Technical News | Gdmfx Brokerage | Daily

[GDM_FX]

FOREX NEWS: FED KEEPS RATE UNCHANGED AS EXPECTED, US DOLLAR MOMENTARILY WEAKENS


EUR/USD

Forex News: Price movement was slow ahead of the Fed release and surprisingly, the rate announcement did not create high volatility. The Fed decided to maintain the rate at <0.50% but some hints were offered that a September hike is on the table.



Technical Outlook

At the release time the pair initially dropped to re-test 1.0960 but then soon climbed into the 50 period Exponential Moving Average. This is not necessarily a sign that price will continue to move upwards but if the confluence zone created by the 50 EMA and the resistance at 1.1025 will be broken, we expect more buyers to join in and to take price higher. As long as this resistance zone is intact, we maintain our bearish bias, anticipating a break of 1.0960.

Fundamental Outlook

Today at 12:00 pm GMT, Germany will announce their Preliminary version of the Consumer Price Index. This is considered the main gauge of inflation and because the German economy is an important pillar of the Euro Zone economy, the CPI will have a strong impact on the Euro. The expected change is 0.2% (previous 0.1%) and higher numbers usually strengthen the single currency.


GBP/USD

The Pound-Dollar pair continued its sideways movement for most of yesterday but once the Fed announced the rate decision, price broke above the 50 period Exponential Moving Average.



Technical Outlook

The break of the 50 EMA seen yesterday is likely to extend into 1.3280, but once this target is reached, we expect the bears to take back control or at least try to. Price is currently trapped between 1.3070 and 1.3280 and until one of them is broken, we consider price in a range, without clear direction.

Fundamental Outlook

The United Kingdom didn’t prepare any major economic releases for today, thus the main market mover will be the technical aspect.

[GDM_FX]

FOREX NEWS: EURO TESTS RESISTANCE, POUND STILL IN A RANGE AHEAD OF U.S. GDP


EUR/USD

Forex News: Inflation in Germany improved slightly as shown by yesterday’s Consumer Price Index that posted a change of 0.3% (forecast 0.2%). The pair continued the bullish impulse started a day ago but stopped around 1.1100.



Technical Outlook

Price tested the resistance at 1.1100 but it seems like the bulls are running out of steam, so we are likely to see a bounce into lower territory. The Relative Strength Index and Stochastic are both overbought and this increases the chance of a move south, with the 50 period Exponential Moving Average as target but a clear break above 1.1100 will probably take the pair into 1.1150.

Fundamental Outlook

The main event of the day is the U.S. Advance Gross Domestic Product, scheduled at 12:30 pm GMT and expected to show a big increase of 2.6% from the previous 1.1%. Out of the three versions of the GDP (Advance, Preliminary and Final), this is the first one and tends to have the strongest impact, with higher numbers strengthening the US Dollar.


GBP/USD

The Pound failed to move into 1.3280 and instead reversed, erasing most of the previous gains and confirming the fact that until the channel is broken, the par is still in range mode.



Technical Outlook

The pair is trapped inside the horizontal channel created by 1.3280 resistance and 1.3070 support. This is a wide range in terms of pips but considering the pair’s latest behaviour, it’s still a relatively tight channel and usually, when tight channels are broken, price travels a considerable distance in the direction of the break. Until that happens, our view is neutral and we consider that direction will be decided by the economic indicators scheduled for release today and during the days to come.

Fundamental Outlook

The U.S. Gross Domestic Product will be today’s main market mover for the pair because the United Kingdom didn’t schedule major economic indicators.

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

[GDM_FX]

FOREX NEWS: EURO GAINS AGAINST THE US DOLLAR, POUND STILL HESITANT AHEAD OF MANUFACTURING DATA


EUR/USD

Forex News: Friday the US Dollar weakened against the Euro and the bulls made a clear break of resistance. This was mostly generated by a disappointing reading posted by the Advance version of the U.S. Gross Domestic Product: anticipated 2.6%, actual 1.2%.



Technical Outlook

The level at 1.1150, which acted as strong resistance in the past, is now clearly broken and may turn into support if price returns to test it. Already some rejection is seen around 1.1180 and the oscillators are overbought, so we may see a 30 pip drop into 1.1150 but the short term bias is bullish and price will probably continue towards 1.1240. This view will be strengthened if 1.1150 becomes support.

Fundamental Outlook

At 2:00 pm GMT the U.S. Manufacturing PMI is released, with an anticipated value of 53.1, almost identical to the previous 53.2. This is a survey of purchasing managers from the manufacturing sector that asks respondents to give their opinions on overall business conditions and health of the said sector; usually, higher numbers bring strength to the dollar but the impact is not always substantial.


GBP/USD

The pair remained above the 50 period Exponential Moving Average Friday and even tested 1.3280 resistance on the back of a worse than expected U.S. GDP but a break did not occur.



Technical Outlook

Although the latest impulse is bullish and the pair is trading above the 50 period Exponential Moving Average, the picture is blurry until we will see a break of the horizontal channel created by 1.3280 resistance and 1.3070 support. For today, we expect another touch of the moving average and if price moves below it, a touch of 1.3070 zone is very possible.

Fundamental Outlook

The British Manufacturing PMI is released at 8:30 am GMT. Just like the U.S. indicator with the same name, this survey is derived from the opinions of purchasing managers and usually, higher numbers than the forecast 49.1 generate strength for the Pound.

[GDM_FX]

FOREX NEWS: US DOLLAR FIGHTS BACK AS BOTH PAIRS BOUNCE AT RESISTANCE


EUR/USD

Forex News: The pair had a very slow and slightly bearish session yesterday, without threatening resistance or support. The U.S. Manufacturing data came out close to analysts’ expectations thus the event did not create strong movement.



Technical Outlook

The pair is now headed towards 1.1150, with the Stochastic and Relative Strength Index just exiting overbought territory, heading down. This suggests that if 1.1150 cannot reject price higher and a break happens early in the day, we will see a touch of 1.1100. On the other hand, if 1.1150 turns into support and the pair bounces off of it, we expect a break of 1.1186 and a consequent move into 1.1240 during the next days.

Fundamental Outlook

The economic calendar lacks major events for the Euro and US Dollar, a thing that may generate another slow and ranging trading session.


GBP/USD

British manufacturing data disappointed yesterday but the impact on the Pound wasn’t tremendous. The pair dropped lower after a bounce at 1.3280.



Technical Outlook

Price action stopped at the 50 period Exponential Moving Average but it also bounced at 1.3280 resistance. This shows that control doesn’t clearly belong to either side and that the pair is still in a ranging environment. Usually when price is inside a horizontal channel, it bounces from side to side so if the 50 EMA is breached, we expect a move into 1.3070.

Fundamental Outlook

Today the British PMI series continues with the release of the Construction PMI, scheduled at 8:30 am GMT and expected to show a value of 44.2 (previous 46.0). This survey of purchasing managers acts as a leading indicator of economic health and can strengthen the Pound if it shows a better reading than analysts’ forecast. Usually the impact is not strong but this can change if the actual number differs substantially from expectations.

[GDM_FX]

FOREX NEWS: FIRST LOOK AT U.S. EMPLOYMENT DATA: BOOST OR BUST?


EUR/USD

Forex News: The bulls continued their assault yesterday and the US Dollar lost the short term battle as the resistance at 1.1180 was broken.



Technical Outlook

Despite the Relative Strength Index and Stochastic being overbought, the pair continued higher after a small retracement and broke 1.1186 decisively. The bullish run started at 1.0960 looks now overextended but we believe it will reach the zone around 1.1240 and there we expect a deeper retracement or possibly even a reversal.

Fundamental Outlook

Today at 12:15 pm GMT we take a first look into U.S. employment situation with the release of the ADP Non-Farm Employment Change. This report tracks changes in the number of employed people during the previous month but does not include the farming sector and government jobs. It is less important than the Non-Farm Payrolls released 2 days after but still, higher numbers than the anticipated 171K can strengthen the US Dollar.


GBP/USD

The Pound finally broke out of the horizontal channel that confined it for the last period and the pair travelled more than 150 pips north, generating a clearly bullish session.



Technical Outlook

After another bounce on the 50 period Exponential Moving Average, the pair is finally out of the horizontal channel created between 1.3070 support and 1.3280 resistance. Usually after a breakout, price continues in the initial direction but all that remains to be seen is whether the break is a true one or not. If price doesn’t return inside the horizontal channel, we will likely see a touch of 1.3480, otherwise the moving average is the next target.

Fundamental Outlook

At 8:30 am GMT the last British PMI in this week’s series is released. This one is focused on the Services sector and is derived from the opinions of purchasing managers regarding the health of said sector. The anticipated number is 47.4, same as previous and higher numbers are beneficial for the Pound.

[GDM_FX]

FOREX NEWS: POUND UNDER FIRE: RATE CUT EXPECTED


EUR/USD

Forex News: The bullish attack on resistance was stopped yesterday by the US Dollar that made a comeback, aided by a slightly better than anticipated reading posted by the ADP Non-Farm Employment Change.



Technical Outlook

Price action came in close vicinity of 1.1240 resistance but the move was already overextended and as we expected, a bearish retracement has begun. The overbought condition of the Stochastic and Relative Strength Index contributed to the drop and now we expect the pair to touch 1.1150 and probably the 50 period Exponential Moving Average. Although we favor short term moves south, the pair is in a bullish environment as long as it remains above the 50 EMA.

Fundamental Outlook

The economic calendar is light for both the Euro and US Dollar so the technical aspect will be the main market mover.


GBP/USD

The US Dollar erased yesterday some of the losses incurred earlier but the pair remained above 1.3280 although the employment situation in the United States has improved.



Technical Outlook

It looks like the bears are trying to move the pair back below 1.3280; the contributing factors are the position of the two oscillators, which have reached overbought, and the fact that the US Dollar was boosted by optimistic jobs data. However, today’s price direction will be mainly affected by BOE’s decision regarding the interest rate, so the technical aspect will be secondary.

Fundamental Outlook

At 11:00 am GMT the Bank of England will announce their rate decision, will release a Monetary Policy Summary and also a breakdown of the MPC members’ votes on whether to cut or hold the rate. Most analysts anticipate a rate cut today, from the current 0.50% to 0.25% and if this comes true, the Pound will likely weaken against its counterparts. Even if the rate stays the same, we expect high volatility but if the BOE decides to cut it, we recommend extreme caution.

[GDM_FX]

FOREX NEWS: CLOSING THE WEEK WITH A BANG: U.S. NON-FARM PAYROLLS


EUR/USD

Forex News: Yesterday the pair returned below 1.1150 and re-tested the 50 period Exponential Moving Average, completing a predicted bearish retracement.



Technical Outlook

Currently the bears are struggling to break the 50 period Exponential Moving Average but rejection is clearly seen. A move back above 1.1150 would mean that yesterday’s behaviour was just a retracement in a bullish environment, but a break of the EMA will make the short term bias bearish; however, today’s technical aspect will be overshadowed by the fundamental and direction will be decided by the U.S. jobs data.

Fundamental Outlook

At 12:30 pm GMT the most important U.S. report of the week comes out: the Non-Farm Employment Change (or Non-Farm Payrolls). A big decrease is anticipated, from the previous 287K to 180K and if the actual number is lower than the forecast, the US Dollar is likely to weaken. A figure above forecast would show increased economic activity and thus will probably strengthen the greenback.


GBP/USD

The Bank of England decided to cut the interest rate from 0.50% to 0.25% as it was anticipated and this generated a huge drop that took price close to support.



Technical Outlook

The drop seen yesterday is attributed to the rate cut and we will probably see more downside movement. The first target is the support at 1.3070 but we expect slight retracements to the upside, possibly into the 50 period Exponential Moving Average. Just like in the case of the EUR/USD, we expect the fundamental aspect to decide today’s direction.

Fundamental Outlook

The United Kingdom didn’t schedule major news releases but the U.S. jobs data will hold today’s headlines and will generate increased volatility.

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