FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP – CATALYSTS FOR A BREAKOUT
EUR/USD
Forex News: The Euro managed to recover yesterday from an almost one-year low on the back of comments made by German finance minister who said that Mario Draghi’s latest speech was “over-interpreted”. This spurred interest for the single currency and took the pair into 1.3200 resistance.\
Technical Outlook
Yesterday we saw a bearish break of 1.3200 support zone but developments during the day took price back into the mentioned zone for a retest. After a breakout, a retest of the recently broken level is common and usually, this retest shows if the break is sustainable or if it was just a fake. The bullish divergence is still present and the weekly gap is still not closed, so if price moves above 1.3200, we might see it climb at least until the gap is closed.
Fundamental Outlook
The German Consumer Price Index is released today at 12:00 pm GMT and analysts expect it to remain unchanged at 0.8%. German inflation contributes to overall Euro Zone inflation and lately it has been one of ECB’s major concerns; the Euro would benefit from higher values of the German CPI.
The United States will announce their Preliminary Gross Domestic Product today at 12:30 pm GMT and a minor decrease from 4.0% to 3.9% is expected. Since the GDP is an economy’s main performance gauge, better than expected values have the potential to strengthen the currency.
GBP/USD
The pair failed to break out of the tight range and instead bounced between support and resistance for the entire day as no major news affected either of the two currencies.
Technical Outlook
For today, a breakout is a high probability scenario but the direction will probably be determined by the US Gross Domestic Product. Yesterday we saw that price touched 1.6550 support and immediately moved up to test 1.6600 but failed to break this level as well. This shows indecision and the fact that price needs some sort of catalyst which will generate a break of either one of the levels mentioned.
Fundamental Outlook
The United Kingdom didn’t schedule any important news for today thus market participants will focus on the American events which are likely to trigger strong moves.
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