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Forex Forum to Share, Discuss, Communicate and Trade Forex • Weekly Commentary | Gdmfx | Technical
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Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jun 19, 2017 1:39 pm
by GDMFX
WEEKLY ANALYSIS: RANGE-BOUND TRADING CONTINUES AMID A LACKLUSTER FUNDAMENTAL SCENE


EUR/USD

Weekly Analysis: Last week’s main story was the Fed rate hike from <1.00% to <1.25% but also the hawkish Fed press conference. The positive vibe that surrounded the US Dollar reversed an earlier climb towards 1.1300 and brought the pair into 1.1100 territory.

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Technical Outlook

After reaching a weekly high at 1.1295 the pair dropped close to 1.1120 support and now the greenback is benefiting from a positive market sentiment. We expect to see an encounter with 1.1120 and the 50 days Exponential Moving Average early in the week but the pair is still in an uptrend, so once the 50 EMA is reached, we may see another push to the north. However, as long as last week’s high is not broken, our bias is bearish, aiming for a move into 1.1000 territory.

Fundamental Outlook

The week ahead is surprisingly slow in terms of economic releases for both currencies in the pair. Monday and Tuesday we don’t have anything major on the economic calendar, while Wednesday’s only notable release is the U.S. Existing Home Sales. A higher than anticipated reading shows a healthy house market and this usually strengthens the US Dollar.

Thursday the focus shifts on the Euro for the release of the Eurozone Consumer Confidence, a survey that gauges the opinions of about 2,300 European citizens regarding economic conditions. Friday the center stage is taken by Purchasing Managers’ Indexes, namely the German Services and Manufacturing PMIs as well as the Eurozone Services and Manufacturing PMIs. On the US Dollar side we have the New Home Sales, an indicator that shows the annualized number of houses sold during the previous month.


GBP/USD

The pair has just completed a very choppy week, with price bouncing all over the place, especially in the later part of the week. The Bank of England has kept the rate unchanged but 3 out of the 8 MPC Members voted for an increase and this generated Pound strength.

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Technical Outlook

The last three Daily candles are showing long wicks and rejection at the 50 period Exponential Moving Average. This is a sign of indecision and lack of determination from both sides; the bulls cannot break the 50 EMA and the bears cannot take price lower. Due to these factors, our outlook is mostly neutral until a clear direction is established. However, it must be noted that the 50 period EMA and the level at 1.2770 form together a confluence zone of resistance, which may push price lower during the early stages of the week.

Fundamental Outlook

The Pound has an even slower fundamental week than the Euro and US Dollar, and the only notable indicator is the Public Sector Net Borrowing, scheduled Wednesday. The indicator shows the difference between spending and income for the Public Sector and a figure above zero indicates deficit, while a figure below zero shows excess. Lower numbers for this indicators are usually beneficial for the currency but the impact is often limited.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jun 26, 2017 6:30 am
by GDMFX
[b]WEEKLY ANALYSIS: YELLEN, DRAGHI, CARNEY: THE THREE MAJOR PLAYERS HAVE A FULL WEEK AHEAD[/b]


EUR/USD

Weekly Analysis: Last week the bears attempted to break support but the US Dollar strength faded and the pair started to move north, erasing almost all the losses incurred earlier in the week. Overall we had a neutral week, with price finishing close to where it started.

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Technical Outlook

After a perfect touch of 1.1120 support, the pair bounced higher and erased the entire drop. This is the second time that 1.1120 clearly rejects falling prices and the pair is still trading above the 50 days Exponential Moving Average, so the bias remains bullish, anticipating a touch of 1.1240 and possibly 1.1280.

If price drops lower, it will encounter a strong support zone because the 50 EMA is climbing and together with 1.1120 will create a confluence zone. As long as the pair is trading above horizontal support and above the 50 days EMA, our outlook is bullish.

Fundamental Outlook

The week starts with the release of the German IFO Business Climate survey and the U.S. Durable Goods Orders, both scheduled Monday. These indicators are considered high-impact but lately their influence on the respective currency has diminished and a strong impact can only be seen if the actual number differs significantly from expectations.

Tuesday ECB President Draghi will deliver a speech in Portugal, at the European Central Bank Forum on Central Banking and later in the day, Fed Chair Janet Yellen will speak in London about the global economy, at the British Academy 'President's Lecture'.

Wednesday ECB President Draghi will participate in a panel discussion at the European Central Bank Forum on Central Banking, in Portugal. Thursday we take a look at German inflation with the release of the Preliminary Consumer Price Index, and on the US Dollar side we have the Final version of the U.S. Gross Domestic Product. The Final version is the least important out of the three (Advance, preliminary and Final), but its impact shouldn’t be overlooked.

Friday no high-impact indicators will be released but worth noting are the German Retail Sales, and Chicago Purchasing Managers’ Index, both with a medium impact on their respective currencies.


GBP/USD

The Pound had an interesting week, first weakening when BOE Governor mentioned that a rate hike is not likely to come very soon, and then erasing some of the losses on the back of hawkish comments made by a member of the Monetary Policy Committee.

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Technical Outlook

Although the pair climbed during the latter part of last week, the bias remains bearish as long as price is trading below 1.2770 and below the 50 days Exponential Moving Average. Early this week, we expect to see a touch of the two resistance elements just mentioned and the way price behaves there, will decide the next move. A break would show increased bullish pressure and would make 1.2850 the first target, while a bounce would probably take the pair into 1.2570 – 1.2550.

Fundamental Outlook

Tuesday the Bank of England will release the Financial Stability Report, followed shortly by a press conference held by BOE Governor Mark Carney. This has the potential to be the biggest event this week for the Pound, so caution is recommended. Wednesday BOE Governor Carney will participate in a panel discussion at the European Central Bank Forum on Central Banking and this is another reason for possibly strong movement.

The Net Lending to Individuals will be released Thursday and Friday the Current Account comes out, showing the difference in value between imports and exports. The same day the British Final GDP comes out, but this version usually has a low impact on the currency.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jul 03, 2017 1:37 pm
by GDMFX
WEEKLY ANALYSIS: US DOLLAR IN THE SPOTLIGHT: NON-FARM PAYROLLS AND FOMC MINUTES


EUR/USD

Weekly Analysis: The Euro experienced a huge boost coming from Draghi’s hawkish comments made at the European Central Bank Forum, so the pair moved higher for the entire last week, breaking several resistance levels.

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Technical Outlook

The strong move seen last week has renewed the uptrend and took the pair out of the choppiness it was in. Now the picture is bullish once again and the pair is trading above several broken resistance levels, which may turn into support this week. The resistance at 1.1450 is a key level that reversed rising prices in the past and the Relative Strength Index is overbought, so we must be wary of a pullback this week. The first potential support is located at 1.1350 but keep in mind that the US Dollar will be affected by important events this week.

Fundamental Outlook

The week starts pretty slow, with the release of the U.S. Manufacturing PMI scheduled Monday and followed Tuesday by a major Holiday: the U.S. Independence Day. American banks will be closed and volatility will be affected.

Wednesday the Fed will release the FOMC Minutes of their latest Meeting, revealing the reasons that stood behind the latest rate vote and Thursday we take a first look at the U.S. jobs market with the release of the ADP Non-Farm Employment Change.

Friday will probably be the busiest day of the week because the Group of 20 (G20) Meetings start and also the US Dollar will be heavily affected by the Non-Farm Payrolls, a report that is widely considered the most important U.S. jobs data.


GBP/USD

US Dollar weakness and hawkish comments made by BOE Governor Mark Carney generated a very strong week for the Pound and took the pair more than 300 pips higher.

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Technical Outlook

The Sterling is clearly winning the battle against the US Dollar but the pair is facing a strong resistance at 1.3050 and the Relative Strength Index is very close to overbought territory. These facts make us anticipate a pullback once 1.3050 is reached; even if the level is broken, a retracement lower should soon follow. The next resistance is located at 1.3430 (observed better on a Weekly chart) but we don’t expect price to travel that entire distance this week.

Fundamental Outlook

This week will be mainly dedicated to the British PMI series. These are surveys that try to gauge the opinions of purchasing managers from each sector regarding economic conditions and overall health of the respective sector. The Manufacturing PMI is released Monday, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. British representatives will attend the G20 Meetings that start Friday so the Pound may be affected by the talks.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jul 10, 2017 1:46 pm
by GDMFX
WEEKLY ANALYSIS: MARKETS PREPARE FOR FED CHAIR YELLEN’S TESTIMONY


EUR/USD

Weekly Analysis: Last week the pair retraced lower, mostly due to overbought condition but after failing to break support, it returned to the levels seen in the beginning of the week. U.S. employment data was solid and brought the pair lower for the end of the week.

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Technical Outlook

The pair is showing rejection again near 1.1450 resistance and the NFP report showed a better than anticipated reading, so its effects will be probably seen throughout this week. The pair is in a clear uptrend but for the short to medium term we expect to see a move into 1.1300 – 1.1280, mostly because the bulls failed twice to break the key resistance at 1.1450. However, if that resistance will be broken early in the week, we may see a move into 1.1500 but Fed Chair Yellen’s testimony is likely to decide the next move.

Fundamental Outlook

The week starts slow, with the first two days lacking any major events. Action picks up Wednesday when Fed Chair Yellen will testify before the House Financial Services Committee on the topic of the Semiannual Monetary Policy Report. Thursday she will testify on the same topic but this time before the Senate Banking Committee and the same day the U.S. Producer Price Index is released.

Friday the always important U.S. Consumer Price Index comes out, showing changes in the price paid by consumers for the goods and services they purchase and the final event of the week will be the U.S. Retail Sales. The Euro doesn’t have anything major on the calendar but the U.S. releases are considered high impact so we expect to see volatility throughout the week.


GBP/USD

Last week belonged to the bears after another failed attempt to move above 1.3050 resistance. Later in the week, the U.S. jobs data added more strength to the greenback and now the pair is approaching support.

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Technical Outlook

The bullish move seen over the last weeks failed to break 1.3050 resistance and now the pair is moving south, with an overbought Stochastic and good downside momentum. The short term outlook is bearish, anticipating a touch of the support at 1.2850 and the 50 days Exponential Moving Average; if this barrier is broken, the next target will become 1.2770 but on the other hand, a break will probably generate a climb into 1.3000 area.

Fundamental Outlook

The Sterling has a very slow economic week ahead, with the only notable indicator being the Average Earnings Index, released Wednesday. The index shows changes in the price that businesses and government pay for labor and usually has a high impact on the currency. Of course, the U.S. events will have a direct impact on the pair’s movement, as always.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jul 17, 2017 1:15 pm
by GDMFX
WEEKLY ANALYSIS: THE EUROPEAN CENTRAL BANK TAKES CENTER STAGE: INTEREST RATE DECISION AND PRESS CONFERENCE


EUR/USD

Weekly Analysis: The bulls remained in control and the pair closed last week strongly, on the back of a US Dollar sell-off triggered by weak inflation and retail sales data. However, Friday’s climb couldn’t take out the weekly top at 1.1490.

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Technical Outlook

Price is now facing a cluster of resistance levels (1.1450 – 1.1490) and the uptrend is overextended, meaning that the pair travelled a long distance without a proper pullback. The Relative Strength Index first became overbought back in April and since then, it never visited the lower levels (now it is approaching overbought on a Weekly chart as well).

All this makes us anticipate a retracement this week, and possibly an encounter with 1.1350, followed by the 50 days EMA. However, it is very important to note that the pair is in a strong uptrend and the RSI has been overbought for a long time and price still continued higher, so the possibility of another bullish week shouldn’t be overlooked. Next strong resistance is in the 1.1600 area.

Fundamental Outlook

The first notable release of the week is the European Final version of the Consumer Price Index, scheduled Monday. Although this version is the least important out of the three, the CPI remains a high impact indicator because it’s the main gauge of inflation for the Eurozone.

Tuesday the only highlight for the Euro will be the release of the German ZEW Economic Sentiment, a survey of about 275 German investors and analysts, focused on their 6-month outlook for the economy. Lately this indicator has lost some of its impact but higher numbers suggest optimism and strengthen the Euro.

Wednesday is a slow day, with the only release being the U.S. Building Permits, an indicator that shows how many permits for new buildings were released during the previous month. It offers some insights into the U.S. house market but the impact is not always high.

Thursday may be the most volatile day of the week as the ECB meets to announce their interest rate and ECB President Mario Draghi will hold his usual press conference. The rate is not expected to change but the press conference usually triggers strong movement, especially if Draghi will offer hints about the next hike.


GBP/USD

After a brief dip below the 50 days Exponential Moving Average, the bulls took control and finished the week more than 200 pips above the open. Most of the climb was generated by weak U.S. CPI and Retail Sales data.

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Technical Outlook

The resistance at 1.3050 was an important level and the breakout seen last week is likely to generate an extended move to the upside. The next resistance is located around 1.3250, followed by 1.3350 and the key level at 1.3450 but price will most likely retrace lower before the first resistance is reached. It’s also very possible to see a re-test of the recently broken resistance and if this re-test is successful (price bounces at 1.3050), then the level will turn into support and the chances of an extended climb will increase.

Fundamental Outlook

The Pound will be affected by only two important releases this week. The first is the British Consumer Price Index, which is scheduled Tuesday and the second is the Retail Sales, coming out Thursday. The CPI is the main gauge of inflation and is closely watched by the Bank of England when they decide the interest rate; on the other hand, sales made at retail levels represent the majority of consumer spending, which in turn accounts for a large part of the entire economic activity, so we can expect to see strong movement when these indicators are released.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jul 24, 2017 1:47 pm
by GDMFX
WEEKLY ANALYSIS: HIGHLIGHTS OF THE WEEK AHEAD: FOMC RATE DECISION AND U.S. GROSS DOMESTIC PRODUCT


EUR/USD

The pair posted a strongly bullish week and moved above last year’s high located at 1.1616 on the back of a hawkish Draghi press conference but also due to US Dollar heavy selling.

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Technical Outlook

After the break of 1.1450 resistance the bulls regained total control over the pair and broke last year’s high, threatening 1.1713, which is the highest level since August 2015. The outlook remains bullish but the Relative Strength Index has become overbought on a Daily chart and even on a Weekly chart, suggesting that a pullback will soon follow. From a short term perspective we expect a re-test of 1.1616 followed by a move into 1.1700 territory.

Fundamental Outlook

The trading week starts Monday with a couple of medium-impact indicators for the Euro: the Eurozone Manufacturing and Services PMIs, followed the same day by the U.S. Existing Home Sales. We don’t expect substantial movement at the time of release but usually a number above expectations for any of the three indicators, strengthens the respective currency.

Tuesday’s highlight will be the release of the U.S. Consumer Confidence, a survey of about 5,000 households that tries to gauge the overall opinion regarding business conditions, job availability and the economic situation in general.

Wednesday will be the most important day of the week as the Fed meets to decide the interest rate, which this time is not expected to change (currently <1.25%). The FOMC will also release a statement outlining the reasons that determined the rate decision.

Thursday is a slow day, with the only notable release being the U.S. Durable Goods Orders (shows changes in the total value of orders placed for goods with a life expectancy of more than 3 years). Friday we have a busier day, with the focus on the German Preliminary Consumer Price Index (main gauge of inflation) and the U.S. Advance Gross Domestic Product, which is the main gauge of overall performance of the economy.


GBP/USD

After the failed break of resistance, the Pound tumbled and the pair posted a bearish week. One of the main factors that triggered Pound weakness was the British CPI that missed the market consensus and came out below expectations.

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Technical Outlook

The pair is still in a choppy uptrend but the bulls are running out of steam and bearish pressure is mounting. This is shown by the failed break of 1.3050 resistance and the long-wicked candle that followed (price tried once more to move above resistance but failed). These facts make us anticipate a move into the 50 days Exponential Moving Average early in the week and the way price behaves there will reveal more hints about future direction.

Fundamental Outlook

The Pound has a very slow week ahead, with the only major release being the British Preliminary Gross Domestic Product, scheduled Wednesday. There are three versions of the GDP – Preliminary, Second Estimate and Final – but the Preliminary tends to have the highest impact, mainly because it’s the first in the series. As always, the U.S. releases will have a direct impact on the pair’s direction.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Jul 31, 2017 1:49 pm
by GDMFX
WEEKLY ANALYSIS: U.S. NON-FARM PAYROLLS – RECOVERY CATALYST OR ANOTHER BLOW TO A WEAK US DOLLAR?


EUR/USD

Weekly Analysis: Despite being overbought, the Euro pushed higher last week and broke 1.1713, which was a level last reached in August 2015. The Fed maintained a target rate of <1.25% and the Rate Statement was perceived as dovish, so the US Dollar remained on the defensive.

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Technical Outlook

Last week we saw a perfect re-test from above of the level at 1.1616 (highest price reached in 2016) and also a bullish break of 1.1713 (highest price reached since August 2015). Now 1.1616 is confirmed support and will play an important role in future price action. The pair is in a strong uptrend but the Relative Strength Index and the Stochastic are both overbought on a Daily and even on a Weekly chart, thus warning that retracements may soon follow. To the upside the next notable level is 1.1875 (last reached in 2010) followed by 1.2040 (last reached in 2012) but we don’t expect any of them to be touched this week unless surprising events take place.

Fundamental Outlook

The week starts pretty strong, with the release of the European Flash Estimate CPI and the U.S. Chicago area PMI, both scheduled Monday. Tuesday the main focus will be the U.S. Manufacturing PMI, a survey of purchasing managers from the manufacturing sector that acts as a leading indicator of economic health.

Wednesday we take a first look at the American jobs situation with the release of the ADP Non-Farm Employment Change, which is a report that tracks changes in the number of employed people in the U.S., excluding the farming sector and Government.

The last event of the week will probably be the most important as well: the U.S. Non-Farm Employment Change, scheduled Friday. Unlike the ADP version, this one is released by the Government and has a bigger impact, being considered the most important gauge of employment in the United States.


GBP/USD

The pair continued higher for most of last week, after completing a retracement that found support at 1.2930. Most of the climb was due to US Dollar weakness seen across the board.

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Technical Outlook

The resistance at 1.3050 rejected rising price several times in the past but now the pair has moved above it for the second time in a short period, so this second break will probably generate additional movement to the north. If 1.3160 resistance is broken, we expect to see a move into 1.3250 but this week both currencies will be affected by major releases and events, so the technical side will be secondary.

Fundamental Outlook

The week starts with the British Manufacturing PMI, scheduled Tuesday, followed Wednesday by the Construction PMI and Thursday by the Services PMI. All three are derived from the opinions of purchasing managers and act as leading indicators of optimism and economic health.

Also Thursday, the Bank of England will release their Inflation Report (containing inflation projections for the next 2 years) and will announce the Interest Rate at the same time. Later, BOE Governor Mark Carney will hold a press conference, discussing the Inflation Report and this cluster of events will most likely trigger huge volatility, so caution is recommended.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Aug 07, 2017 1:24 pm
by GDMFX
WEEKLY ANALYSIS: UPTRENDS SHOW WEAKNESS, US DOLLAR IS STAGING A TEMPORARY COMEBACK


EUR/USD

Weekly Analysis: Last week started in close vicinity of 1.1700 and the pair pushed higher, above 1.1875 but almost the entire climb was nullified Friday after the U.S jobs data came out better than anticipated and strengthened the greenback.

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Technical Outlook

Given last week’s strong drop from 1.1875, this level is now confirmed resistance and will play an important role for future price action. The uptrend was overextended for a relatively long period (RSI and Stochastic overbought), so a drop was needed and the U.S. jobs data helped it materialize.

For this week we expect a continuation of the bearish move started Friday, with 1.1600 as target, followed by the 50 days Exponential Moving Average. It must be noted that the pair is still in a strong uptrend, so a move back up cannot be ruled out; if this is happens, the first target will be the resistance at 1.1875.

Fundamental Outlook

We won’t see any notable release for the Euro and US Dollar during the first two days of the week but action picks up a notch Wednesday with the release of the U.S. Preliminary Unit Labor Costs. This indicator tracks changes in the price that businesses pay for labor, apart from the farming sector, and acts as a leading indicator of inflation (a higher labor cost will eventually translate into a higher price for goods and services).

Thursday the Euro continues to be unaffected by major economic releases and on the US Dollar side we have the Producer Price Index, which tracks changes in the price that producers charge for their goods and acts as another indicator with inflationary implications (higher producer prices are usually passed on to the consumer).

Friday the focus remains on the US Dollar for the release of the U.S. Consumer Price Index, which tracks changes in the price that consumers pay for the goods and services they purchase. This is one of the main gauges of inflation in the United States and usually the release has a high impact on the currency, with higher numbers strengthening it.


GBP/USD

The Pound started to weaken last week after the Bank of England lowered inflation expectations and Governor Mark Carney adopted a dovish stance during his press conference. The U.S. Non-Farm Payrolls added fuel to the fire, strengthening the US Dollar and driving the pair lower, to finish the week below support.

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Technical Outlook

The US Dollar is staging a comeback against its counterparts, on the back of better than expected employment data and after a long period of general weakness. For this week we expect further downside, with the 50 days Exponential Moving Average as first and immediate target, followed by 1.2930 and 1.2850. A bounce at the 50 days EMA would invalidate such a scenario and would switch the momentum in the favour of the bulls once again.

Fundamental Outlook

The Pound has a very light economic week ahead, with the only notable release being the Manufacturing Production, scheduled Thursday. The indicator tracks changes in the total value of goods produced by manufacturers and acts as a leading indicator of economic health; its impact is usually high because Manufacturing makes up about 80% of the entire Industrial Production, thus higher numbers usually strengthen the Pound.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Aug 14, 2017 3:04 pm
by GDMFX
WEEKLY ANALYSIS: RETRACEMENTS OR REVERSALS? US DOLLAR SHOWS MIXED SIGNALS AHEAD OF FOMC MINUTES


EUR/USD

Weekly Analysis: Last week the pair descended into the area between 1.1713 – 1.1700 but worse than expected U.S. inflation data weakened the US Dollar later in the week, so the pair bounced at support, moving higher.

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Technical Outlook

Price is in a strong uptrend and the drop from 1.1875 to 1.1713 is considered a normal retracement after a long period of bullish movement. As long as the pair is trading above the 50 days Exponential Moving Average, with price making higher highs and higher lows, we consider the uptrend intact and we anticipate another encounter with 1.1875. If this resistance is broken, the next target will become the psychological resistance at 1.2000 (big, round number) but a bearish break of 1.1713 – 1.1700 would hinder this scenario.

Fundamental Outlook

Monday is a slow economic day for both currencies and Tuesday, French and Italian banks will be closed due to Assumption Day, so we can expect irregular volatility during the European session. The first important release of the week will be the U.S. Retail Sales, scheduled Tuesday.

Wednesday we have the Flash Gross Domestic Product on the Euro side and the US Dollar will be affected later in the day by the FOMC Meeting Minutes, a document that contains the details of the latest FOMC Meeting and reasons for the latest rate vote.

Thursday the U.S. Industrial Production will show changes in the total value of goods generated by the manufacturing, utility and mining sectors. The week ends Friday with the University Of Michigan Consumer Sentiment, which is a survey that tries to gauge the opinions of about 500 consumers regarding current and future economic conditions.


GBP/USD

The pair continued to drop after the bounce at 1.3250 resistance but encountered support at 1.2950 and started to move in a range, without clear direction for most of last week.

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Technical Outlook

The 50 days Exponential Moving Average is flat and price is trapped inside a horizontal channel with 1.3050 as upper limit and 1.2950 as lower limit. Until one of these barriers is broken decisively, our view is neutral and we expect more of the ranging movement seen last week. Once the pair exits the channel, the first lower target will become 1.2850 followed by 1.2770; the upper target will be 1.3250 but such a big move will have to be supported by some positive British economic news.

Fundamental Outlook

We have a busier week than the one before, with three major releases for the Pound. The Consumer Price Index comes out Tuesday, showing changes in the price paid by consumers for the goods and services they purchase. This is also the main gauge of inflation, so its impact is usually very high.

Wednesday the Average Earnings Index will show changes in price that businesses pay for labor and Thursday the British Retail Sales come out, showing changes in the total value of sales performed through retail outlets. All these are high-impact indicators that will probably trigger strong movement on the pair.

Re: Weekly Commentary | Gdmfx | Technical

PostPosted: Mon Aug 21, 2017 1:51 pm
by GDMFX
WEEKLY ANALYSIS: UPTREND WAVERS AS THE US DOLLAR FIGHTS FOR A COMEBACK


EUR/USD

Weekly Analysis: Most of last week’s price action took place around 1.1700 support, which appeared broken several times but the pair returned above it almost immediately. The fundamental scene was pretty dull, and didn’t generate strong moves.

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Technical Outlook

The uptrend is weakened now because a lower high was printed last week (1.1840) but support is still holding and the latest candles show long wicks in their lower part, which is a sign of rejection. All this creates a mixed picture, without a clear bias but as long as the pair is trading above 1.1700 – 1.1713 and above the 50 days Exponential Moving Average, we expect to see a continuation of the uptrend and a move closer to 1.1875. A break of the mentioned support and a move below the 50 days EMA would be a strong sign that the uptrend is coming to an end.

Fundamental Outlook

The first notable release of the week is the German ZEW Economic Sentiment, scheduled Tuesday. The survey shows the opinions of about 275 German professional investors and analysts regarding the state of the economy for the next 6-months and usually has a medium impact on the currency.

Wednesday the focus remains on the German economy for the release of their Manufacturing and Services PMIs, which are surveys of purchasing managers regarding the health of the respective sectors. Usually the impact is medium but higher numbers show optimism and strengthen the Euro.

Thursday the Jackson Hole Economic Symposium will start and will be attended by central bankers, finance ministers and other personalities from around the globe. This event is held annually and can have a significant impact, depending on the matters discussed and the attitude of the speakers.

Friday the US Dollar will be affected by the U.S. Durable Goods Orders and the Jackson Hole Symposium will continue in Wyoming, so this can affect other currencies as well, not only the greenback.


GBP/USD

The British Consumer Price Index (main gauge of inflation) missed the market consensus of 2.7% and showed a reading of 2.6%. This triggered the biggest move of last week and brought the pair into the support at 1.2850 but the bearish momentum soon faded and support remained intact.

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Technical Outlook

The pair is trading below the 50 days Exponential Moving Average, a fact which makes the short-to-medium term outlook bearish. However, we can see that for several days the bears have tried to break 1.2850 support and each time they failed, so this level will be this week’s main “player”. A bearish break will make 1.2770 the immediate target, followed by 1.2630 in the longer run. A bounce at 1.2850 will take the pair into the 50 EMA, followed possibly by 1.3050.

Fundamental Outlook

Tuesday the British Office for National Statistics will release the Public Sector Net Borrowing, which is a report that shows the difference between spending and income for the government and public corporations. A higher deficit usually weakens the Pound but the impact is not very high.

Thursday the Second Estimate British Gross Domestic Product is released, showing changes in the total value of goods and services produced by the economy. The GDP usually has a high impact on the currency so we expect to see increased volatility. The same day the Jackson Hole Symposium starts and British representatives will attend so the Pound may be affected.