Technical News|Gdmfx Brokerage|Daily

GDMFX

FOREX NEWS: POUND NULLIFIES LOSSES. IS THE EURO NEXT?

EUR/USD

Forex News: The US Dollar continued its assault on the Euro yesterday and the pair dropped in close vicinity of support. Overall the session was bearish, with very little buyer presence.

Technical Outlook

The US Dollar has regained short term control and is dragging the pair lower, aiming for 1.0650 support. Once it gets there, we expect to see a climb closer to the 50 period Exponential Moving Average but not above 1.0700 zone of resistance; the oscillators are approaching oversold, thus increasing the chances of a bullish pullback. Although lately the pair is controlled by the bears, we must acknowledge the uptrend that is still present, so we cannot exclude a sudden jump above 1.0700.

Fundamental Outlook

The European Commission will release today the forecasts for the next 2 years regarding economic expectations but the exact time is not yet known. This is not a high impact event but usually a hawkish stance generates Euro strengths and takes the pair higher.


GBP/USD

The pair dropped for the main part of the session but all the move was erased in the afternoon and now price is trading back above support after a strong rejection.

Technical Outlook

The break of 1.2420 support proved short lived and price reversed sharply before reaching 1.2325 support. The Stochastic was already oversold and moving up, while the Relative Strength Index just reached oversold before the bounce and these were early signs of a potential move north. The current situation is fuzzy but we expect the climb to extend into 1.2480 and the 50 period Exponential Moving Average where the next direction will be decided.

Fundamental Outlook

There are no major events scheduled for the Pound or the US Dollar today so the technical aspect will prevail.

GDMFX

FOREX NEWS: THE BALANCE OF POWER SHIFTS AGAIN. INDECISION TAKES OVER

EUR/USD

Forex News: Yesterday was a slow day on the fundamental scene but the pair didn’t lack action and showed a perfect bounce at support, followed by a touch of resistance. It remained capped and a breakout didn’t occur.

Technical Outlook

Price is bouncing between 1.0650 support and 1.0710 resistance and so far we don’t have a clear winner. If the current move extends past 1.0710, it will encounter the 50 period Exponential Moving Average and the way it will behave there, will probably decide the next direction. If the bulls can close a full candle above the 50 EMA, we may expect to see a resurgence of the uptrend but a bounce lower will show that the balance of power is shifting towards the short side, so we will be looking for a break of 1.0650.

Fundamental Outlook

The only notable event of the day is the release of the U.S. Unemployment Claims, an indicator that shows how many people asked for unemployment related benefits during the previous week. Usually the impact is low-to-medium, mostly because the indicator is released every week, but higher numbers than the forecast 249K can weaken the US Dollar. The time of the release is 1:30 pm GMT.


GBP/USD

After a brief stall at the 50 period Exponential Moving Average, the bulls took control again and now resistance is tested, with price confined between support and resistance.

Technical Outlook

The latest impulse is bullish and the pair is now trading above the 50 period EMA, with the oscillators showing a strong momentum. However, upside action is capped by 1.2550 resistance and if this barrier is not breached early into the session, we expect a drop below the Moving Average and possibly below 1.2480 support. Overall the picture is mixed and neither side is in clear control.

Fundamental Outlook

Today at 6:30 pm GMT, Bank of England Governor Mark Carney will deliver a speech at the Bank of England Inclusion Reception, in London. As always, speeches of heads of central banks should be treated with caution because volatility may surge, depending on the speaker’s attitude and matters discussed.

GDMFX

FOREX NEWS: US DOLLAR MAKES TIMID ADVANCES, DIRECTION STILL UNCERTAIN

EUR/USD

Forex News: Price action was mixed yesterday and the pair remained confined inside the range between 1.0710 resistance and 1.0650 support. The U.S. Unemployment Claims posted a lower number and this strengthened the US Dollar to some extent.

Technical Outlook

Today we are likely to see a break out of the range that has confined the pair for most of the week and we slightly favour the short side. To the upside, the 50 period Exponential Moving Average and the resistance at 1.0710 create a strong confluence zone and rejection was already seen during yesterday’s session (long upper candle wick). If price will take the path of least resistance, it will move below 1.0650 and possibly into 1.0600 zone.

Fundamental Outlook

At 3:00 pm GMT the University of Michigan will release their Consumer Sentiment, a survey that gauges the opinions of consumers regarding current and future economic conditions. It acts as a leading indicator of consumer spending and higher values than the forecast 97.9 usually strengthen the US Dollar but the impact is often medium.


GBP/USD

The Pound pushed higher yesterday but the bulls ran out of steam after breaking resistance and the pair dropped below the recently broken level, close to the opening price of the day.

Technical Outlook

Although the pair created a new high yesterday, the push higher was soon nullified so we cannot consider it a true breakout. It looks like the zone between 1.2550 and 1.2600 will reject price lower and we will probably see an encounter with the 50 period Exponential Moving Average; it must be noted that the Stochastic has reached overbought, thus increasing the chances of a move lower. For today our bias is mostly neutral as direction will probably be affected by the economic releases.

Fundamental Outlook

The British Manufacturing Production numbers come out today at 9:30 am GMT, showing the change in the total value of goods produced by the manufacturing sector. Usually the impact of this indicator is medium-to-high, mostly because manufacturing makes up for about 80% of the total industrial production and a higher number shows increased economic activity. Today’s forecast is a 0.3% change, while the previous was 1.3%.

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

GDMFX

FOREX NEWS: TIGHT RANGES, STRONG BREAKOUTS AHEAD

EUR/USD

Forex News: The US Dollar had a mixed session Friday, strengthening at first and then erasing all gains on the back of a worse than expected Consumer Sentiment survey. The pair remained between support and resistance, in a relatively tight range.

Technical Outlook

Today we will most likely see a move above 1.0650 or below 1.0610 but the direction is uncertain. The latest candles are showing wicks in both their upper and lower sides, which is a clear sign of indecision but the pair is trading below the 50 period Exponential Moving Average so the bias is bearish but this doesn’t exclude a push higher. If 1.0650 is broken, we expect to see a touch of the Moving Average, where upside momentum should diminish. To the downside, a break of 1.0610 would open the door for 1.0525 but this target will not be reached during one day unless surprising developments take place.

Fundamental Outlook

Today the economic calendar is light, without any major releases that can affect the pair’s direction so the main mover will be the technical aspect.


GBP/USD

Similar to the other pair, the Cable moved lower in the first part of Friday’s trading session but the losses were erased later in the day.

Technical Outlook

Although the bulls recovered some of the losses, the pair encountered resistance at the 50 period Exponential Moving Average and moved lower, ending the week right on 1.2480. If the pair remains below the 50 EMA, today’s destination is probably 1.2420 but if it gets there, we expect a push higher, mostly because that level coincides with the bullish trend line seen on the chart above. A break of the trend line would show that the bears are taking control of medium term price action.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound will not be affected today by economic releases so the focus will be entirely on the technical side unless surprising events take place.

GDMFX

FOREX NEWS: FED CHAIRWOMAN YELLEN TESTIFIES, POUND AFFECTED BY INFLATION DATA

EUR/USD

Forex News: Yesterday the economic calendar was light, without any market-affecting releases but the US Dollar had a great day against its counterparts and the pair dropped below support, exiting the tight range.

Technical Outlook

Now that the pair escaped the channel formed by 1.0650 resistance and 1.0610 support, we expect downside momentum to continue towards 1.0525 but this target will probably not be reached during the course of one day. It must be noted that the Stochastic and Relative Strength Index are both very close to their oversold levels and this may push price higher in the form of a retracement but for the short term we expect more downside.

Fundamental Outlook

The first release of the day is the German Preliminary version of the Gross Domestic Product, scheduled at 7:00 am GMT. The GDP is an economy’s main gauge of performance and the Preliminary is the most important version, thus a higher change than the anticipated 0.5% (previous 0.2%) can strengthen the Euro.

At 3:00 pm GMT, Fed Chair Janet Yellen will testify before the Senate Banking Committee, on the Semiannual Monetary Policy Report. Her answers and attitude can have a high impact on the US Dollar, thus caution is recommended.


GBP/USD

After an early move close to 1.2550 resistance, the bulls took over and controlled the remaining part of yesterday’s session but no notable breakouts occurred.

Technical Outlook

The pair is still in a range and is moving above and below the 50 period Exponential Moving Average, without a clear direction. We expect an encounter with 1.2420 and with the upwards trend line, where the next direction will be decided. To the upside the first barrier remains 1.2550, which if broken might trigger extended bullish movement.

Fundamental Outlook

Today at 9:30 am GMT we take a look at British inflation with the release of the Consumer Price Index. The forecast is a 1.9% change and higher numbers will probably generate Pound strength.

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FOREX NEWS: BUCKLE UP FOR FED CHAIR YELLEN’S SECOND ROUND OF TESTIMONIES AND U.S. CPI RELEASE

EUR/USD

Forex News: The German GDP showed a lower number than analysts had forecast and this weakened the Euro early in yesterday’s session. Hawkish comments made by Fed Chair Yellen later strengthened the US Dollar, and all this generated a bearish session.

Technical Outlook

Now the pair has clearly broken 1.0610 support and the bears are in control of short term price action. We expect to see a move into 1.0500 territory but until price gets there, it’s very likely to see a bullish retracement, possibly testing the recently broken support, which may turn into resistance. Both oscillators are trading very close to their oversold limits for a relatively long time and this increases the chance of a move up.

Fundamental Outlook

At 1:30 pm GMT we take a look at U.S. inflation with the release of the Consumer Price Index (expected change 0.3%) and at the same time the U.S. Retail Sales come out, showing changes in the total value of sales made through retail outlets (forecast 0.1% change). Higher numbers for these indicators usually strengthen the US Dollar.

Fed Chair Yellen will testify today at 3:00 pm GMT, this time before the House Financial Services Committee, and the topic is the Semiannual Monetary Policy Report, same as yesterday. Volatility is likely to increase, thus caution is recommended.


GBP/USD

The Pound weakened yesterday when the British CPI posted a lower than expected change and the pair is now trading below 1.2480 but price action remains choppy.

Technical Outlook

Although yesterday’s session belonged to the bears, the pair still hasn’t moved below the bullish trend line seen on the chart above, so it’s very possible to see a bounce higher from here. If the trend line is broken, the pair will probably reach 1.2420, followed by 1.2350 in the following days. To the upside the first notable barrier is represented by the resistance at 1.2550, which rejected price to the pip the last time it was touched.

Fundamental Outlook

The British Claimant Count Change is the day’s main event for the Pound, released at 9:30 am GMT. The indicator shows the change in the number of people who asked for unemployment related benefits and usually has a medium impact on the Pound. Higher values than the forecast 1.1K weaken the currency because they show decreased economic activity.

GDMFX

FOREX NEWS: US DOLLAR BOUNCES AT SUPPORT, BEARISH PRESSURE STILL PRESENT

EUR/USD

Forex News: Both the U.S. CPI and Retail Sales posted a better than expected value and this strengthened the greenback yesterday, bringing the pair right into support. Fed Chair Yellen’s dovish testimony erased almost all the gains later in the day.

Technical Outlook

The support at 1.0525 rejected price higher as soon as it was touched and both the Relative Strength Index and Stochastic are very close to their oversold levels so we expect the pair to continue to climb, possibly into 1.0600 zone. If the pair drops below 1.0525, the next destination is 1.0460 but we don’t expect it to be reached before a stronger retracement to the upside is completed.

Fundamental Outlook

The day’s main events are release of the U.S. Building Permits and Philly Fed Manufacturing Index, both scheduled at 1:30 pm GMT. These are leading indicators of economic activity in the construction and manufacturing sectors respectively, and higher values usually strengthen the US Dollar but to a limited extent. The forecast for the Building Permits is 1.23M and for the Manufacturing Index is 18.5.


GBP/USD

Similar to the other pair, the Cable dropped when the U.S. data was released and then erased all losses during Janet Yellen’s testimony. Now the pair is trading above support but below the bullish trend line.

Technical Outlook

As long as the pair is trading below the 50 period Exponential Moving Average and below the recently broken uptrend line, our bias is bearish, anticipating a touch of 1.2350. However, it is important to note that yesterday the US Dollar took a hit during Yellen’s testimony speech and this makes the picture less clear so we cannot exclude a move above 1.2480 and above the 50 period EMA. If this is the case, the bulls will probably continue the momentum until 1.2550 is reached again.

Fundamental Outlook

The United Kingdom didn’t schedule major economic releases for today so the pair’s direction will be affected by the U.S. indicators and by the technical aspect.

GDMFX

FOREX NEWS: DOLLAR GIVES UP GAINS, BRITISH RETAIL SALES EYED

EUR/USD

Forex News: Despite better than expected data for the U.S. economy, the greenback had a rough day yesterday and the pair climbed for the entire session, breaking the 50 period Exponential Moving Average.

Technical Outlook

Yesterday’s climb took the pair above the 50 EMA and above 1.0650, making the short term bias bullish. However, if the current impulse will develop into a short term uptrend, we must first see 1.0650 turn into support. If the pair moves up and then returns to retest the mentioned level, it will establish support and it will open the door for a touch of 1.0700 zone. A quick move below 1.0650 will suggest that the bullish move was just a retracement and 1.0610 will be tested again.

Fundamental Outlook

The economic calendar is light today for both the Euro and the US Dollar, thus the pair’s direction will be mainly affected by the technical aspect.


GBP/USD

The Pound showed strength against the US Dollar but later in yesterday’s session, the pair started to show rejection and is now hovering close to the 50 period Exponential Moving Average, without clear direction.

Technical Outlook

The last two candles on a four hour chart show long wicks in their upper part, which is a sign of rejection. However, currently control doesn’t clearly belong to either side and the pair is mostly ranging, with a slight bearish bias. If price remains above the 50 period Exponential Moving Average, the day’s target will become 1.2550, otherwise we expect an encounter with 1.2420.

Fundamental Outlook

The British Retail Sales are today’s only notable release, scheduled at 9:30 am GMT and expected to show a change of 1.0% compared to the previous -1.9%. Sales made at retail levels are an important part of the entire economic activity, thus a higher change than anticipated will probably bring Pound strength.

GDMFX

FOREX NEWS: BEARISH PRESSURE AMPLIFIES, SUPPORT IN THE WAY

EUR/USD

Forex News: Friday’s session belonged almost exclusively to the bears and after finding resistance near 1.0680, the pair dropped to touch the support at 1.0610. The 50 EMA was also broken decisively so we might be looking at a short term downtrend.

Technical Outlook

It looks like the climb above the 50 period Exponential Moving Average seen last week did not generate additional buying pressure and now that the pair has returned below it, the bears might be taking over the pair’s movement. Last week ended right on 1.0610 level but this doesn’t mean that support is holding and today we will get a real sense of direction: if price moves below support, we will probably see another move into 1.0525 in the near future, otherwise we will probably have a ranging day, with price confined between 1.0610 and 1.0650.

Fundamental Outlook

The United States celebrates Presidents’ Day and banks will be closed so we will probably see low volatility during the New York session. Also, no economic indicators will be released on either side of the Atlantic so the entire session may be ranging.


GBP/USD

The British Retail Sales showed a disappointing change of -0.3% (forecast 1.0%) and this was one of the main reasons why the pair had a bearish session Friday, moving below 1.2420.

Technical Outlook

Although the latest impulse is bearish, the pair is ranging from a longer term perspective and 1.2420 support is not decisively broken so a move up cannot be excluded. However, we slightly favour the short side for today, mostly because the effect of the disappointing Retail Sales figure will probably extend to the early stages of this week. The first notable support is located at 1.2350, while resistance sits around 1.2480.

Fundamental Outlook

Similar to the other two currencies, today the Pound will not be affected by economic releases, so the main focus will be on the technical side.

GDMFX

FOREX NEWS: POUND IN THE SPOTLIGHT: BRITISH INFLATION REPORT HEARINGS

EUR/USD

Forex News: As expected, yesterday’s session was slow and price remained confined in a tight range after failing to break the support at 1.0610. Most of the choppiness was due to the United States banks being closed in celebration of Presidents’ Day.

Technical Outlook

It looks like the pair is struggling to find the next direction but both the buyers and sellers are hesitant at the moment. The main levels to watch are 1.0610 as support and 1.0650 as resistance but an important role will be played by the 50 period Exponential Moving Average, which currently is moving downwards and is above price, thus making the bias bearish. Once we will see a strong break of one of the horizontal levels or the EMA, direction will become clearer but as long as price stays between them, our bias is neutral.

Fundamental Outlook

We have another lacklustre day ahead, with the only notable release being the European Manufacturing Purchasing Managers’ Index, scheduled at 9:00 am GMT. This is a measure of economic health, derived from the opinions of purchasing managers, that usually brings Euro strength if it posts values above expectations. The forecast for today is 55.0 but keep in mind this is a medium impact indicator.


GBP/USD

The bears couldn’t keep the pair below 1.2420 support yesterday and the buyers took control of price action, climbing into resistance; however, the pair is not out of the range and control doesn’t clearly belong to wither side.

Technical Outlook

As long as the pair is trading between 1.2420 support and 1.2480 resistance, our bias is neutral. Nevertheless, it must be noted that to the upside we have three important elements that can push price lower: the 50 period Exponential Moving Average, the level at 1.2480 and a bearish trend line. If price will choose the path of least resistance, we will see a bounce from here and a move into 1.2420 but a break of the current resistance zone would show bullish strength and will make 1.2550 the next target.

Fundamental Outlook

Today at 10:00 am GMT, Bank of England Governor Carney and MPC members will testify on inflation and economic outlook before the Treasury Committee of the Parliament. These hearings have the potential to be a strong market mover for the Pound and will be the main event of the day but keep in mind that price action may be irregular during the speeches.

GDMFX

FOREX NEWS: US DOLLAR SHOWS MIXED SIGNALS AGAINST COUNTERPARTS. FOMC MINUTES EYED FOR RATE HIKE CLUES

EUR/USD

Forex News: A much needed breakout took place yesterday on the back of better than forecast European economic data. The pair dropped to touch the important support at 1.0525 where we expect a pause or possible bounce higher.

Technical Outlook

Last time the pair visited 1.0525 area, it bounced strongly and it’s very possible to see the same type of behaviour again. This view is also supported by the oversold condition of the Stochastic and Relative Strength Index, so even if we will see price move below 1.0525, the extent should be limited and a pullback should soon follow. Overall our bias is bearish as long as the pair is trading below the 50 period Exponential Moving Average.

Fundamental Outlook

The German IFO Business Climate comes out at 9:00 am GMT, showing the opinions of about 7,000 businesses regarding current economic conditions as well as a 6-month outlook. The impact is medium-to-high and usually, numbers above the forecast strengthen the Euro; today’s anticipated value is 109.6 vs. 109.8 prior.

Later in the day, at 7:00 pm GMT the Fed will release the FOMC Meeting Minutes, which contain details about the latest rate vote and possibly hints about the next rate hike. Usually the Minutes have a strong impact on the US Dollar only if they offer clues about the next rate hike and if that is the case, we expect strong movement on all USD pairs.


GBP/USD

The Inflation Report Hearings had a surprisingly low impact on the Pound but later in yesterday’s session the pair showed increased volatility and jumped after another failed attempt to break support.

Technical Outlook

Once again the US Dollar showed that it lacks the strength to break support and the pair immediately jumped higher, testing the 50 period Exponential Moving Average and coming very close to horizontal resistance and to the bearish trend line. Once the bearish trend line is broken (by then the other 2 elements will be probably broken as well), we expect price to move into 1.2550. Of course, given the current stalemate, it’s not out of the question to see a move back into support, so our view is currently neutral, expecting a clear breakout.

Fundamental Outlook

The main event for the Pound is the British Second Estimate Gross Domestic Product, scheduled at 9:30 am GMT and expected to show a change of 0.6%, same as previous. The GDP is an economy’s main gauge of performance but the version released today is less important than the Preliminary version released a month ago; nonetheless, values above expectations can strengthen the currency and the opposite is valid for numbers below forecast.

GDMFX

FOREX NEWS: US DOLLAR STILL WITHOUT POWER, DESPITE HINTS OF ‘FAIRLY SOON’ RATE HIKE

EUR/USD

Forex News: After a small pause at 1.0525, the bears managed to break the level yesterday, ahead of the FOMC Minutes release but the pair returned above it although some FOMC members said that a rate hike may come fairly soon.

Technical Outlook

The FOMC Minutes also showed that some members fear downside inflation risks and the pair moved above the recently broken level at 1.0525. The oversold condition of the two oscillators gave an early warning about this potential bounce higher but the overall bias remains bearish. Probably the pair will continue higher, into the 50 period EMA but if it gets there, we expect it to start moving to the downside again.

Fundamental Outlook

Today we have a lackluster session, with the U.S. Unemployment Claims as the main focus. The indicator is released at 1:30 pm GMT and is expected to show a number of 242K unemployed people during the previous week. A higher number suggests that economic activity is slowing down and usually this means the US Dollar will weaken; however, the indicator is released each week and this somewhat limits its impact.


GBP/USD

Despite a better than expected British GDP reading, the pair dropped in the early stages of yesterday’s session but the FOMC Minutes brought mixed movement and the pair did not exit the range.

Technical Outlook

The choppy movement is likely to continue until 1.2480 or 1.2420 will be broken and re-tested from above or below, respectively. Our bias remains neutral until one of these levels is broken; the 50 period Exponential Moving Average is almost flat, confirming the lack of determination showed by both the bulls and bears.

Fundamental Outlook

There are no major releases on the British economic calendar today so the direction will be mostly decided by the technical aspect.

GDMFX

FOREX NEWS: GREENBACK SLIDES LOWER AS COUNTERPARTS GAIN GROUND

EUR/USD

Forex News: The US Dollar continued to show weakness throughout yesterday’s trading session and the pair remained well above support, coming close to the 50 period Exponential Moving Average.

Technical Outlook

We expect the current bullish move to extend into the 50 EMA or slightly above, into 1.0610 and there, the sellers are likely to regain control, taking the pair lower for another attempt to break 1.0525. It must be noted that the US Dollar has shown clear weakness over the last couple of days, despite hints towards a possible rate hike and this could mean that bullish movement might not stop at the Moving Average or at 1.0610. However, the way price behaves there will offer clues about the future medium term trend.

Fundamental Outlook

The U.S. New Home Sales numbers are released today at 3:00 pm GMT and this is the only notable indicator of the day. Usually the impact is medium-to-low but a higher number than the forecast 575K shows increased activity in the housing sector and strengthens the US Dollar.


GBP/USD

The pair finally showed a little determination yesterday and managed to break the bearish trend line as well as the resistance at 1.2480, giving us a one-directional trading session.

Technical Outlook

Now that the pair has finally broken an important level, we expect to see additional movement in the direction of the break, which in this case is up. For today the first target is 1.2550 resistance but it’s very possible to see a return at the recently broken 1.2480 for a re-test form above. If this happens, the previous resistance will turn into support and the probability of an extended move to the upside will increase.

Fundamental Outlook

The United Kingdom didn’t schedule any important economic releases for today so the technical aspect will be the main market mover. We hope you had a profitable trading week and we wish you a relaxing weekend.

GDMFX

FOREX NEWS: PAIRS SLIDE LOWER, US DOLLAR SHOWS SIGNS OF RECOVERY

EUR/USD

Forex News: Friday the pair initially moved above the 50 period EMA but reacted to resistance and dropped back below the Moving Average. U.S. President Trump spoke at the Conservative Political Action Conference but the speech was announced late and came as a surprise.

Technical Outlook

The pair found resistance at 1.0610 and posted a nice drop that took it below the Exponential Moving Average. The Stochastic has crossed downwards in overbought territory and price shows lower highs and lower lows, which is a characteristic of a downtrend, thus making us anticipate a drop into 1.0525. However if price moves higher from the current level, then a new higher low will be created, and the pair may be entering a ranging period.

Fundamental Outlook

Today’s main event is the release of the U.S. Durable Goods Orders, scheduled at 1:30 pm GMT. The indicator shows changes in the total value of purchase orders for long lasting goods, with a life expectancy of at least 3 years. Higher values than the forecast 1.6% (previous -0.5%) usually strengthen the US Dollar but the impact is limited if the actual number comes close to analysts’ expectations.


GBP/USD

Friday the US Dollar strengthened and the pair dropped, nullifying all the gains accumulated a day before and leaving market participants with more uncertainty regarding the next direction.

Technical Outlook

The bulls ran out of steam at 1.2550 resistance and the pair dropped sharply to touch the recently broken bearish trend line. The way price behaves here will offer clues about future direction: if price responds well to the trend line and bounces higher, we expect another move into 1.2550 (not necessarily today) and otherwise, 1.2420 will be probably broken.

Fundamental Outlook

The economic calendar for the Pound is light today, without any major news announcements so we may get a ranging session, with price direction mainly affected by the technical aspect.

GDMFX

FOREX NEWS: U.S. GROSS DOMESTIC PRODUCT: A LIFELINE FOR THE US DOLLAR?

EUR/USD

Forex News: The first day of the week was controlled by the bulls despite a better than expected value for the U.S. Durable Goods Orders. The pair moved above the 50 period EMA and resistance was tested but not broken.

Technical Outlook

Yesterday’s price action created a higher low and the pair moved above the 50 Exponential Moving Average, showing bullish signs. However, the resistance at 1.0610 is not broken at the time of writing and this means that the way price behaves here may decide the future medium term direction: a break will make the bias bullish and 1.0650 will become the first target, otherwise the pair is headed towards 1.0525 zone once again.

Fundamental Outlook

Today’s main event is the release of the U.S. Preliminary Gross Domestic Product, scheduled at 1:30 pm GMT and expected to show a 2.1% change compared to the previous 1.9%. The GDP is an economy’s main performance gauge and higher numbers usually strengthen the currency although the effect may take some while to materialize.

Later in the day, at 3:00 pm GMT we have another U.S. release: the Consumer Confidence survey, which tries to gauge the opinions of about 5,000 households regarding current and future economic conditions. The forecast is 111.1 and numbers above this value usually strengthen the US Dollar.


GBP/USD

The pair had a mixed session Monday, without major advances to either side but we saw another failed attempt to move below 1.2420, which resulted in a bounce higher.

Technical Outlook

The pair has tried several times to break 1.2420 and has established another support at 1.2385 but it remains in a range overall. The current move up is likely to reach the 50 period Exponential Moving Average but there it will also encounter the resistance at 1.2480 and given the current conditions, we don’t expect that level to be broken.

Fundamental Outlook

The Pound has a light economic calendar for today, without any major economic releases, thus the U.S. events and the technical side will be the factors that will decide direction.

GDMFX

FOREX NEWS: CHOPPINESS CONTINUES, BREAKOUTS ON THE HORIZON

EUR/USD

Forex News: U.S. Gross Domestic Product showed a change of 1.9%, below analysts’ expectation of 2.1% and this contributed to bullish price action for the pair yesterday. Despite a better than expected U.S. Consumer Confidence survey released later in the day, the US Dollar couldn’t drive the pair lower.

Technical Outlook

Price has moved above the resistance at 1.0610 for the second time in a short while and it seems like the bulls are taking control of price action, although volatility remains relatively low. Price is trading above the 50 period Exponential Moving Average and above resistance, with the Relative Strength Index showing some upside momentum so we expect to see a climb into 1.0650 but once the RSI becomes overbought, the pair is likely to reverse, especially if this happens near resistance and volatility remains low.

Fundamental Outlook

Early today, at 2:00 am GMT, U.S. President Trump will speak before the Congress about healthcare and other topics. The impact of this speech is not known but caution is recommended. Later in the day, at 1:00 pm GMT the German Preliminary Consumer Price index comes out, showing changes in the price paid by consumers for the goods and services they purchase. This is the main gauge of German inflation and plays an important role for overall European inflation, with higher values than the expected 0.6% strengthening the Euro.

The last important release of the day is the U.S. Manufacturing PMI, scheduled at 3:00 pm GMT and expected to post a figure of 56.2. The survey acts as a leading indicator of economic health, derived from the opinions of purchasing managers and usually a higher value strengthens the US Dollar but the impact is often limited if the actual number matches expectations.


GBP/USD

The pair completed another lacklustre day yesterday, without any major developments on the fundamental scene and with choppy price action, which lacked clear direction.

Technical Outlook

Resistance was touched and price moved lower but failed to break support and now appears to be headed higher; this behaviour is a clear indication that neither bulls nor bears are in control and the pair lacks direction. As long as price remains between 1.2420 and 1.2480 and the 50 Exponential Moving Average is flat, we consider it in a range and our bias is neutral, expecting a strong breakout.

Fundamental Outlook

Today at 9:30 am GMT the Pound will be affected by the release of the British Manufacturing PMI, a survey of purchasing managers from the manufacturing sector. The indicator usually brings Pound strength if it posts a higher reading than today’s forecast of 55.7 but the impact is often mild.

GDMFX

FOREX NEWS: US DOLLAR GAINS THE UPPER HAND, BUYERS LIKELY TO RETALIATE

EUR/USD

Forex News: The US Dollar finally showed signs of strength yesterday and pushed the pair lower after another false break of resistance. The pair is still not clearly trending but at least it moves in a more decisive manner.

Technical Outlook

After another failed push above 1.0610, price moved below the 50 period Exponential Moving Average and continued lower into 1.0525 support. If the US Dollar strength seen yesterday will continue today, we expect to see a move below the current support and into 1.0460 but a bullish pullback is very likely before the next support is reached. As long as the pair remains below the 50 EMA, our bias is bearish.

Fundamental Outlook

The day’s highlight is the release of the Eurozone Consumer Price Index, scheduled at 10:00 am GMT and expected to show a change of 1.8%, same as previous; however, the release is likely to have just a medium impact because the German CPI, which accounts for an important part of overall European inflation, was already released yesterday. Normally, higher inflation brings strength for the currency.


GBP/USD

Yesterday the pair finally broke out of the tight range it was trapped in for a long while and key support was broken, opening the door for additional bearish movement.

Technical Outlook

The recent breakout will probably generate a move into 1.2250 support but before that can happen, it’s very possible to see a re-test of 1.2350 from below. If this previous support turns into resistance, then the chances of a move into 1.2250 will increase, otherwise the pair is likely to re-enter a ranging condition. The oscillators are becoming oversold and this makes a pullback more likely.

Fundamental Outlook

The British Construction PMI is released today at 9:30 am GMT and is the only notable event for the Pound. This survey acts as a leading indicator of optimism and economic health but the impact is usually low if the actual number matches analysts’ forecast, which for today is 52.2, same as previous.

GDMFX

FOREX NEWS: OVERSOLD LEVELS CALL FOR BULLISH PULLBACKS

EUR/USD

Forex News: Yesterday the Eurozone CPI showed that inflation is improving but despite this, the pair descended below 1.0525 after a small bullish pullback. Volatility remained relatively high and price approached minor support.

Technical Outlook

The fact that 1.0525 support was broken yesterday is a major victory for the bears but it must be noted that this level was broken before and price returned above it almost immediately. Also, we have minor support around 1.0495 and the Stochastic is close to oversold, so we expect to see a bounce higher. If the pair remains below 1.0525, the next target will become 1.0460, otherwise the move up may find resistance at the 50 period EMA.

Fundamental Outlook

At 3:00 pm GMT the U.S. Non-Manufacturing PMI (also called Services PMI) is released, showing the opinions of about 400 purchasing managers regarding the condition of the services sector. The forecast is 56.5, same as previous and usually numbers above it, strengthen the US Dollar.

The last event of the week is a speech delivered by Fed Chair Yellen at the Executives Club of Chicago on the topic of economic outlook. The speech should be treated with caution because it may spark increased volatility; the time is 6:00 pm GMT.


GBP/USD

The British Construction PMI released yesterday matched analysts’ expectations and the event went mostly unnoticed but the pair continued lower and came very close to 1.2250 support.

Technical Outlook

The last candles show long wicks in both their upper and lower parts, which is a clear sign of indecision but also a warning that the bearish move will retrace higher. On top of that, both oscillators are moving into oversold territory, further increasing the chances of a move north. If this type of move occurs today, we don’t expect it to surpass 1.2350 but if the pair moves below 1.2250 before the mentioned pullback, the extent should be limited.

Fundamental Outlook

The British Services PMI is the last in this week’s series and shows the opinions of purchasing managers from the services sector regarding economic conditions in said sector. The impact is often low but usually, higher values than the expected 54.2 bring Pound strength; the time of release is 9:30 am GMT.

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

GDMFX

FOREX NEWS: US DOLLAR ON THE ROPES AGAIN, RESISTANCE THREATENED

EUR/USD

Forex News: The pair moved higher for the entire trading session Friday, with the most distance covered during Fed Chair Yellen’s speech, despite the fact that she mentioned a possible rate hike at the next Fed meeting.

Technical Outlook

Price travelled a very long distance compared to previous days and this usually generates a move to the opposite side in the form of a retracement. First resistance is located at 1.0630 and we expect it to be hit early in the day, then price to return lower but as long as the pair is trading above the 50 period Exponential Moving Average, our bias is bullish. A break of 1.0630 will open the door for 1.0680 but price will most likely retrace again before hitting that target.

Fundamental Outlook

The U.S. Factory Orders are today’s only notable indicator but usually the impact on the US Dollar is low, especially if the actual number matches the forecast. The release is scheduled at 3:00 pm GMT and the expected change is 1.1% (previous 1.3%); higher values strengthen the US Dollar and show that manufacturers will increase their activity to fill the orders.


GBP/USD

The pair briefly dipped below 1.2250 Friday but soon climbed back above it; most of the US Dollar weakness was seen during and after Janet Yellen’s speech but the bias is still bearish.

Technical Outlook

Although price climbed Friday, this doesn’t make our bias bullish and in fact, such a retracement higher was already predicted, mostly because the pair travelled a long distance without pullbacks and both oscillators were already oversold. The pair may continue higher but the extent of this correction should be limited and followed by another drop into 1.2250.

Fundamental Outlook

The economic calendar for the Pound is light, without any important releases, thus we may see ranging price action, influenced mainly by the technical aspect.

GDMFX

FOREX NEWS: BUYERS RUN OUT OF STEAM AT RESISTANCE. WHAT’S NEXT FOR THE US DOLLAR?

EUR/USD

Forex News: As it was expected, yesterday the pair retraced lower after Friday’s strong climb but resistance was tested before that. The fundamental scene was calm, without important releases.

Technical Outlook

The pair tested the resistance at 1.0630, which proved a strong barrier in front of rising price but today we expect another encounter with the mentioned level and the way price behaves there will determine the next direction. If the barrier cannot be surpassed on the second attempt, it should be considered a sign that the bulls have run out of steam and that we will probably see a move below the 50 period Exponential Moving Average. On the other hand, a break of 1.0630 will open the door for a touch of 1.0680.

Fundamental Outlook

Similar to yesterday’s trading session, the technical aspect will prevail today because the pair will not be affected by major economic releases for the Euro or US Dollar.


GBP/USD

Yesterday’s trading session was rather slow, without major developments on either side. The bullish retracement seems complete now and we expect the bears to step back in.

Technical Outlook

The pair was in need of a bullish retracement, mostly due to the oversold condition of both oscillators but now that retracement seems complete so we expect a break of 1.2250 support and a touch of 1.2215. If 1.2250 is not broken today, the pair will either enter a ranging period or will continue higher until the 50 period Exponential Moving Average is hit.

Fundamental Outlook

The United Kingdom didn’t schedule any important economic releases for today, so the technical side will be the deciding factor for direction.