Technical News | Gdmfx Brokerage | Daily

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FOREX NEWS: BREXIT FALLOUT BRINGS FED RATE SPECULATION


EUR/USD

Forex News: The US Dollar weakened yesterday and this allowed the pair to move up, breaking 1.1100 resistance. Most of the dollar weakness was generated by speculation that the Fed will not raise rates until 2018 to prevent a deeper impact of the UK exit.



Technical Outlook

The break of 1.1100 opens the door for a move into 1.1150. The 50 period Exponential Moving Average is in close vicinity of the latter level and the two combined will create a confluent zone of resistance that will possibly become a good place for the pair to resume downside movement. Of course the geopolitical aspect still remains the most important and price direction will depend mostly on that rather than technical support and resistance.

Fundamental Outlook

The European Flash Estimate version of the Consumer Price Index is released today at 9:00 am GMT and is expected to show a 0.0% change from the previous -0.1%. The release may be mostly overlooked by market participants, especially if the actual value matches analysts’ prediction but under normal circumstances, higher numbers strengthen the Euro.


GBP/USD

The Pound recuperated some of the losses and moved higher yesterday, mostly on the back of weakness in the US Dollar, generated by speculation about Fed rates.



Technical Outlook

It appears as the weekly gap will be closed soon and the pair may find resistance around 1.3655. If this happens, we expect the bears to regain control of price action and the pair to move below 1.3483; the Stochastic is approaching overbought and this adds to the possibility of movement south. The pair remains high risk.

Fundamental Outlook

The British Final version of the Gross Domestic Product will be released today at 8:30 am GMT. This indicator acts as an overall gauge of economic performance but the Final version is the least important. Nonetheless, higher values than the previous 0.4% can strengthen the Pound but the extent should be limited.

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FOREX NEWS: RESISTANCE HOLDS, BEARS READY TO TAKE BACK CONTROL


EUR/USD

Forex News: European inflation showed slight improvement yesterday and this initially strengthened the Euro, taking the pair into resistance, where the bullish momentum faded and rejection was seen.



Technical Outlook

The resistance level at 1.1150 combined with the 50 period Exponential Moving Average created a strong confluence zone that rejected price lower yesterday. The Stochastic shows a bearish cross close to its overbought level and this, combined with the rejection seen at 1.1150, sets the stage for a drop towards 1.0960. On the other hand, if a four hour candle closes above 1.1100, we might see another attempt to break 1.1150 and the 50 EMA.

Fundamental Outlook

The day’s only notable economic release is the U.S. Manufacturing PMI, scheduled at 2:00 pm GMT. This is a survey of about 400 purchasing managers regarding business conditions in the manufacturing sector and usually acts as a leading indicator of economic health. Today’s expected value is 51.3, same as previous and higher numbers can bring US Dollar strength.


GBP/USD

Price action slowed down yesterday and the pair started ranging on the lower time frames. After a timid move above 1.3483, price returned below this level.



Technical Outlook

The bullish retracement seems exhausted as shown by the return below 1.3483 and this suggests that the bears may step back in, attempting to move the pair towards 1.3227. The Pound is still weakened by UK’s decision to leave the European Union and this favours moves south, probably towards 1.3000 in the medium term. A clear close above 1.3483 would make 1.3655 the next target.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing Purchasing Managers’ Index is released and the anticipated value is 50.0, almost unchanged from the previous 50.1. Higher numbers are indicative of optimism and may strengthen the Pound to a limited extent.

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

[GDM_FX]

FOREX NEWS: PREPARE FOR IRREGULAR VOLATILITY AS THE U.S. CELEBRATE INDEPENDENCE DAY


EUR/USD

Forex News: The U.S. Manufacturing PMI released Friday showed a value of 53.2, better than the forecast 51.3 but despite this, the pair climber for most of the day, breaching resistance.



Technical Outlook

Price moved above the 50 period Exponential Moving Average but a long upper wick appeared on the candle that breached the line. This is a sign of rejection that makes us anticipate a drop through 1.1100 and into the bullish trend line seen on the chart above. If 1.1100 support rejects price, we expect a break of the 50 period EMA and 1.1150 resistance.

Fundamental Outlook

It’s Independence Day so banks across the United States will be closed and volatility will be affected, especially in the New York session. On the Euro side things are slow as well so we may have an overall ranging day.


GBP/USD

The pair moved back into support but momentum faded and it looks like now both bulls and bears are undecided about the next direction. The economic indicators released Friday went mostly unnoticed.



Technical Outlook

The sideways movement seen Friday is likely to continue today so we expect the pair to remain between 1.3227 and 1.3483. On the other hand, a bearish break of 1.3227 support will probably extend into the low at 1.3119. Price direction will also be influenced by the economic data released but the New York session will probably lack major developments due to Independence Day.

Fundamental Outlook

At 8:30 am GMT the British Construction PMI is released, showing the state of the construction sector as perceived by about 170 purchasing managers. The anticipated value is 50.6, slightly lower than the previous 51.2; higher numbers show optimism and usually send the Pound higher.

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FOREX NEWS: ALL EYES ON POUND AS BOE RELEASES FINANCIAL STABILITY REPORT


EUR/USD

Forex News: As expected price action yesterday was slow and this was mostly due to the fact that U.S banks were closed, celebrating Independence Day and on the Euro side no major indicators were released either.



Technical Outlook

The only notable move seen yesterday was a bounce at the bullish trend line. However, at the time of writing, this bounce hasn’t generated a break of resistance and the 50 period Exponential Moving Average is flat, running through price. If bullish momentum picks up and 1.1150 is surpassed, we expect a move into 1.1240 during the days to come but this will depend a lot on the economic releases.

Fundamental Outlook

The U.S. Factory Orders are released today at 2:00 pm GMT. This is an indicator with a mild impact, that measures changes in the value of orders placed with manufacturers. Higher numbers than the forecast -0.7% usually bring US Dollar strength.


GBP/USD

Similar to the other pair, the Pound-Dollar had a slow day, with sideways movement and no major developments.



Technical Outlook

Price remained above 1.3227, moving sideways for the most part of yesterday and this type of behavior usually suggests that a strong move (breakout) is in the making. However, the direction of this potential breakout is hard to anticipate so keep an eye on 1.3227 because a close below it will likely push price into 1.3119. To the upside, 1.3483 remains the first level of interest and although it’s a long travel, price may be able to complete it if volatility is generated by today’s fundamental developments.

Fundamental Outlook

Today at 9:30 am GMT the Bank of England will make public the Financial Stability Report and half an hour later, BOE Governor Mark Carney will hold a press conference discussing the report. This document contains the Bank’s point of view regarding overall stability and risks in the financial sector and may contain hints about the direction of monetary policy. The report combined with Carney’s press conference can generate strong movement and potentially irregular price action.

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FOREX NEWS: THE WATERFALL CONTINUES: POUND STRUGGLES TO FIND SUPPORT


EUR/USD

Forex News: The pair continued its slow movement yesterday but remained above the bullish trend line. The U.S. Factory Orders came out close to analysts’ expectations and the event did not generate strong impact.



Technical Outlook

Yesterday’s price action crated minor resistance at 1.1186; if this barrier is surpassed soon, we expect a touch of 1.1240 but currently price is testing the bullish trend line and we may see a breakout. If 1.1150 holds and the trend line is broken, we will likely see a move into 1.1100 and even lower. The pair has been moving north for a few days but candles are small and now long wicks appear in their upper side. This is a sign of rejection, thus we slightly favor the short side.

Fundamental Outlook

The Fed will release today at 6:00 pm GMT the FOMC Meeting Minutes which contain details of their latest meeting and insights into the reasoning that determined the most recent rate decision. More importantly, this document may contain hints about future direction of monetary policy and if this is the case, the US Dollar will move strongly so caution is advised.


GBP/USD

The Pound resumed bearish action yesterday after a period of sideways movement and continued to depreciate to a low of 1.3050. The Financial Stability Report and Carney’s press conference did not help an already weak Pound to rebound.



Technical Outlook

At the time of writing the pair had reached a low at 1.3050, breaking the levels seen immediately after the Brexit vote on June 23. This low will probably be surpassed soon and we expect our target of 1.3000 to be reached today. The pair is likely to pause or bounce higher near this strong psychological support but the bullish side is clearly very weak now and the possibility of extended moves north is slim. First resistance may be provided by the zone around 1.3120.

Fundamental Outlook

The pair will be affected today by the technical side and by the U.S. events as the United Kingdom did not schedule major economic releases.

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FOREX NEWS: WITNESSING HISTORY: POUND BELOW 1.2800


EUR/USD

Forex News: The pair broke the bullish trend line ahead of the FOMC Meeting Minutes and once those were released, price moved up to test the recently broken 1.1100. Most of the dollar weakness was generated by the fear that Brexit turbulences may hinder future economic growth.



Technical Outlook

The pair is currently testing 1.1100 resistance after showing rejection near 1.1025 but even if resistance is broken, we don’t expect a strong move above the 50 period Exponential Moving Average. The overall bias is bearish considering the geopolitical situation, so we expect a break of 1.1025 minor support and a move towards 1.0960. As an alternate scenario, a break of the 50 period EMA will likely take price above 1.1150.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look into American jobs situation with the release of the ADP Non-Farm Employment Change. This report is not as important as the Government released data that comes out a day after but still, higher numbers show increased economic activity and usually strengthen the US Dollar. The forecast for today’s release is a change of 158K compared to the previous 173K.


GBP/USD

The Pound is still struggling to find support but failed to do so yesterday and the waterfall continued, with a new low being created at 1.2796.



Technical Outlook

We’ve seen another huge drop and a new low created at 1.2796 but signs of rejection have appeared. The massive drop calls for a bullish retracement and both the Stochastic and Relative Strength Index are oversold, favouring a move up. This being said, the overall bias is clearly bearish and all moves north should be limited.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing Production is released, showing changes in the total output generated by the manufacturing sector. The expected change is -1.2% compared to the previous 2.3% and higher numbers usually strengthen the Pound but under present conditions, we don’t expect a strong impact.

[GDM_FX]

FOREX NEWS: ENDING A WILD WEEK WITH A BANG: U.S. NON-FARM PAYROLLS


EUR/USD

Forex News: The jobs data released yesterday by Automatic Data Processing Inc. (ADP) showed slight improvement compared to previous readings but the event did not have a major impact and the pair ranged for most of the day.



Technical Outlook

It looks like price found strong resistance at 1.1100 so now we expect it to star moving lower, towards 1.1025. The 50 period Exponential Moving Average is also above price, angled downwards and this increases the chances of extended moves south but a lot will depend on the American jobs data that’s about to be released.

Fundamental Outlook

At 12:30 pm GMT the Non-Farm Payrolls report is released, showing the change in the number of employed people in the U.S.. This is widely regarded as the most important indicator for the jobs market in the U.S and higher numbers show increased economic activity and suggest that consumer spending will pick up in the near future. The expected number is 174K, a huge increase from last month’s 38K and anything close or above this value will likely strengthen the US Dollar. Volatility usually increases and caution is always advised.


GBP/USD

The pair retraced higher yesterday, which was expected after another massive drop. The greenback wasn’t affected a lot by the ADP Non-Farm Employment Change and overall price action was slow compared to the previous days.



Technical Outlook

The current climb may extend into the zone around 1.3100 but once and if that happens, we expect the bears to step in and take back control. It’s also possible to see a drop even before 1.3100 is reached but either way, the first bearish target is represented by the 1.2800 zone. A break of the historical low created at 1.2796 will probably trigger an extended move south.

Fundamental Outlook

The pair’s direction will be heavily influenced by the release of the U.S. Non-Farm Payrolls but on the Pound side there are no major announcements.

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

[GDM_FX]

FOREX NEWS: MARKET IN A RANGE AS INDECISION DRIVES SHORT-TERM PRICE ACTION


EUR/USD

Forex News: U.S. employment showed great improvement as seen from Friday’s NFP that posted a number of 287K, compared to the forecast 175K. However, most of the new jobs were created in the lowest paying sectors and this triggered a whipsaw that took price higher.



Technical Outlook

Price jumped up and down at the time of the NFP release but still remained below the 50 period Exponential Moving Average. There is a great degree of indecision as shown by the long wicks of the NFP candle, so we expect the pair to remain between the 50 EMA and 1.1025 for most of today’s trading session. As an alternate scenario, a break of either one of these technical levels will likely trigger an extended move in that direction.

Fundamental Outlook

The Eurogroup Meetings are today’s only notable event but these are closed to the press and a formal statement will be released once they have completed. Sometimes, participants talk to press representatives during the day and usually that is a reason for volatility but unless important matters are discussed, we don’t expect strong movement.


GBP/USD

The pair had a slow session Friday compared to the previous days and at the NFP release it behaved erratically, jumping up and down.



Technical Outlook

The pair is capped to the upside by 1.3050 and to the downside by 1.2880; these are minor levels of resistance and support and we expect price to remain between them for the most part of today’s trading session. A bullish break of 1.3050 will open the door for 1.3119 and if 1.2880 is surpassed, we expect 1.2796 to be hit. This being said, we don’t believe that price will surpass the outside levels (1.3119 or 1.2796) during today’s trading session.

Fundamental Outlook

There are no major events on today’s calendar so we expect price action to be influenced mainly by the technical aspect.

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FOREX NEWS: POUND STILL IN THE FOCUS AS BOE GOVERNOR CARNEY TESTIFIES


EUR/USD

Forex News: The economic calendar was light yesterday and the Eurogroup Meetings didn’t bring any major news developments so overall the trading session was slow and ranging.



Technical Outlook

The pair bounced close to 1.1025 but the bulls didn’t manage to take price above the 50 period Exponential Moving Average. This shows that the market is still ruled by indecision and makes our bias neutral until either 1.1025 support or the 50 period EMA is broken. Once this happens, we expect the market to continue in the direction of the break.

Fundamental Outlook

We have a slow day from a fundamental standpoint as no major indicators are released. Price action will be mostly influenced by the technical aspect.


GBP/USD

Price remained in a relatively tight range yesterday and didn’t move past support or resistance. This was mostly due to a lacklustre fundamental scene.



Technical Outlook

Today we anticipate a break of the channel created between 1.3050 resistance and 1.2880 support but the direction is difficult to predict, given the sideways movement seen lately. Of course the big picture is still very bearish but this doesn’t exclude some bullish movement which can find resistance at the confluence zone created by 1.3120 and the 50 period Exponential Moving Average. On the other hand, a break of 1.2880 will probably trigger a move below 1.2796, thus creating a new low.

Fundamental Outlook

An important event can strongly influence the Pound today: Bank of England Governor Mark Carney will testify today at 9:00 am GMT before the Treasury Select Committee. The main topic will be the Bank of England Financial Stability Report and erratic movement is a distinct possibility during the testimony, so caution is advised.

[GDM_FX]

FOREX NEWS: TIMID BULLISH RETRACEMENTS AHEAD OF KEY BOE RATE DECISION


EUR/USD

Forex News: The pair moved above the 1.1100 barrier yesterday but the climb couldn’t be sustained and price did not continue on an upward path. The economic calendar was light, contributing to the overall lack of determination.



Technical Outlook

The move above the 50 period Exponential Moving Average and the resistance at 1.1100 did not trigger an extended climb and the pair is already showing signs of rejection. This makes us believe that if price moves back below the 50 EMA and closes a candle without long lower wicks, then it will continue until 1.1025 is reached. As an alternate scenario, if the pair remains above the 50 EMA, we expect it to head into 1.1150 and possibly 1.1186.

Fundamental Outlook

We have another slow day ahead, without any major economic releases on the calendar. Price action will be mainly driven by the technical aspect.


GBP/USD

Bank of England Governor Mark Carney mentioned during yesterday’s testimony that “the exchange rate move can help with that adjustment […]” referring to the post-Brexit conditions. This gave the Pound a push and sent the pair above immediate resistance.



Technical Outlook

Price moved above the 50 period Exponential Moving Average and above 1.3119 resistance but overall the picture is still very bearish and the oscillators are approaching overbought. While an extended move to the upside is not impossible, the more price climbs, the probability of a drop increases and we expect the pair to start moving south again soon. The first barrier and potential turning point is represented by 1.3227 but keep in mind that Thursday the Bank of England will announce the interest rate so it’s very possible to see slow price action until then.

Fundamental Outlook

Similar to the Euro and US Dollar, the Pound is not affected today by major economic releases, thus direction will be determined by the technical side.