Technical News | Gdmfx Brokerage | Daily

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FOREX NEWS: BOE EXPECTED TO CUT RATE TO COPE WITH BREXIT AFTERMATH


EUR/USD

Forex News: The pair didn’t show clear direction yesterday and it seems like the majority of investors are waiting for the economic events released later in the week before choosing a side.



Technical Outlook

Price is currently trading above the 50 period Exponential moving Average and above 1.1100 but lacks a clear bias and all moves are quickly reversed. This type of behaviour will probably end with a breakout followed by an extended move in that direction but so far the market is in indecision mode and the next direction is difficult to predict. The levels to watch are 1.1025 as support and 1.1150 as resistance but keep an eye on the economic releases because those may have a strong impact.

Fundamental Outlook

At 12:30 pm GMT the American Producer Price Index comes out and is expected to show a 0.3% change from the previous 0.4%. This indicator tracks changes in the price that producers charge for their goods and services and can have inflationary implications because a higher producer price usually leads to a higher price paid by consumers. Figures above expectations for this indicator trigger US Dollar strength but this is just the rule of thumb and the impact of each release may differ.


GBP/USD

The Pound-Dollar moved sideways after an initial bullish impulse and remained above the Moving Average. However, movement was sluggish and a big part in this was played by the fact that market participants are waiting for BOE’s rate decision and are afraid to choose a direction.



Technical Outlook

Price moved above the 50 period Exponential Moving Average and above the level at 1.3227 but it seems like the bullish move is close to being exhausted so we expect a drop below the mentioned technical levels. Considering today’s huge announcement, the technical aspect is secondary, volatility may increase and price may move erratically. Extreme caution is advised!

Fundamental Outlook

The Bank of England (BOE) is expected to cut rates from 0.50% to 0.25%. If this comes true, the Pound is likely to drop further but of course, this is not a certainty and the pair may react differently than expected, depending on how market participants will interpret BOE’s decision. The event is scheduled at 11:00 am GMT and is accompanied by a breakdown of the members’ votes as well as a Monetary Policy Summary, which will contain details of the reasons that determined the rate decision.

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FOREX NEWS: BOE MAINTAINS RATE UNCHANGED, POUND CLIMBS SIGNIFICANTLY


EUR/USD

Forex News: The pair climbed yesterday ahead of the U.S. Producer Price Index but the better than expected value of the indicator brought back some of the US Dollar’s strength and most of the gains were erased.



Technical Outlook

The resistance at 1.1150 was breached yesterday but price soon bounced lower, so this level is still valid. If early in today’s session the pair descends below 1.1100 and the 50 period Exponential Moving Average, we expect more bears to step in and take price close to 1.1025 support. On the other hand, a clear break of 1.1150 will open the door for a move into 1.1240.

Fundamental Outlook

Today is a busy day for the US Dollar that starts with the CORE version of the Consumer Price Index, scheduled at 12:30 pm GMT. The indicator tracks changes in the price that consumers pay for the products they purchase and this version excludes food and energy from calculation. The expected change is 0.2%, same as last month, and higher numbers usually strengthen the greenback.

At the same time (12:30 pm GMT) the US Retail Sales are released, expected to show a 0.1% change from the previous 0.5%. Since sales made at a retail level represent a major part of the entire consumer spending, higher numbers also strengthen the US Dollar.

The last event of the day is the University of Michigan Consumer Sentiment survey, scheduled at 2:00 pm GMT and expected to show a value of 93.7, almost the same as the previous 93.5. Consumer sentiment is indicative of future consumer spending, thus higher numbers show optimism and strengthen the US Dollar.


GBP/USD

The Bank of England decided to maintain the rate at 0.50% and this strengthened the Pound during yesterday’s trading session, making it reach resistance.



Technical Outlook

The key levels for short term price action are 1.3119 (1.3120) as support and 1.3483 as resistance; a break of either one may trigger an extended move in that direction. BOE’s decision to maintain rates unchanged will probably extend its effects during today’s trading session so we expect price to climb above resistance but keep in mind that the US Dollar will also be affected by a lot of indicators today.

Fundamental Outlook

Bank of England governor Mark Carney will speak today in Toronto about the financial climate and this appearance may trigger increased volatility on Pound pairs, especially if he will drop hints about the next rate change. The event is scheduled at 12:00 pm GMT and caution is advised.

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

[GDM_FX]

FOREX NEWS: SUPPORT THREATENED AS BEARS RE-ENTER THE MARKET


EUR/USD

Forex News: The U.S. Retail Sales released Friday showed a positive change of 0.6% while the forecast was just 0.1% and this brought strength to the greenback, taking the pair into support.



Technical Outlook

The pair bounced once more at 1.1150 resistance and is now trading below the 50 period Exponential Moving Average; also the oscillators are headed downwards but not oversold and all these signs point towards a break of 1.1025 support zone. If this happens today, we expect the pair to move into 1.0960 zone and as an alternate scenario, a bounce higher will probably find resistance at the 50 period Exponential Moving Average.

Fundamental Outlook

We have a lacklustre fundamental environment today as no major announcements are scheduled. Price action might be slow and ranging as a result.


GBP/USD

Friday the bears managed to take price below support, mostly on the back of better than expected U.S. data. This erased all the gains made by the Pound Thursday when the BOE decided to keep the rate at 0.50%.



Technical Outlook

Currently the pair is trading below the 50 period Exponential Moving Average and below 1.3227 but has bounced at 1.3119 support. Today we expect a re-test of this support and the way price behaves there will probably decide the direction for the day: a break will probably take price into the zone around 1.3050, while a bounce and a move above the 50 EMA will open the door for another re-test of 1.3483 during the days to come.

Fundamental Outlook

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

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FOREX NEWS: GERMAN ZEW, BRITISH INFLATION DATA TO TRIGGER LARGER SWINGS


EUR/USD

Forex News: Yesterday’s price action was incredibly slow and mostly sideways. This was mostly due to the lack of major economic releases.



Technical Outlook

The movement seen yesterday doesn’t reveal a lot of clues about future direction but the pair is still trading below the 50 period Exponential Moving Average and this tilts the balance slightly towards the short side. A break of 1.1025 will likely trigger a move into 1.0960, while a move above the 50 EMA and above 1.1100 resistance will probably take the pair into 1.1150 again.

Fundamental Outlook

We have a busier day than yesterday, starting with the German ZEW Economic Sentiment scheduled at 9:00 am GMT. This is a survey of about 275 German professional analysts and investors that tries to gauge their assessment of a 6-month economic outlook. The expected figure is 8.2 (previous 19.2) and higher numbers suggest optimism, usually strengthening the Euro.

At 12:30 pm GMT the U.S. Building Permits are released, and expected to show a figure of 1.15M (previous 1.14M). These are annualized numbers and better values can strengthen the US Dollar because the construction sector is an important part of the U.S. economy.


GBP/USD

The Pound also had a slow day, without major new developments and the pair lingered close to the 50 period Exponential Moving Average for the most part of the day.



Technical Outlook

The pair is now trading closely above the 50 period EMA but movement is slow and without a clear bias. The latest strong impulse is bearish and we expect it to continue until 1.3119 is tested again but this will depend a lot on today’s economic indicators. If the Pound strengthens, we don’t expect the resistance at 1.3483 to be broken.

Fundamental Outlook

British inflation data is released today at 8:30 am GMT in the form of the Consumer Price Index (CPI). A small increase to 0.4% from the previous 0.3% is expected and because inflation is currently considered too low, higher numbers will most likely strengthen the Pound. As always, the U.S. indicators will have a direct impact on the pair as well.

[GDM_FX]

FOREX NEWS: US DOLLAR GATHERS MOMENTUM, THREATENS SUPPORT


EUR/USD

Forex News: The U.S. Building Permits numbers matched analysts’ expectations but the German ZEW Economic Sentiment survey disappointed by showing a -6.8 reading (anticipated 8.2). This weakened the Euro and took the pair lower.



Technical Outlook

The 50 period Exponential Moving Average was touched yesterday but the bulls lacked the strength to break it and the pair soon dropped below 1.1025 support. The break is not a clear one and so far both sides lack the conviction necessary for a strong breakout. If today the pair remains below 1.1025, we expect the bears to make a run for 1.0960, otherwise the 50 EMA is the first bullish target.

Fundamental Outlook

The day lacks major economic indicators for the US Dollar and Euro so we expect the technical side to be the main market mover. We may see a slow day based on the lack of news releases.


GBP/USD

Yesterday’s action was slow but the pair moved lower for the most part of the day. The British CPI showed improvement but not enough to trigger Pound strength.



Technical Outlook

The pair reached the zone around 1.3120 and is now trading below the 50 period Exponential Moving Average but a clear breakout did not occur. Once price moves below 1.3120 and re-tests it from below, then we can consider this level resistance and we expect a drop into 1.2880 during the days to come.

Fundamental Outlook

Today at 8:30 am GMT we take a look into the British unemployment situation with the release of the Claimant Count Change. This indicator shows changes in the number of individuals that asked for social help due to their unemployed status and usually a higher reading is indicative of decreased economic activity, weakening the Pound. For today’s release the expected figure is 4.1K (previous -0.4K)

[GDM_FX]

FOREX NEWS: EURO IN THE SPOTLIGHT AS ECB RATE DECISION LOOMS


EUR/USD

Forex News: The euro-dollar pair wasn’t affected by major economic releases yesterday and movement was mixed, with a dip below support and a move back towards the opening of the session.



Technical Outlook

Price moved below 1.1025 and then returned to re-test the broken support; if here price will be rejected lower, then we can consider that 1.1025 has turned into resistance and we expect the pair to move lower. If price doesn’t bounce and instead continues higher, we anticipate a touch of the 50 period Exponential Moving Average. Keep in mind that today the technical aspect will be secondary to the fundamental due to the ECB rate announcement.

Fundamental Outlook

At 11:45 am GMT the European Central Bank will announce their rate decision and although no change is forecast (currently 0.00%), volatility will surely increase. Later at 12:30 pm GMT, ECB President Mario Draghi will hold the usual press conference during which he will offer insights into the rate decision and will answer journalists’ questions. This is known to be a major market mover and caution is always advised because price action is often irregular.


GBP/USD

The British unemployment situation showed improvement yesterday and as a result the pair climbed above 1.3119 and into the 50 period Exponential Moving Average, generating a bullish session.



Technical Outlook

Traders still lack a clear bias and as a result the pair reverses direction often. If today we will see a climb above the 50 period Exponential Moving Average, maybe more buyers will join in, taking price higher. The oversold condition of the Stochastic favours such a scenario but is not a sure indication that price will climb. The fundamental aspect will play an important role in today’s direction.

Fundamental Outlook

The British Retail Sales numbers come out at 8:30 am GMT and this will be the main event of the day for the Pound. The indicator shows changes in the total value of sales made at retail levels and is expected to post a figure of -0.4%, while the previous was 0.9%. Lower numbers are indicative of decreased consumer spending and this usually leads to a weaker Pound.

[GDM_FX]

FOREX NEWS: EURO WEAKENS, POUND STILL IN RANGE MODE AHEAD OF MANUFACTURING AND SERVICES DATA


EUR/USD

Forex News: The European Central Bank kept the rate unchanged, as it was expected and Mario Draghi’s press conference created a whipsaw where price moved higher just to reverse almost immediately.



Technical Outlook

Movement during yesterday’s press conference was pretty strong but lacked clear direction and now we can see rejection off of the 50 period Exponential Moving Average. Price returned below 1.1025 and is now headed for the low at 1.0980 but considering the choppy movement seen lately, we expect it to bounce higher once this lower target is reached. As long as the pair remains below the 50 period EMA, our bias is bearish, anticipating a touch of 1.0960 zone.

Fundamental Outlook

The German Manufacturing PMI is released today at 7:30 am GMT and is expected to show a value of 53.6 (previous 54.5). This is a medium impact indicator that usually doesn’t create strong movement but under normal circumstances, a higher reading than the forecast strengthens the Euro.


GBP/USD

The Pound was hit yesterday by a -0.9% change for the Retail Sales and the pair dropped for about 100 pips as a result; however, some of the losses were erased later in the session and overall the pair had mixed movement.



Technical Outlook

Price is ranging between 1.3227 and 1.3119 or briefly exits the channel and then returns inside. This type of movement usually predicts that a strong breakout will occur but the direction is hard to anticipate. Until one of the mentioned levels is broken and then re-tested, we have a neutral bias on the pair and we turn our attention towards the economic releases because these will probably decide direction.

Fundamental Outlook

At 8:30 am GMT the British Manufacturing and Services PMIs are released, attempting to gauge the opinions of purchasing managers from the respective sectors regarding economic health post Brexit referendum. The expected figure for the Manufacturing PMI is 47.8 (previous 52.1) while for the Services sector the forecast is 48.9 (previous 52.3). Higher numbers usually strengthen the Pound and the opposite is true for lower numbers.

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

[GDM_FX]

FOREX NEWS: BEARS BACK IN THE MARKET, SUPPORT THREATENED


EUR/USD

Forex News: Friday’s economic data matched analysts’ expectations and didn’t have a strong impact on the market but the US Dollar strengthened and took the pair into the support at 1.0960.



Technical Outlook

Friday’s move was stronger than what we’ve seen lately and this often calls for a retracement to the opposite side. If price bounces here, we don’t expect it to reach 1.1025, which is now resistance, and instead we favour the short side after the said retracement completes. The Euro will be affected by economic releases and we expect this to be a deciding factor as far as direction is concerned.

Fundamental Outlook

Today at 8:00 am GMT the German IFO Business Climate survey is released and anticipated to post a value of 107.7, slightly lower than last month’s 108.7. Although this is not known to be a huge market mover, lower numbers usually weaken the Euro because the survey acts as a leading indicator of economic health and is based on the opinions of 7,000 businesses regarding business conditions and a 6-month outlook.


GBP/USD

Friday the bears got the upper hand and drove the pair into support, below the 50 period Exponential Moving Average. Economic data was mixed, with the British Manufacturing PMI showing better values than expected but the Services sector disappointed.



Technical Outlook

Recent price action created resistance at 1.3280 and support at 1.3070; we expect the latter to be broken today, after a brief retracement to the upside. This potential retracement can find resistance at the 50 period Exponential Moving Average where we expect bearish movement to resume and the pair to move below 1.3070.

Fundamental Outlook

The Pound has a slow day for economic releases, so direction will be decided by the technical aspect. Due to the lack of economic indicators, we may see a slow, ranging session.

[GDM_FX]

FOREX NEWS: RANGING MARKETS AHEAD OF U.S. CONSUMER CONFIDENCE SURVEY


EUR/USD

Forex News: Price action yesterday was rather slow but the Euro got a small boost from a better than expected value of the German IFO survey so the pair climbed. However, resistance was not threatened and no major developments took place.



Technical Outlook

The pair bounced at 1.0960 support but the “mini” downtrend that started after the rejection seen at 1.1150 is still intact and this makes us anticipate a break of support, probably today. The biggest candle of yesterday’s trading session shows a relatively long upper wick and this is a sign of rejection that strengthens our opinion that a move lower will follow. If 1.0960 is broken, the next target is the zone around 1.0900, otherwise the 50 period Exponential Moving Average will likely cap upside movement.

Fundamental Outlook

Today at 2:00 pm GMT the U.S. Consumer Confidence is released. This is a survey that has a large sample of about 5,000 households and tries to gauge the relative level of confidence in overall economic conditions from the consumer’s standpoint. Usually, higher numbers than the anticipated 95.6 are beneficial for the US Dollar, suggesting that consumer spending will increase in the near future.


GBP/USD

Yesterday’s trading session was incredibly slow and choppy, mostly due to the lack of major economic releases for the US Dollar and Pound alike.



Technical Outlook

Yesterday’s price action doesn’t offer a lot of clues about future direction but we maintain our view that a break of 1.3070 is next. The pair is still trading below the 50 period Exponential Moving Average and the predicted retracement occurred yesterday (although it was very small); this favours a break of support but given the lack of conviction, a move up is not out of the question. If this happens and the 50 EMA is broken, we expect the bullish impulse to stop around 1.3280.

Fundamental Outlook

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

[GDM_FX]

FOREX NEWS: FED ANNOUNCES RATES, US DOLLAR POISED FOR BREAKOUTS


EUR/USD

Forex News: Movement was bullish yesterday ahead of the U.S. Consumer survey but a better value posted by this indicator, fuelled the US Dollar and created a bounce at resistance.



Technical Outlook

The 50 period Exponential Moving Average and the resistance at 1.1025 were touched yesterday but the bulls ran out of steam and now rejection is clearly present. This means that we are likely to see another attempt to break the support at 1.0960 but today’s price action will be heavily influenced by the Fed rate announcement.

Fundamental Outlook

At 12:30 pm GMT the U.S. Durable Goods Orders come out, expected to show a change of -1.1% compared to the previous -2.3%. Goods with a life expectancy of at least 3 years are considered “durable” and more orders for such goods usually suggest that economic activity is picking up and this often strengthens the US Dollar.

Later in the day, at 6:00 pm GMT, the most important event of the week is scheduled: the Fed rate announcement and the FOMC Rate Statement. The current rate is <0.50% and this is not expected to change today but we will probably see increased volatility nonetheless; also the Rate Statement is likely to contain hints about future rate changes and this is another reason for strong movement.


GBP/USD

The Pound wasn’t affected by major news releases yesterday but price action was mostly bullish before the release of the U.S. survey which brought the pair slightly lower.



Technical Outlook

Price bounced at the 50 period Exponential Moving Average but movement is still slow and without clear direction. We maintain our bearish bias as long as the pair is trading below the 50 EMA but we don’t exclude a move into 1.3280 if the moving average is broken. The fundamental side will be the main market mover today.

Fundamental Outlook

Before the major U.S. announcement, the British Preliminary Gross Domestic Product is released and expected to show a change of 0.5% from the previous 0.4%. The GDP is an economy’s main gauge of performance, thus higher values usually strengthen the Pound. The time of the release is 8:30 am GMT.