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Weekly Commentary | Gdmfx | Technical

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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Sep 15, 2014 12:13 pm

FOREX TECHNICAL ANALYSIS: A HISTORIC WEEK AHEAD – SCOTTISH INDEPENDENCE TAKES CENTER STAGE


EUR/USD
Forex Technical Analysis: The fundamental scene was slow during the week that just ended and as a result, price action lacked the volatility seen throughout the last period. Also, after 8 bearish weeks, we saw the first victory of the bulls, although it was a minor one.

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Technical Outlook
The week ended with price being higher than it opened but the buyers couldn’t make substantial advances and the Relative Strength Index on a Weekly chart is still trading in oversold territory. Last week’s candle shows bullish pressure (long lower wick) and these facts make us believe that we will see a climb into 1.3000 or even 1.3100. To the downside, 1.2750 is a key level which acted as strong support in the past and is likely to stop bearish movement if it will be touched.

Fundamental Outlook
The German ZEW Economic Sentiment is the week’s first notable event. This survey, scheduled Tuesday, shows the opinions of about 275 German professional investors and analysts regarding the current economic situation and a 6-month outlook. The same day, the American Producer Price Index is announced, showing the change in prices charged by producers for their services and goods. The indicator has inflationary implications because a higher producer price will be eventually passed on to the consumer.

Wednesday the United States will take center stage as the FOMC will announce the Interest Rate, a Statement will be released and a Press Conference will take place. This cluster of events is likely to generate strong moves and high volatility so caution is recommended.

Thursday Fed Chair Janet Yellen will deliver a speech in Washington DC, via satellite but throughout the day, the world’s eyes will be focused on the Scottish Independence vote which will most likely generate irregular movement. Friday lacks major events and we are likely to have a slow, ranging day.


GBP/USD
Bearish momentum slowed down last week and the bulls finally managed to close the week higher than it begun. Price action was heavily influenced by the polls regarding the Scottish Independence, a matter that will be finally settled this week when the results of the referendum are released.

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Technical Outlook
The pair is currently testing the important level at 1.6250. This level acted as both support and resistance in the past and it proved to be well respected by price but the latest gap generated a clear move below it. However, it will be hard for the pair to move past this level for the second time without some sort of rejection, stall or re-test (if broken). A clear move above will make 1.6460 the next bullish target while a bounce lower will open the door for a move into 1.5900 with the first barrier being last week’s low.

Fundamental Outlook
The main event for the Pound will be the Scottish Independence vote scheduled Thursday. If the Scottish people will decide in favor of a separation from the United Kingdom, the Pound will suffer and we are likely to see huge downside movement but no matter the result, volatility will be high and caution is recommended.
Other important events are the British CPI scheduled for release Tuesday, the MPC Meeting Minutes (Wednesday), which will show a breakdown of the members’ votes regarding the interest rate and the British Retail Sales scheduled Thursday. Overall, we expect a week with strong movement which will be heavily influenced by the Referendum; as always, the US events will have a direct impact on the pair’s direction.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Sep 22, 2014 12:37 pm

FOREX TECHNICAL ANALYSIS: UNITED KINGDOM’S UNITY REMAINS INTACT


EUR/USD
Forex Technical Analysis: Last week the US Dollar was strengthened by a hawkish attitude of Fed Chair Yellen while the European Central Bank decided to set the target for their Long Term Refinancing Option (LTRO) at 82.6 Billion Euros, a fact which was perceived as bearish and triggered another selloff.

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Technical Outlook
The week belonged to the bears as a new low was printed and the downtrend was resumed. The first level of importance to the downside is located at 1.2750 and it seems this level is the pair’s next destination now that 1.3000 was re-tested from below successfully. However, the Daily Relative Strength Index didn’t move clearly out of oversold territory for a long period and this increases the possibility of bullish moves but the pair is in a clear downtrend and we favor more downside movement overall.

Fundamental Outlook
Monday ECB President Mario Draghi will testify before the European Parliament’s Economic and Monetary Committee regarding monetary policy, an event which will be surrounded by volatility and possibly strong movement depending on his attitude and answers.

The French and German Flash Manufacturing PMIs will be Tuesday’s main events while Wednesday’s headlines are the German IFO Business Climate and the American New Home Sales. Traders’ attention will then shift to the US Durable Goods Orders (goods with a life expectancy of more than three years) which are released Thursday. At the same time the Core version (which excludes from calculation transportation items) is released. Better numbers for any of the versions may strengthen the US Dollar because they suggest future increased economic activity as producers will have to work harder to fill the extra orders.

Friday the United States will release the Final version of the Gross Domestic Product but this tends to have the lowest impact of the three versions (Advance, Preliminary and Final). However, since the GDP is an economy’s main performance gauge, the market will react to surprising numbers.


GBP/USD
The Scottish people voted “No” last week on a potential separation from the United Kingdom so the 307-year old union will remain intact for now. The result triggered Pound strength and was the week’s main British event.

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Technical Outlook
The pair broke 1.6460 and came close to 1.6550 resistance on the back of Pound strength generated by the Scottish vote but soon after, the Dollar erased some of the gains. Overall we had a bullish week but if price will return below 1.6250, we are likely to see a move in close vicinity of 1.6060. To the upside, resistance still sits at 1.6460 followed by 1.6550 as these levels were just pierced and price failed to close above them.

Fundamental Outlook
The week ahead is characterized by a lackluster fundamental scene, a fact which makes us believe that we will see price slow down a bit, especially now that Scottish turmoil has settled. Tuesday the British Bankers’ Association will release the Mortgage Approvals numbers and Thursday the Confederation of British Industry will release a survey regarding Realized Sales. These are medium-impact indicators and we don’t expect them to create strong movement but the pair’s direction will be directly influenced by the US events mentioned earlier.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Sep 29, 2014 11:51 am

FOREX TECHNICAL ANALYSIS: ALL EYES ON THE EUROPEAN CENTRAL BANK RATE AND AMERICAN EMPLOYMENT DATA


EUR/USD
Forex Technical Analysis: Last week the US Dollar reached a 21-month high against the Euro, continuing to drag the pair lower on the back of strength generated by speculation that the Fed will move to raise interest rates before other Central Banks do.

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Technical Outlook
An important support level was broken last week, showing the clear difference in strength between the Euro and the Dollar. The first support is now located at 1.2660, followed by 1.2280 but the Relative Strength Index on a Weekly chart shows a clear oversold condition and this increases the chance of bullish retracements. Keep in mind that the RSI is not a clear signal to go long as it can stay in oversold territory for a relatively long period and we may easily see another bearish week. To the upside, 1.2750 will probably turn into resistance.

Fundamental Outlook
We have an important week ahead, with the first major event being the release of the German Preliminary CPI scheduled Monday. As this is the main gauge of inflation and the German economy is a pillar of the entire Euro Zone, we expect volatility at the time of the release. Euro Zone’s CPI Estimate will be released Tuesday and the same day a survey regarding American Consumer Confidence comes out.

Wednesday’s headline will be the ADP Non Farm Employment Change, a private report which tries to mimic the Government report issued 2 days later. Thursday will be the most important day of the week for the Euro as the ECB will announce the interest rate and Mario Draghi will hold a press conference discussing the rate decision and the economic situation of the Euro Zone. This is almost always a reason for strong and sometimes irregular movement so we recommend caution if trading during the Conference.

The US Dollar will be strongly influenced Friday by the Non Farm Employment report which is considered the most important data regarding the American job market and almost always generates big swings.


GBP/USD
The bears managed to take price lower last week, a behavior mostly generated by US Dollar strength, not by Pound weakness. An important level was touched and we expect some bullish reaction here.

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Technical Outlook
During the previous weeks a bullish retracement was completed and it seems now the downtrend will continue. For that to happen, the current level at 1.6250 must be broken decisively; even if last week closed below it, the move cannot be considered a true break because price is still very close to the level and a retest was not seen. To the upside, the first barrier is located at 1.6460.

Fundamental Outlook
Three important indexes are released this week by the United Kingdom: the Manufacturing PMI comes out Wednesday, followed Thursday by the Construction PMI and finishing the week Friday with the Services PMI. For these indicators, purchasing managers from the manufacturing, construction and services sectors will be asked to give their opinions on the health of each sector. The surveys act as leading indicator of economic health and usually have a big impact on the Pound. As always, the pair will be directly influenced by the important US events mentioned earlier.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Oct 06, 2014 8:05 am

FOREX TECHNICAL ANALYSIS: PRICE ACTION SLOWS DOWN ON THE BACK OF A QUIET FUNDAMENTAL SCENE


EUR/USD
Forex Technical Analysis: Last week’s price action made it clear that the European economy is in need of further stimulus while employment levels in the United States rose more than anticipated, adding fuel to an already strong US Dollar.

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Technical Outlook
The current selloff is one of the longest seen in recent years as price is falling since July without even a slight retracement on the Weekly charts. It is true that some bullish retracements were seen on the daily charts, but nothing significant and this raises questions about where price will stop. The first support ahead is located at 1.2440 and the Relative Strength Index is deep in oversold territory so we might see some bull power here. However, last week we warned that another bearish week is possible even though the RSI is oversold and the market dropped; the same applies for this week but the fundamental scene lacks huge releases so we might be in for slower price action.

Fundamental Outlook
Monday there are no important American indicators and the Euro will only be affected by a medium-impact release: German Factory Orders. This is a leading indicator of production as more orders placed with manufacturers would suggest that activity will have to increase to fill these orders.

Tuesday we have another slow day in terms of economic releases for both the Euro and the Dollar but Wednesday we expect more action as the FOMC will release the Minutes of their latest Meeting. The document will offer insights into the reasons which influenced the members’ latest vote regarding interest rates and may also contain hints about a potential rate hike.

Thursday the G20 (Group of 20) meetings start and ECB President Mario Draghi will speak in Washington DC about the recent European situation. As always, his speeches are reasons for increased volatility and caution is recommended. Friday the G20 meetings will continue but other than that, no major economic or financial releases are scheduled.


GBP/USD
British economy showed signs of slowing down last week as economic data disappointed somewhat and the US Dollar continued to strengthen, resulting in a bearish week and broken support.

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Technical Outlook
Now that 1.6060 is broken, the pair is heading towards the important zone around 1.5900 which acted as strong support in the past. For the entire 2014 the pair traded above 1.6000 and the move below this psychological support is an important victory for the bears but we must note the oversold condition of the Relative Strength Index which increases the chances of a bullish bounce if price will touch 1.5900. First major resistance sits at 1.6250 while immediate resistance is located at 1.6060.

Fundamental Outlook
British Manufacturing Production data will be released Tuesday and the same day a Gross Domestic Product estimate will be announced. Both indicators have the potential to strengthen the Pound if their value will be higher than forecast and vice versa for lower numbers. Thursday the Bank of England will announce their interest rate decision but no change is expected from the current 0.50% so we don’t expect a lot of volatility. Thursday and Friday the pair’s movement will be affected by the G20 Meetings.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Oct 20, 2014 12:34 pm

FOREX TECHNICAL ANALYSIS: THE US DOLLAR IS STARTING TO LOSE ITS APPEAL


EUR/USD
Forex Technical Analysis: Last week was dominated by the bulls on the back of a disappointing value of the US Retail Sales which showed the American economy may be losing steam. The US Dollar suffered the consequences and the pair traveled upwards, breaking resistance.

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Technical Outlook
The resistance at 1.2750 was broken decisively last Wednesday but price returned for a re-test during the next two days and the week closed near the mentioned level which turned into support. The pair created a weekly high at 1.2886 which will act as resistance in the future but if the current level at 1.2750 is broken to the downside, the next target will be represented by 1.2620. Given the huge distance traveled to the downside by the pair during the last months, we might see a longer retracement to the upside but on the other hand, a downtrend is still in place and we could see a move below 1.2750.

Fundamental Outlook
The first notable event of this week is the release of the US Existing Home Sales scheduled Tuesday. The indicator shows the annualized number of houses sold during the last month and usually it has a medium impact on the US Dollar. Probably the most important event for the Dollar will be the release Wednesday of the American Consumer Price Index which is a measure of overall inflation. The CORE version, which excludes food and energy from calculation, is released at the same time and this is sometimes considered more important because food and energy can fluctuate a lot, thus distorting the main data.

The French and German Manufacturing Purchasing Managers’ Indexes are released Thursday; these act as leading indicators of economic health and can have a positive impact on the Euro if better numbers are posted. The last event of the week is the release of the US New Home Sales, scheduled Friday. The indicator usually has a higher impact than the Existing Home Sales but this depends a lot on the difference between forecast and actual.

GBP/USD
British inflation dropped more than anticipated last week and this weakened the Pound severely but soon after, disappointing US Retail Sales data took the pair north on the back of Dollar weakness.

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Technical Outlook
Last Tuesday the important support at 1.5900 was touched and price soon bounced higher, moving above 1.6060 resistance so we can notice the bulls are starting to make their presence known. However, because we are in a downtrend, it is very possible to see another attempt to break 1.5900 but as long as the pair remains above 1.6060, we believe there are strong chances of a move close to 1.6250.

Fundamental Outlook
The Bank of England will announce Wednesday the breakdown of the votes on the latest Interest Rate decision. This is a good way of seeing if some of the members of the Monetary Policy Committee have changed their stance regarding a potential rate hike and usually volatility is created only if the forecast doesn’t come true.

Thursday the British Retail Sales are announced and we saw what a tremendous impact this indicator can have on a currency so caution is recommended. The last major Pound affecting event comes Friday: the release of the Preliminary Gross Domestic Product which is considered the most important version of the three (Preliminary, Second Estimate and Final). As always, the pair will be directly affected by the US events scheduled during the week.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Oct 27, 2014 1:26 pm

FOREX TECHNICAL ANALYSIS: PRICE ACTION SHAPED BY EUROPEAN INFLATION AND AMERICAN MONETARY POLICY


EUR/USD
Forex Technical Analysis: The week that just ended was characterized by mostly bearish price action which was generated by technical reasons but also by a better than expected American CPI and speculation that ECB may implement more stimulus to spur economic growth.

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Technical Outlook
Last week price started to move in line with the main trend, marking the end of a bullish retracement. The level at 1.2750 was broken to the downside and 1.2620 support was tested but managed to reject the first break attempt seen Thursday. However, this week we expect the downside pressure to prevail and the bears to break the mentioned support, taking price towards 1.2500. To the upside, first resistance is located at 1.2750 followed by the high created at 1.2886.

Fundamental Outlook
The European Banks stress test results made public Sunday will have an important impact on price action throughout the week but aside from that, the pair will be influenced by several other events. Monday the German IFO Business Climate survey, which uses a sample of 7,000 businesses in order to gauge optimism regarding current and future business conditions, will be released.

Tuesday the US Dollar will be affected by the US Durable Goods Orders and the Consumer Confidence survey (which acts as a leading indicator of consumer spending). Wednesday will probably be the most active day for the US Dollar as the US Federal Funds Rate is announced and the FOMC will release a statement outlining the economic and financial reasons which stood behind the decision.

Thursday two important indicators come out: the German Preliminary Consumer Price Index which has a hefty impact on overall European inflation and the US Advance Gross Domestic Product. Friday’s most notable event is the release of the European CPI Flash Estimate which is the main gauge of inflation in the Euro Zone and usually has a strong impact on the currency.


GBP/USD
The Pound had a mixed week as it was affected by a disappointing value of the British Retail Sales but some of the losses were erased Friday on the back of a value of the GDP which matched the forecast and was perceived as bullish.

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Technical Outlook
The last weekly candle is a Doji (candle with long upper and lower wicks and a very small body), which suggests market indecision. Our bias is neutral from a technical perspective and we consider the fundamental aspect to be this week’s main price mover. The major levels to watch are 1.6250 as resistance and 1.5900 as support while minor resistance sits at 1.6180 and potential support at 1.6060.

Fundamental Outlook
The week ahead lacks major UK releases but the pair will be heavily influenced by the United States events. However, notable British events are the CBI Realized Sales released Monday and the Net Lending to Individuals, announced Wednesday.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 03, 2014 11:59 am

FOREX TECHNICAL ANALYSIS: INTEREST RATES AND EMPLOYMENT DATA – INGREDIENTS FOR AN ACTION PACKED WEEK


EUR/USD
Forex Technical Analysis: The Fed ended their stimulus program last week and although this was anticipated, the event still generated huge US Dollar strength, putting the bears in control of the pair’s direction. An important role in last week’s descent was also played by the disappointing Euro Zone inflation numbers.

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Technical Outlook
The pair remains under pressure and we expect the downside to prevail this week as well but we must note the oversold condition of the Relative Strength Index and the immediate support located at 1.2500. These factors could trigger moves to the upside, with 1.2620 being the first resistance. Even if the RSI is trading in oversold territory, it is angled downwards, suggesting that another push lower could be made this week; the next support is located at 1.2280 but a touch of this level will depend on the fundamental events scheduled this week.

Fundamental Outlook
The first notable event of the week is the Monday release of the American Manufacturing PMI, a survey of purchasing managers which acts as a leading indicator of economic health and optimism. Tuesday the US Trade Balance is released (difference between imported and exported goods) and Wednesday the first US employment data will come out in the form of the ADP Non Farm Employment Change which is a report released by a privately owned company.

The focus will shift towards the Euro Thursday for the Interest Rate decision and the ECB Press Conference. Although no change is expected for the Interest Rate, Mario Draghi’s comments and attitude will surely generate some volatility and strong movement.

The final event of the week is scheduled Friday and it’s the most important American employment data: the US Non Farm Employment Change (also known as Non Farm Payrolls). The report shows how many new jobs were created during the previous month and has a tremendous influence on the greenback as more jobs suggest that consumer spending may increase in the near future.


GBP/USD
The United Kingdom didn’t release major news last week but US Dollar strength generated by the Fed decision to end the QE program took the pair lower after a bounce at resistance.

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Technical Outlook
Last week was bearish but the important support at 1.5900 may hinder further downside movement. Adding to this, the Relative Strength Index is hovering close to the 30 level on a Weekly chart, a thing which suggests oversold and thus increases the chances of bullish movement. Although there are some bullish signs, if 1.5900 support is broken, the move may extend into 1.5750 which is the next weekly support.

Fundamental Outlook
The British Manufacturing PMI is Monday’s main event for the Pound, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are leading indicators of economic health for their respective sectors thus higher numbers than anticipated will have a positive impact on the Pound. Thursday the Bank of England will announce the interest rate, with no change anticipated but any speculation about a possible change could greatly affect the pair so caution is recommended. Throughout the week price action will be directly affected by the US releases as well.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 10, 2014 5:58 am

FOREX TECHNICAL ANALYSIS: OVERSOLD CONDITION CALLS FOR BULLISH MOVEMENT


EUR/USD
Forex Technical Analysis: The pair just finished another week controlled by the bears on the back of Euro weakness generated by Mario Draghi’s renewed commitment to use additional stimulus measures if the risk of deflation persists. On the other hand, the US Dollar was negatively affected by the NFP release and some of the pair’s losses were erased Friday.

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Technical Outlook
During the week the pair broke 1.2500 support but Friday we saw bullish action and the weekly candle now has a long wick which suggests indecision. The Relative Strength Index on a weekly chart is below the 30 level, indicating an oversold condition but it is still pointing downwards and the pair is in a strong downtrend so we expect further bearish action. If the pair will remain below 1.2500, the first potential support is located at 1.2360 followed by 1.2280.

Fundamental Outlook
There are no important economic releases Monday and the same is true for Tuesday when US Banks are closed, celebrating Veterans Day. Euro Zone’s Industrial Production numbers are released Wednesday and Thursday the main event will be the American Unemployment Claims but this is often overlooked by market participants because it is an indicator which is released every week.

Friday a more important indicator is released by the United States: the Retail Sales. The importance of this indicator comes from the fact that sales made at a retail level account for a hefty part of the entire economic activity and a higher value suggests a thriving economy. The same day the Euro Zone Gross Domestic Product is announced, showing the overall performance of the European economy.


GBP/USD
The British economy posted worse than expected numbers overall and the Pound weakened against the US Dollar for another week. Price rebounded higher during the last day of the week on the back of US Dollar

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Technical Outlook
The pair is headed towards the support at 1.5750 and we expect a bounce higher once and if price gets there. The Relative Strength Index is just crossing the 30 level downwards on a weekly chart but it has been hovering close to this level for a long while so a touch of support combined with an oversold condition of the indicator will probably push the pair higher.

Fundamental Outlook
Wednesday is the busiest day for the Pound as the Claimant Count Change is announced and Bank of England Governor Mark Carney will hold a press conference discussing the Inflation Report released the same day. This Report contains the Bank of England’s economic outlook and inflation forecast for the next 2 years and usually has a high market impact so caution is recommended. As always, the US events will have a direct impact on the pair’s movement throughout the week.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 17, 2014 12:17 pm

FOREX TECHNICAL ANALYSIS: OVEREXTENDED PRICES CALL FOR BULLISH RETRACEMENTS


EUR/USD
Forex Technical Analysis: Last week was characterized mainly by indecision and sideways price action and the pair traded inside a horizontal channel for most of the time. A breakout only occurred during the last day of the week, marking the end of the ranging period.

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Technical Outlook
Although the pair broke resistance, the main trend is still bearish and we anticipate further downside movement after a bullish retracement is completed. An important area is located around 1.2620 as we have three types of resistance there: diagonal resistance represented by the bearish trend line seen on the chart above, dynamic resistance represented by the 50 day Exponential Moving Average and horizontal resistance represented by the level at 1.2620. If this zone can be broken to the upside, it will be an indication of bull strength and price is likely to travel towards 1.2750; otherwise, 1.2360 will be the week’s target.

Fundamental Outlook
Monday ECB President Mario Draghi will testify on Monetary Policy before the Committee on Economic and Monetary Affairs. This event is likely to generate a strong market response since all Draghi’s public speeches are important but this appearance holds extra importance due to the fact that monetary policy will be discussed. The German ZEW Economic Sentiment survey is released Tuesday, showing the level of optimism among German analysts and professional investors and the same day the American Producer Price Index comes out, tracking changes in prices charged by producers.

Wednesday’s main event is the release of the FOMC Meeting Minutes which will contain insights into the reasons that stood behind the latest Fed decision regarding monetary policy and interest rates. Thursday the focus remains on the United States for the announcement of their Consumer Price Index and the economic week finishes Friday with another Mario Draghi speech at the 24th European Banking Congress, in Frankfurt.

GBP/USD
The Pound weakened throughout the week that just ended as the British economy showed signs of slowing down and inflation expectations dropped. Support was broken and the pair printed another low of the year.

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Technical Outlook
The downtrend is strong and further bearish price action is expected but the pair is overextended as shown by the oversold condition of the Relative Strength Index on a Weekly chart. Support sits at 1.5590 but we favor bullish retracements before the downside can prevail. The resistance at 1.5750 is the first bullish target, followed by 1.5900 and the Daily chart shows bullish divergence (price is printing lower lows while the RSI shows higher lows), supporting this upside bias.

Fundamental Outlook
The main gauge of British inflation is released Tuesday: the Consumer Price Index. Inflation is highly correlated with the Pound’s strength and weakness will likely be seen if the CPI value will be lower than anticipated. Another important event is the announcement of the Monetary Policy Committee’s votes on interest rate, scheduled Wednesday. This is a good opportunity to see if some of the members are changing their stance regarding a change of the interest rate and usually volatility is present only if one or more members changed their vote. Thursday the British Retail Sales come out and this is another reason for increased volatility and Pound fluctuation. As always, the US events will have a direct impact on the pair’s movement.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 24, 2014 3:59 pm

FOREX TECHNICAL ANALYSIS: CONCERNS OF LOW INFLATION WEAKEN THE EURO


EUR/USD
Forex Technical Analysis: Last week the pair had mixed up and down movement until the final trading day when Mario Draghi’s speech triggered substantial Euro weakness and a sharp drop. The ECB President commented that inflation expectations reached “excessively low” levels and the market impact was immediately seen.

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Technical Outlook
For this week we expect further downside movement generated by Mario Draghi’s comments and by the overall negative sentiment surrounding the Euro. The first lower barrier is located at 1.2360, followed by 1.2280 but the Relative Strength Index is moving below its 30 level. This suggests that bullish retracements can occur but in strong trends the indicator can remain oversold or overbought for a long time without price reversing. If the pair starts to move north, the first resistance is located at 1.2620.

Fundamental Outlook
The first important event of the day is scheduled Monday: the German IFO Business Climate Survey which is derived from the opinions of about 7,000 businesses and acts as a leading indicator of economic health. The American Preliminary Gross Domestic Product will be released Tuesday and because this is the main gauge of an economy’s performance, better than expected numbers will most likely strengthen the US Dollar.

Wednesday we have the American Durable Goods Orders and Thursday US Banks will be closed, celebrating Thanksgiving Day. This will generate irregular volume and mixed volatility thus caution is highly recommended. Friday’s main event will be the European CPI release which is the main gauge of inflation. Considering how strong the Euro moves whenever inflation is discussed, this event will probably have high market impact.


GBP/USD
Although the British economy showed a higher CPI and better than expected Retail Sales, the pair just finished another bearish week. However, the downside momentum is fading away and the US Dollar didn’t make significant advances.

Image

Technical Outlook
Last week ended lower than it begun but the weekly candle shows long wicks on both its upper and lower parts. This is a sign of indecision which combined with the oversold condition of the Relative Strength Index can trigger upside movement. If this is the case, the first resistance is located at 1.5750; if 1.5590 support can be broken, the door will be open for the next level, located at 1.5420.

Fundamental Outlook
Governor Mark Carney will speak Tuesday in London, at Parliament’s Treasury Select Committee hearing. This is expected to be an event with high market impact so use caution if trading during the speech. The other important event of the week is scheduled Wednesday in the form of the British Second Estimate Gross Domestic Product. Although this version is not as important as the Preliminary, it still has the potential to affect the Pound strongly. As always, the US events will have a direct impact on the pair’s movement.
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