Technical News|Gdmfx Brokerage|Daily

GDMFX

FOREX NEWS: TO HIKE OR NOT TO HIKE? BUCKLE UP FOR MASSIVE MOVES

EUR/USD

Forex News: The pair had a choppy session yesterday, without a clear direction and without much movement. The German ZEW survey disappointed and this initially weakened the Euro to a limited extent but the losses were soon erased.

Technical Outlook

Price is still struggling to break the 50 period Exponential Moving Average and the resistance at 1.0650 and control doesn’t clearly belong to either side. This type of behaviour is likely to continue today until the Fed announce their rate decision and the technical aspect will be secondary. The levels to watch are 1.0650 (current resistance), 1.0700 and 1.0525; be prepared for irregular movement and increased volatility.

Fundamental Outlook

Today is a crucial day for the US Dollar as the Fed will announce their decision on the interest rate. The forecast is an increase to <0.75% from the current <0.50% and if it comes true, we can expect to see massive US Dollar strength and increased volatility. The FOMC Statement is released at 7:00 pm GMT and will contain the outcome of the rate decision as well as insights into the reasons that determined it.

Half an hour later, at 7:30 pm GMT, Fed Chair Janet Yellen will hold a press conference during which she will answer journalists’ questions and will offer more details about monetary policy. The entire cluster of events will probably create irregular movement so we recommend caution until things calm down.


GBP/USD

British inflation improved as shown by yesterday’s CPI release (actual 1.2%, expected 1.1%) and this strengthened the Pound, taking the pair above resistance.

Technical Outlook

The resistance at 1.2675 is now broken so we can expect to see a move closer to 1.2770 but in case price drops through the recently broken level, we will likely see an encounter with the 50 period Exponential Moving Average. The Stochastic is overbought and this increases the chances of a move lower but it is not a clear indication that price will drop today. Keep in mind that the Fed Meeting will have a strong impact on the US Dollar and thus on the pair.

Fundamental Outlook

At 9:30 am GMT the British Claimant Count is released, showing changes in the number of people who asked for unemployment related help. The indicator acts as a measure health for the UK jobs market that can strengthen the Pound if it posts a lower number than the forecast 6.2K. Later in the afternoon the pair will be heavily influenced by the Fed Meeting.

GDMFX

FOREX NEWS: FED HIKES AND DOLLAR STRENGTHENS. BUT FOR HOW LONG?

EUR/USD

Forex News: Ahead of the Fed release the pair moved almost completely sideways, as most traders were waiting for the announcement. The Fed decided towards a raise to <0.75% and also mentioned that 3 more hikes should be expected during 2017; the US Dollar responded by strengthening and the pair slipped lower, touching support.

Technical Outlook

The resistance at 1.0650 and the 50 period Exponential Moving Average continued to reject rising price and now the pair is testing the support at 1.0570. If this level can be broken, we expect to see a drop into 1.0525 and even lower, towards 1.0460. The US Dollar is surrounded by a positive sentiment and will likely continue to strengthen during the days to come but at the moment, the pair’s direction is still not clear so we cannot exclude a sudden move up.

Fundamental Outlook

Today at 1:30 pm GMT we take a look at U.S. inflation with the release of the Consumer Price Index. Under normal circumstances, a higher change than the forecast 0.2% strengthens the US Dollar but given yesterday’s events, we may get a mixed reaction from this release.


GBP/USD

The British Claimant Count Change showed that less people applied for unemployment related benefits last month and this strengthened the Pound early during yesterday’s session. However, the Fed rate hike nullified all the gains and took the pair below the 50 period EMA.

Technical Outlook

The latest impulse is bearish and the US Dollar is gaining against most of its counterparts, so we anticipate a touch of 1.2550 in the short term and possibly a move below 1.2480 during the days to come. However, if the pair will reverse and move above the 50 period Exponential Moving Average, this scenario will be invalidated and 1.2675 will become the first bullish target.

Fundamental Outlook

The first release of the day for the Pound is scheduled at 9:30 am GMT in the form of the British Retail Sales. This type of sales represents a major part of the entire consumer spending and a higher number shows increased economic activity; the forecast is a change of 0.2% and usually numbers above it strengthen the currency.

At 12:00 pm GMT the Bank of England will announce the interest rate (no change expected from the current 0.25%) and will release a Monetary Policy Summary that contains details about the reasons that influenced the rate decision. More importantly, the Summary may contain hints about future rate changes and if that’s the case, we expect the Pound to react strongly.

GDMFX

FOREX NEWS: US DOLLAR IN TOTAL CONTROL. SMALL PULLBACKS ANTICIPATED

EUR/USD

Forex News: U.S inflation numbers that came out yesterday matched analysts’ expectations (0.2% change) so the release didn’t have a strong impact but the pair continued to descend yesterday, mostly due to the Fed hike.

Technical Outlook

The pair broke 1.0460, which was the lowest point reached since 2015 so now we could say we are in uncharted waters because the current level was last seen in 2003. The bears are in clear control and we expect further downside movement in the medium term but the oscillators have reached oversold and price travelled a long distance without a retracement. The level at 1.0460 may act as resistance for such a pullback but overall we expect price to move lower.

Fundamental Outlook

At 10:00 am GMT the Eurozone Final CPI is released, showing changes in the price paid by consumers for the goods and services they purchase. The indicator acts as a measure of inflation but the Final version is the least important; nonetheless, higher numbers than the forecast 0.6% can strengthen the Euro but to a limited extent considering the current situation.

On the US Dollar side we have the U.S. Building Permits, released at 1:30 pm GMT and expected to show 1.24M, slightly lower than the previous 1.26M. The indicator is a measure of activity in the housing sector and higher numbers can strengthen the currency but the impact is usually mild.


GBP/USD

The Bank of England kept the rate unchanged and the British Retail Sales matched the forecast so the Pound wasn’t much affected. The US Dollar continued to strengthen and the day ended significantly lower.

Technical Outlook

The huge drop seen over the last couple of days is likely to continue until 1.2385 support is touched but we may see a retracement higher soon, due to the overextended condition of price. The oscillators have entered oversold and warn of such a possible pullback but after this move is completed, we expect the pair to continue lower.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today but the pair will be directly affected by the U.S. Building Permits.

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

GDMFX

FOREX NEWS: BUYERS FIGHT BACK, US DOLLAR STILL HYPED BY FED BOOST

EUR/USD

Forex News: The pair retraced higher Friday but movement was slower compared to the previous days. The bears are in control but an extended move up is not out of the question.

Technical Outlook

After hitting the low at 1.0366 price moved higher to test the recently broken support at 1.0460 but for now it looks like the level is holding and may turn into resistance. If this is the case, we expect to see another drop closer to 1.0366 but a move above 1.0460 will open the door for a touch of 1.0525. However, as long as the pair is trading below 1.0525 and the 50 period Exponential Moving Average, our bias is bearish.

Fundamental Outlook

Today’s highlight is the release of the German IFO Business Climate, a survey of about 7,000 businesses that tries to gauge the optimism of respondents regarding a 6 month outlook on economic conditions. The time of the release is 9:00 am GMT and the expected value is 110.7, slightly higher than the previous 110.4.


GBP/USD

Friday was a better day for the Pound, which strengthened against the greenback after an almost perfect bounce at support. The economic calendar was light so the bounce can be mostly attributed to the technical side.

Technical Outlook

It looks like the pair has found good support at 1.2385 as seen from Friday’s price action, so we can expect this level to be of importance for future direction. Currently the pair is testing 1.2480 zone but rejection is present as shown by the long wick of the penultimate four-hour candle; also, the US Dollar is still strengthening so it’s very likely to see a resumption of the bearish movement from this level. As an alternate scenario, a clear break of 1.2480 will probably take price closer to the 50 EMA and the level at 1.2550.

Fundamental Outlook

The economic calendar is empty today for the Pound, so the technical aspect will be the deciding factor for the pair’s direction.

GDMFX

FOREX NEWS: DOWNTREND STAGGERS, RANGE-BOUND TRADING AHEAD

EUR/USD

Forex News: The bulls didn’t manage to take the pair above resistance yesterday, although the German IFO Business Climate posted a higher reading than analysts had anticipated. The release created just a brief moment of upside movement and soon after, price took a downwards direction.

Technical Outlook

So far the resistance at 1.0460 is holding and seems to reject price lower so we anticipate another encounter with the low at 1.0366. However, it’s possible to see the start of a ranging period, with price moving above and below 1.0460 without a clear direction. The week lacks major economic releases and Christmas is approaching so we may enter a period of irregular volatility but as long as the pair is trading below the 50 period Exponential Moving Average, we favour the short side.

Fundamental Outlook

The German Producer Price Index is scheduled for release today at 7:00 am GMT and expected to show a change of 0.1% from the previous 0.7%. The indicator usually has a low impact but higher numbers are beneficial for the currency and this is the only notable indicator of the day.


GBP/USD

The bears controlled most of yesterday’s trading session after a bounce at resistance. The move was mostly technical because the economic calendar lacked any major releases.

Technical Outlook

The resistance zone around 1.2500 capped upside movement yesterday and now it appears like 1.2385 is broken. This support is important for short term price action, so of the bears can keep the pair below it, we expect to see a move into 1.2325 (1.2300), possibly during today’s session. A quick move above the current level will make the next direction uncertain and will probably trigger ranging movement.

Fundamental Outlook

The Pound has another lacklustre day from a fundamental standpoint as no major releases are scheduled. This will likely contribute to slow, ranging movement.

GDMFX

FOREX NEWS: OVEREXTENDED MOVES CALL FOR BULLISH PULLBACKS

EUR/USD

Forex News: The German Producer Price Index released yesterday showed a slightly better than anticipated value but this didn’t do much for an already weak Euro. The pair continued its descent and pierced the low at 1.0366.

Technical Outlook

The main direction is south but the pair is likely to retrace higher before 1.0366 support can be broken decisively. Yesterday price breached the mentioned support but this is by no means a true break yet and it must be noted that the Relative Strength Index as well as the Stochastic are approaching oversold, thus increasing the chances of a pullback north. Price action may be irregular today and the rest of the week, due to the approaching of Christmas and the lack of major economic releases.

Fundamental Outlook

The only notable indicator of the day is released at 3:00 pm GMT: the U.S. Existing Home Sales. The indicator shows the annualized number of previously owned houses (not new construction) that were sold during the previous month and a higher reading usually shows increased economic activity and a healthy house market. The forecast is 5.52M while the previous value was 5.60M.


GBP/USD

The US Dollar continued its assault on the Pound yesterday and the pair dropped to touch the next support. The economic calendar was light so the fundamental side didn’t have a major impact.

Technical Outlook

The support around 1.2325 – 1.2300 is strong and although the main direction is down, we may see a bullish pullback from this area. The situation is similar to the EUR/USD, with both oscillators approaching oversold and price near support, so it’s possible for the pair to continue to move south but the extent should be limited before a retracement occurs.

Fundamental Outlook

The United Kingdom didn’t schedule any notable news releases so the technical side will be the main market mover.

GDMFX

FOREX NEWS: SUPPORT HOLDS, DOWNTREND STILL INTACT AHEAD OF U.S. GDP

EUR/USD

Forex News: The U.S. Existing Home Sales posted yesterday a higher number than analysts’ expectations but the release didn’t have the strength to drive the pair lower and instead a bullish retracement occurred.

Technical Outlook

The retracement was expected and so far it’s not a reason of concern for the downtrend but it’s very likely to see an encounter with 1.0460 which may turn into resistance. If the level is breached, the pair will touch the 50 period Exponential Moving Average and we expect it to reverse lower unless the US Dollar will be weakened by the economic data released throughout the day. To the downside 1.0366 zone remains strong support, while to the upside we don’t expect the pair to surpass 1.0525.

Fundamental Outlook

Today is probably the busiest day of the week, with two important releases, both scheduled at 1:30 pm GMT: the CORE Durable Goods Orders and the U.S. Gross Domestic Product (Final version). The first is a leading indicator of production that shows changes in orders placed for goods with a life expectancy of at least 3 years, excluding transportation items (expected change 0.2%, previous 0.8%). The GDP is the main gauge of economic performance but the Final version is the least important, so we don’t expect huge volatility at the release; nonetheless, higher values for these indicators usually bring US Dollar strength.


GBP/USD

Yesterday after another encounter with support, the pair jumped higher to test the resistance at 1.2385, showing choppy price action and no clear direction.

Technical Outlook

During the recent period the pair has touched 1.2325 support twice and both times it moved higher, reaching resistance. Until a clear break happens, the pair is likely to stay in range mode, bouncing between support and resistance. The downtrend is still present and the US Dollar is still strong but this doesn’t exclude a move above 1.2385 before bearish action can resume.

Fundamental Outlook

The economic calendar for the Pound is light so the U.S. releases will be the main price mover, as well as the technical aspect.

GDMFX

FOREX NEWS: CHRISTMAS APPROACHES, CHOPPY PRICE ACTION EXPECTED

EUR/USD

Forex News: Both U.S. Indicators released yesterday posted better than expected readings but despite this, the pair continued slowly higher, reaching resistance.

Technical Outlook

The pair is testing the resistance level at 1.0460, in very close vicinity of the 50 period Exponential Moving Average. These two types of resistance (horizontal and dynamic, respectively) represent a confluence zone that will be tough to break by the buyers but on the other hand, a break would show bullish strength, indicating that price is likely to extend higher. The next target and possible barrier is located at 1.0525, while to the downside, 1.0366 remains a key level.

Fundamental Outlook

The U.S. New Home Sales numbers are released today at 3:00 pm GMT and this will be the only notable indicator of the day. The forecast is 575K and values above this number show increased activity on the house market; usually this strengthens the US Dollar but to a limited extent. The approaching of Christmas will probably trigger irregular volatility and choppy price action, thus caution is recommended.


GBP/USD

The pair slid lower yesterday and touched the support at 1.2325 once again in a short while. It’s safe to say that until support or resistance is broken, the pair will be in range mode.

Technical Outlook

The bears are struggling to break the support zone around 1.2325 but the move lacks steam and the Relative Strength Index has been moving very close to its oversold level for a long time. This increases the chances of a bullish bounce from the current level but the pair is trapped between 1.2385 resistance and 1.2325 support so we consider it in range mode until it moves outside the mentioned levels.

Fundamental Outlook

The Pound will be affected by the release of the Current Account and the British GDP, both scheduled at 9:30 am GMT. The Current Account shows the difference in value between imports and exports (expected to show -28.3B), while the GDP is the main gauge of an economy’s performance (forecast 0.5%) and higher values for these indicators usually strengthen the Pound.

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

GDMFX

FOREX NEWS: LOW VOLUME, IRREGULAR PRICE ACTION AS THE WINTER HOLIDAYS TAKE OVER

EUR/USD

Forex News: Friday the pair moved slightly higher but didn’t break the 50 period Exponential Moving Average and price action was choppy, which is normal before Christmas when trading volume starts to dim.

Technical Outlook

The 50 period EMA is still preventing the pair from going higher and 1.0460 resistance is still intact. This means that we are dealing with a ‘bounce or break’ scenario where a bounce would take price closer to 1.0366 and a break would make 1.0525 the first target but many countries celebrate the Winter Holidays, so liquidity, volume and price action in general will be affected. Our bias is neutral and we recommend caution.

Fundamental Outlook

German banks are closed today in observance of Boxing Day and Italian banks are closed due to St. Stephen’s Day. Also US banks are closed, celebrating Christmas Day so we expect a day without much movement and probably irregular price action.


GBP/USD

Although the Pound benefited from positive economic data released Friday, the pair descended during the first part of the day but bounced at support and erased most of the earlier losses.

Technical Outlook

The Relative Strength Index and Stochastic are exiting oversold territory and this favours an extended move up that may have 1.2325 as destination. The level at 1.2250 is still considered support although it was breached Friday, so we may see another attempt to break it during the days to come. For today our view is neutral considering that volume and volatility will be affected by the Winter Holidays.

Fundamental Outlook

UK banks are closed today in observance of Boxing Day and no economic indicators are released. We recommend caution because price behaviour will be uncertain.

GDMFX

FOREX NEWS: ACTION RESUMES, VOLUME STILL AFFECTED BY WINTER HOLIDAYS

EUR/USD

Forex News: As expected, the pair reached a stalemate yesterday and no major developments took place, due to the Winter Holidays.

Technical Outlook

Price is flat and yesterday’s trading session doesn’t hold any information about future direction. We expect the pair to continue with its irregular movement and volume will still be affected. Our bias is neutral and we recommend caution.

Fundamental Outlook

At 3:00 pm GMT the U.S. Consumer Confidence survey is released, showing the opinions of 5,000 households about current and future economic conditions. The expected figure is 108.9 and usually, higher numbers strengthen the US Dollar, but given the current low volume, we don’t know what the exact impact will be.


GBP/USD

There wasn’t much action yesterday and the pair remained between support and resistance, with little to no volume.

Technical Outlook

Given the current situation, our bias is neutral until volume returns to normal or at least until action picks up. The pair is in a downtrend that seems overextended so we expect some sort of retracement sooner rather than later. The levels to watch remain 1.2250 as support and 1.2325 as resistance.

Fundamental Outlook

UK banks will be closed, celebrating Christmas Day and no economic indicators will be released. We recommend caution because price action will still be affected.

GDMFX

FOREX NEWS: MARKETS IN INDECISION MODE AS END OF YEAR APPROACHES

EUR/USD

Forex News: Throughout yesterday’s trading session the pair remained in a very tight range, with almost flat price action. The U.S. Consumer Confidence survey showed a better than anticipated value but this didn’t have a strong impact on the US Dollar.

Technical Outlook

The pair is still clearly affected by the Winter Holidays and is moving sideways, lacking any clear direction. Volume is still low and volatility can become irregular, meaning that price may jump to one direction or the other without warning. Caution is still recommended until a clear direction emerges; the levels to watch are 1.0460 as resistance and 1.0366 as support.

Fundamental Outlook

The U.S. Pending Home Sales are released today at 3:00 pm GMT and expected to show a change of 0.6% compared to the previous 0.1%. This is considered a medium impact indicator that shows changes in the number of homes under contract to be sold and usually a higher value strengthens the US Dollar but given the current low volume, its release may go mostly unnoticed.


GBP/USD

The bears took the pair lower yesterday and tested support once again but without a clear break. The picture is still blurry and the pair is in range mode.

Technical Outlook

The pair shows bearish pressure as price is trying to push below 1.2250 support but as mentioned before, the Relative Strength Index has been moving very close to oversold for a long while. This suggests that a bullish pullback is about to occur, but given the current low volume, we cannot anticipate when this will happen. Caution is still recommended.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases for today so the only highlight will be the U.S. indicator that comes out in the afternoon.

GDMFX

FOREX NEWS: DOWNTREND RESUMPTION OR END-OF-YEAR FAKE-OUT?

EUR/USD

Forex News: The pair picked up speed yesterday and dropped after a brief climb above resistance. The U.S. Pending Home Sales did not have a strong impact and price started to move lower before the release.

Technical Outlook

If the current bearish momentum continues, we are likely to see another attempt to break 1.0366 but keep in mind that lately the pair has been in ranging mode, so it’s very possible to see a quick reversal that will test the 50 period Exponential Moving Average again. The chances of a move up are increased by the Relative Strength Index approaching its 30 level and suggesting that the pair is becoming oversold again.

Fundamental Outlook

The only notable release of the day is the U.S. Unemployment Claims, scheduled at 1:30 pm GMT. The indicator tracks the number of people who asked for unemployment related benefits during the previous week but because it’s released weekly, its impact is not huge; however, a higher number than the forecast 277K can weaken the US Dollar because it may indicate a drop in consumer spending in the near future.


GBP/USD

Yesterday’s session belonged to the bears and the US Dollar strengthened against the Pound allowing the pair to drop below the support at 1.2250 which rejected price almost perfectly so far.

Technical Outlook

The support at 1.2250 acted as a key level over the last period and now it may turn into resistance for future price action. The Relative Strength Index is hugging its oversold level for a long while and this means that a retracement is about to occur; the first target for this potential move up is the mentioned level (1.2250), followed by the 50 EMA. Keep in mind that the pair is still in a downtrend but also that volume and volatility are not completely back to normal.

Fundamental Outlook

Same as the rest of the week, UK’s economic calendar is light so we expect price direction to be influenced mainly by the U.S. release mentioned above and by the technical aspect.

GDMFX

FOREX NEWS: LAST TRADING DAY OF 2016. IRREGULAR PRICE ACTION EXPECTED

EUR/USD

Forex News: Yesterday’s price action confirmed that the pair is in range mode and we saw a bounce near support. Most of the day was controlled by the bulls but resistance wasn’t clearly broken.

Technical Outlook

Price came very close to the support located at 1.0366 and bounced higher, into 1.0460 resistance without breaking it. This is typical behaviour for a ranging market and the fact that today is the last trading day of 2016 will contribute to irregular price behaviour. Our bias is neutral and we anticipate alternating periods of volatility, thus caution is recommended.

Fundamental Outlook

The economic calendar doesn’t hold any major indicators and price action will be mainly affected by end-of-year volatility.


GBP/USD

The pair retraced higher during the first part of yesterday’s trading session but a drop that erased most of the gains soon followed. The short term is clearly affected by the approaching of New Year’s Eve and the pair doesn’t have a clear direction.

Technical Outlook

Recent price action established 1.2200 as short term support and it seems like the zone around 1.2250 is now resistance. From a longer term perspective the pair is still in a downtrend that is in need of a stronger retracement and from a short term point of view, price is ranging. Volatility and direction today will be irregular and we recommend caution.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements today. We hope you had a profitable trading year and we wish you a better 2017.

GDMFX

FOREX NEWS: MARKETS IN LIMBO AS NEW YEAR CELEBRATIONS CONTINUE ACROSS THE GLOBE

EUR/USD

Forex News: Choppiness continued Friday after a strong move up that reached resistance and bounced lower immediately after touching it. Now the pair is trading above the 50 period Exponential Moving Average but no clear trend is in place.

Technical Outlook

Today we will get low volume and little to no movement. Most banks across the globe will be closed in celebration of the New Year and this will also contribute to the irregular price action; spreads may increase and although this is normal during such times, we recommend careful placement of Stop Loss orders and caution overall until things return to normal.

Fundamental Outlook

As expected, today no major indicators are released and on top of that, U.S. banks are closed in celebration of New Year’s Day. This means that volume will be affected and price may behave erratically.


GBP/USD

Friday price moved and remained above the 50 period Exponential Moving Average, completing a bullish retracement that was already anticipated for a while.

Technical Outlook

As long as the pair is trading above the 50 period Exponential Moving Average, we may see an extended move to the upside but from a longer term perspective, price is in a downtrend. It must be noted that the level at 1.2385 offered strong resistance and rejected price lower, so a move below the 50 EMA is not out of the question but liquidity will be thin today and this will probably generate choppy movement.

Fundamental Outlook

Banks in the United Kingdom will also be closed due to New Year’s Day, so price will probably lack a clear direction.

GDMFX

FOREX NEWS: VOLATILITY PICKS UP AS BANKS RE-OPEN AFTER NEW YEAR CELEBRATIONS

EUR/USD

Forex News: Yesterday’s trading session belonged to the bears and we saw the pair descend below 1.0525 and below the 50 period Exponential Moving Average. Some banks around the globe were closed due to New Year celebrations, so volume remained relatively low.

Technical Outlook

The move below the 50 period EMA seems fragile and 1.0460 may turn into support. If this is the case, we will probably see a bounce above the moving average and possibly another test of 1.0525 but it must be noted that conditions still haven’t returned to normal so we may get a choppy trading session, with sharp reversals and irregular price movement. As long as the pair is trading below the 50 EMA, our bias is slightly bearish.

Fundamental Outlook

At 1:00 pm GMT we take a first look at German inflation with the release of their Preliminary Consumer Price Index. The forecast is a 0.6% increase from the previous 0.1% and if this prediction comes true or of higher numbers are posted, the Euro is likely to strengthen against its counterparts.

Later in the day, at 3:00 pm GMT the U.S. Manufacturing PMI is released, showing the opinions of purchasing managers from the manufacturing sector regarding business conditions in said sector. Higher numbers than the forecast 53.7 show optimism and usually give a boost to the US Dollar but the impact is often limited if the actual number comes close to the forecast.


GBP/USD

The US Dollar strengthened against the Pound as well yesterday and the pair dropped below the 50 period Exponential Moving Average, completing a bearish but choppy trading session.

Technical Outlook

The current bearish impulse might extend into the support at 1.2250 but we don’t expect this move to complete during the course of one day unless surprising developments take place. The level at 1.2325 may turn into resistance but we don’t exclude the possibility of a move above it because the trading environment is still affected by the start of the New Year and liquidity is low. Caution is still recommended.

Fundamental Outlook

The British Manufacturing PMI is released today at 9:30 am GMT and is expected to show a value of 53.3, almost identical to the previous 53.4. This survey acts as a leading indicator of economic health, with higher numbers strengthening the Pound but usually the impact is mild if the actual number is close to analysts’ prediction.

GDMFX

FOREX NEWS: SUPPORT THREATENED, US DOLLAR IN CHARGE AHEAD OF FOMC MEETING MINUTES

EUR/USD

Forex News: The US Dollar won the battle against the Euro yesterday, boosted also by a better than expected Manufacturing PMI survey. Key support is threatened and seems like volume is back after the winter holidays.

Technical Outlook

The pair is currently testing the zone of support around 1.0366 and reached a low that was last seen in the year 2003. If the current support zone is broken decisively, price will be ‘free falling’ because there is no known support below this zone (the levels below are very old and we cannot anticipate how price will behave there). The Relative Strength Index and Stochastic are approaching oversold and this may call for bullish pullbacks.

Fundamental Outlook

Today’s highlight is the release of the FOMC Meeting Minutes, scheduled at 7:00 pm GMT. This document contains details about the latest Fed Meeting and may offer hints about future monetary policy (rate hikes more importantly); if this is the case, we will probably get a strong reaction from the greenback.


GBP/USD

The US Dollar scored a major victory against the Pound yesterday, taking the pair about 100 pips lower and reaching the support at 1.2200. British Manufacturing data was better than anticipated but this didn’t have a strong impact on price movement.

Technical Outlook

The support at 1.2200 is important for short term price action and we expect the pair to react to it by bouncing higher. A break of this level will open the door for a move into 1.2090, which is a key level, better seen on the Daily charts. The oscillators are still showing good downside momentum and this increases the chances of a break of 1.2200, while to the upside, 1.2250 is the first resistance.

Fundamental Outlook

At 9:30 am GMT the British Construction PMI is released and expected to show a value of 52.6 compared to the previous 52.8. This survey acts as a leading indicator of economic health focused on the construction sector but its impact is usually mild, with higher values strengthening the Pound.

GDMFX

FOREX NEWS: U.S. JOBS DATA IN THE FOCUS AS BEARISH PRESSURE MOUNTS

EUR/USD

Forex News: The pair bounced higher yesterday and moved above the 50 period Exponential Moving Average ahead of the FOMC Minutes release, which created some Dollar strength but nothing substantial. Overall the session belonged to the bulls but bearish pressure has increased.

Technical Outlook

The climb above the 50 period EMA and above the resistance at 1.0460 seems fragile and the risks of a drop have increased due to bearish pressure. If the buyers can keep the pair above these two elements, we expect price to test the level at 1.0525 but for now the picture is blurry and a clear direction is not in place. Because the pair is mostly ranging, look for direction changes at overbought/oversold levels or at support/resistance.

Fundamental Outlook

Today at 1:15 pm GMT we take a first look at the U.S. employment situation with the release of the ADP Non-Farm Employment Change. The indicator shows changes in the number of employed people, excluding government and the farming sector; usually the impact is lower than the Government data released Friday but nonetheless, higher numbers than the anticipated 171K (previous 216K) can strengthen the US Dollar.


GBP/USD

The level at 1.2200 offered good support and the pair bounced higher immediately after touching it. The US Dollar had a mixed reaction when the FOMC Minutes were released and now the pair is showing rejection around resistance.

Technical Outlook

After moving briefly above 1.2325 and above the 50 period Exponential Moving Average, the pair shows signs of rejection. Resistance is not yet broken, so if we will see today a move below the 50 EMA, it would mean that the bears are ready to take control again and this would make 1.2250 the next destination. To the upside the first target is 1.2385 if the pair moves above 1.2325 again.

Fundamental Outlook

The final British survey in this week’s series of three is released today at 9:30 am GMT: the Services Purchasing Managers’ Index. Just like the other two surveys, this one shows the level of optimism regarding business conditions as perceived by purchasing managers from the respective sector; values above the forecast 54.8 usually strengthen the Pound but the impact is medium most of the times.

GDMFX

FOREX NEWS: U.S. NON-FARM PAYROLLS: THE FIRST MAJOR RELEASE OF 2017

EUR/USD

Forex News: The pair had a mixed trading session yesterday, moving above and below the level at 1.0525, without a clear bias. The jobs data released yesterday by the United States came below expectations and this weakened the US Dollar to some extent.

Technical Outlook

The pair is still governed by indecision but the latest impulse is bullish and seems like price will be trading above the 50 period Exponential Moving Average for another day. The first important resistance is located around 1.0650 but it must be noted that the Stochastic has entered overbought and although this is not a short signal by itself, it’s something that may be of importance for future price action. Today’s technical aspect will be secondary to the fundamental and all eyes will be on the U.S. jobs data.

Fundamental Outlook

At 1:30 pm GMT the Non-Farm Payrolls will take centre stage and will influence the greenback heavily. This is considered the most important U.S. jobs data and almost always has a strong impact on the currency. The forecast is 175K (previous 178K) and higher numbers show that more jobs were created and that consumer spending and overall economic activity may increase in the near future; a higher number usually strengthens the US Dollar while a lower number weakens it.


GBP/USD

The US Dollar weakened yesterday and allowed the Pound to take the pair above resistance once again. The pair is also trading above the 50 period Exponential Moving Average and this makes our bias slightly bullish.

Technical Outlook

Yesterday the pair moved again below the 50 EMA and quickly bounced above it; this shows bearish weakness and suggests that we may see a move higher today. The first barrier and target is 1.2385 and if that level is taken out, we expect a move closer to 1.2480 during the days to come. Another quick move below the 50 EMA would make 1.2250 the first target.

Fundamental Outlook

The United Kingdom didn’t schedule major news announcements for today so the main focus will be on the U.S. Non-Farm Payrolls and on the technical aspect.

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

GDMFX

FOREX NEWS: US DOLLAR BOOSTED BY NFP REVISION, SUPPORT THREATENED

EUR/USD

Forex News: The U.S. Non-Farm Payrolls released Friday showed a lower number than analysts had expected but the previous value was revised higher and this boosted the US Dollar, creating a bearish move for the pair.

Technical Outlook

The current move down is likely to extend into the 50 period Exponential Moving Average, where a classic ‘bounce-or-break’ scenario will play out. If the pair goes through the Moving Average, it will show that the bullish run has come to an end and that we will see further downside during the days to come; on the other hand, a bounce will take the pair back into 1.0600 territory and would open the door for a continuation of the bullish impulse started last week.

Fundamental Outlook

At 9:30 am GMT the Sentix Investor Confidence survey comes out and it’s the day’s only notable indicator. The survey gauges the opinions of about 2,800 investors and analysts regarding a 6-month outlook for the Eurozone but usually has a low impact on the pair; nonetheless, higher numbers than the forecast 12.6 (previous 10.0) show optimism and can strengthen the Euro.


GBP/USD

The US Dollar erased Friday almost all of the losses incurred earlier during the week and took the pair below the 50 period Exponential Moving Average. A big role was played by the revision of the previous value of the U.S. NFP and now the US Dollar is showing increasing strength against its counterparts.

Technical Outlook

For today we expect a touch of the support at 1.2250 and a consequent bounce higher. After this possible bounce and as long as price is trading below the 50 EMA, we anticipate a break of 1.2250 and another test of 1.2200. However, a strong trend is not in place and given the lack of major news announcements today, we may get a ranging session, without clear direction.

Fundamental Outlook

The Pound will not be affected by major economic releases today, thus price direction will be mainly influenced by the technical aspect.

GDMFX

FOREX NEWS: POUND WEAKENS SUBSTANTIALLY. IS EURO NEXT?

EUR/USD

Forex News: The pair had a slow trading session yesterday, with a timid climb in the afternoon after a near-touch of the 50 period Exponential Moving Average. Part of this behaviour was due to a lacklustre economic calendar.

Technical Outlook

Price is showing rejection around 1.0525 support and the 50 period EMA but the bullish momentum doesn’t seem strong and in fact price lacks a clear bias. For today keep an eye on 1.0610 as a potential upper target if the bounce gathers some momentum, while to the downside, 1.0460 will become a valid destination if the Moving Average and 1.0525 support are decisively broken.

Fundamental Outlook

At 3:00 pm GMT the only notable indicator of the day is released: the JOLTS Job Openings, a report that shows the number of job openings available in the U.S., excluding the farming industry. The forecast is 5.59 Million and usually numbers above it strengthen the US Dollar because they indicate that consumer spending is likely to increase in the near future. The indicator is considered medium-impact but it can generate some movement nonetheless.


GBP/USD

The US Dollar strengthened substantially against the Pound yesterday and this generated a sharp drop for the pair, which broke through 1.2200 support and renewed the downtrend.

Technical Outlook

Although the pair dropped yesterday and the bears are in control for the time being, the two oscillators have reached oversold levels, warning of a potential bounce up. The last couple of candles also show long tails and this is another reason to anticipate a bullish pullback. To the downside 1.2125 is the first barrier, followed by 1.2090, while to the upside first level of importance is located at 1.2200 and as long as the pair remains below it, our bias is bearish.

Fundamental Outlook

The Pound has a light economic calendar for almost the entire week and today is no exception, thus the pair’s movement will be mostly influenced by the U.S. release and by the technical aspect.