50 period Moving Average but the bearish bounce didn’t continue through Thursday’s low and now the pair is trading without a clear direction. The most part of last week was controlled by the bears and if they can maintain control we will likely see a move closer to 1.2480 – 1.2500 but we don’t expect this target to be reached today. A clean break of the 50 EMA would make 1.2675 the first target.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected by major economic indicators today, thus the technical side will be the main market mover.

GDMFX

FOREX NEWS: US DOLLAR SHOWS TEMPORARY WEAKNESS, AHEAD OF BRITISH INFLATION DATA

EUR/USD

Forex News: The pair found once again strong support at 1.0525 and bounced higher, generating a bullish trading session yesterday. There were no major news releases so price direction was mostly driven by the technical aspect.

Technical Outlook

Lately the level at 1.0570 doesn’t seem to have a lot of importance for price and as we can see it was breached twice without any struggle. However, 1.0525 remains a key support, while to the upside the first barrier is represented by the 50 period Exponential Moving Average. Today we expect to see an encounter with this dynamic resistance and with the level at 1.0650; if that resistance zone cannot be broken, we expect to see another move to test 1.0525, otherwise the pair is headed for 1.0710 again but we favour the short side as long as price is trading below the 50 EMA.

Fundamental Outlook

The German ZEW Economic Sentiment Survey is today’s main release, scheduled at 10:00 am GMT and expected to increase to 14.2 from the previous 13.8. This is a survey of about 275 German professional investors and analysts and acts as a leading indicator of economic health focused on the respondents’ 6-month outlook. Higher numbers show optimism and usually strengthen the Euro but the impact is not always very strong.


GBP/USD

The US Dollar had a slow start of the week against the Pound and the pair moved back above the 50 period Exponential Moving Average on the four-hour chart. The picture is once again blurry and the pair may be entering another ranging period if a breakout is not registered soon.

Technical Outlook

The pair is testing 1.2675 again, with both oscillators showing good upside momentum and this increases the chance of a bullish break of said level. If this is the case, we expect to see a continued move to the upside during the days to come, but if price bounces lower here, the 50 period Exponential Moving Average will become the first target for today. If the moving average is broken, the next destination may be the recent low at 1.2550, which will act as support.

Fundamental Outlook

The British Consumer Price Index is today’s highlight for the Pound. The indicator is the main gauge of inflation and usually has a high impact on the currency, with higher numbers strengthening it. The time of the release is 9:30 am GMT and the expected change is 1.1% (previous 0.9%).