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Weekly Commentary | Gdmfx | Technical

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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 13, 2017 1:11 pm

WEEKLY ANALYSIS: PAIRS STILL IN LIMBO. LOOKING FORWARD TO INFLATION AND RETAIL SALES DATA FOR A VOLATILITY BOOST


EUR/USD

Weekly Analysis: In the second part of last week the pair showed some signs of directional movement but overall it is still in a range, bouncing between 1.1600 and 1.1700. The lack of major economic releases contributed to the slow movement.

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Technical Outlook

The sellers have tried several times to break 1.1600 support zone in the last period but all attempts have failed and now price is moving north, towards the confluence zone created by the 50 days Exponential Moving Average, the resistance at 1.1700 and the bearish trend line seen on the chart above. This confluence zone will be tough to break, considering that lately the pair has been moving very slow, but on the other hand, a break would show that finally the balance is tilting towards one side and that more directional movement will follow.

Fundamental Outlook

Monday will be a slow economic week for the pair but action picks up Tuesday with the release of the Eurozone Flash Gross Domestic Product and the German ZEW Economic Sentiment, which is a survey of about 300 institutional investors and analysts that asks respondents to give a 6-month outlook for the German economy.

Wednesday the focus shifts on the US Dollar for the release of the Consumer Price Index (which is one of the main gauges of inflation) and the Retail Sales, which represent the main part of consumer spending and thus are very important for the currency itself.

Thursday the Philly Fed Manufacturing Index will show the opinions of about 250 manufacturers from the Philadelphia district regarding overall business conditions in the district, and the week ends Friday with the U.S. Building Permits that will offer insights into the construction activity. Apart from a few major releases, we have another slow week ahead, with the technical side taking center stage.


GBP/USD

The Pound retraced higher last week, erasing some of the losses incurred a week before but the pair is still in a range, without a clear trend.

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Technical Outlook

After the bounce at 1.3050 support, price moved higher and reached the 50 days Exponential Moving Average, which is flat, showing that control doesn’t clearly belong to either side. For this week we expect to see a breakout of either 1.3250 resistance or 1.3050 support and if that happens, it will probably trigger additional movement in the direction of the break. Until price moves outside one of the two levels, the pair is ranging and we can expect to see further choppiness.

Fundamental Outlook

The first important release of the week will be the British Consumer Price Index, scheduled Tuesday. This is the main gauge of inflation and usually has a strong impact on the Pound, so caution is recommended.

Wednesday’s highlight will be the release of the Average Earnings Index, a report that shows changes in the price that employers pay for labor and the final economic data of the week is scheduled Thursday in the form of the British Retail Sales numbers, which usually have a high impact on the Pound.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Nov 27, 2017 1:02 pm

WEEKLY ANALYSIS: EURO EXPLODES TO THE UPSIDE, CAPITALIZING ON A FRAIL US DOLLAR. KEY RESISTANCE EYED


EUR/USD

Weekly Analysis: Euro strength combined with US Dollar weakness across the board generated a bullish week and a break of key resistance. The pair has exited the consolidation phase but the long term uptrend has not yet resumed.

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Technical Outlook

After breaking the bearish trend line seen on the chart above, the pair consolidated between the 50 days Exponential Moving Average and 1.1875 resistance. Now the consolidation is over and we are dealing with a clear bullish breakout above 1.1875, meaning that the key level at 1.2000 is the pair’s first destination. This is a technical resistance as well as a psychological level (big, round number) and the Relative Strength Index is entering overbought, so we expect to see bounces lower if the pair reaches it.

Fundamental Outlook

The week opens relatively slow, with nothing major for the Euro for the first two days of the week. For the US Dollar the highlights will be the New Home Sales scheduled Monday and followed Tuesday by the Consumer Confidence survey. These releases are not known to have a huge impact but usually a higher number strengthens the currency.

Wednesday action picks up with the Preliminary version of the German Consumer Price Index, which is the main gauge of inflation and has a hefty impact on the shared currency because the German economy is the strongest in the Eurozone. Another important release is the Preliminary version of the U.S. Gross Domestic Product, which is the main gauge of overall economic performance and later the same day, Fed Chair Yellen will testify before the Joint Economic Committee of Congress on U.S. economic outlook.

Thursday the European Flash version of the Consumer Price Index will be released and the week ends Friday with the U.S. Manufacturing PMI, which is a survey of purchasing managers that tries to gauge their optimism regarding economic conditions in the Manufacturing sector.


GBP/USD

Broad US Dollar selling was the main reason for last week’s continued climb. The pair has now moved into medium term resistance, which makes it susceptible to a bounce lower.

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Technical Outlook

For the last few weeks the pair has traded inside the range created by 1.3320 resistance and 1.3050 support. Currently it’s testing the upper boundary but the last two daily candles are small and with long wicks, showing that bullish momentum is fading, so we may see a bounce that could find support around 1.3250 or even at the 50 days Exponential Moving Average. On the other hand, a clear break of 1.3320 will increase the probability of a move into 1.3450.

Fundamental Outlook

The British Bank Stress Test Results will come out Tuesday, offering insights into the financial stability of 7 banks and building societies. The same day the Bank of England will release their Financial Stability Report, which assesses the potential risks for the financial system.

The last event of the week is scheduled Friday in the form of the Manufacturing Purchasing Managers’ Index, which is a leading indicator of economic health and optimism among purchasing managers from the Manufacturing sector.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Dec 11, 2017 8:05 am

WEEKLY ANALYSIS: THREE INTEREST RATES – THREE REASONS FOR HUGE VOLATILITY


EUR/USD

Weekly Analysis: Last week belonged to the US Dollar that showed signs of recovery and took the pair into 1.1700 area. Most of the move was technical as the economic scene was slow and without market moving events.

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Technical Outlook

After the break of the bullish trend line seen on the chart above, price remained below 1.1875 and descended below the 50 days Exponential Moving Average. Although last week closed below the 50 EMA, the last daily candle has a very long wick and a very small body, which is a sign of indecision, so the next direction is difficult to anticipate. For now the first support is located at 1.1700 and resistance sits at 1.1875; if price climbs above the 50 EMA, showing that the initial break was false, we expect a move into 1.1875.

Fundamental Outlook

The first notable releases of the week are scheduled Tuesday: the German ZEW Economic Sentiment (survey of about 300 German investors and analysts regarding economic conditions) and the U.S. Producer Price Index (shows changes in the price that producers charge for their goods and services).

Wednesday will be the most important day of the week for the US Dollar as the Fed will announce their interest rate, which is expected to increase from <1.25% to <1.50%. A Rate Statement will come out at the same time, outlining the reasons that determined the rate decision and half an hour later, Fed Chair Yellen will hold a press conference, discussing the rate. Given that this is the final rate announcement of the year, we may see strong movement on the US Dollar.

Thursday it’s the ECB’s turn to announce the interest rate (no change expected) and soon after, ECB President Mario Draghi will hold his usual press conference during which he will answer unscripted questions from journalists. Also Thursday the U.S. Retail Sales will come out, so this will be another day with possibly high volatility. The week ends Friday without any notable releases.


GBP/USD

The Pound had a choppy week and was affected by Brexit talks that generated periods of irregular volatility and reversals on the lower time frames. The bias was bearish but the pair remained above support.

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Technical Outlook

After bouncing at 1.3320, the pair climbed above 1.3450 only to move back below it again, showing choppy price action. The technical aspect will be overshadowed by any news regarding Brexit negotiations but the levels to watch remain 1.3320 as support and 1.3550 as resistance (for now 1.3450 doesn’t seem too important). A break of 1.3320 and the 50 EMA will open the door for a move into 1.3050 but this could take more than a week.

Fundamental Outlook

The Pound has a busier week than usual, starting with the Consumer Price Index, scheduled Tuesday. This is the main gauge of inflation and shows changes in the price that consumers pay for the goods and services they purchase.

Wednesday the Average Earnings Index comes out, showing changes in the price that employers pay for labor. The indicator has inflationary implications because usually if businesses pay more for labor they tend to increase the price of their products. If the actual change surpasses expectations, this usually strengthens the Pound.

Thursday the British Retail Sales will come out and the Bank of England will announce the rate decision, which creates volatility even if no change occurs. As always, the U.S. releases will have a strong impact on the pair so caution is recommended.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Dec 18, 2017 9:30 am

WEEKLY ANALYSIS: PRICE ACTION BECOMES CHOPPIER AS WE GET CLOSER TO THE WINTER HOLIDAYS

EUR/USD


Weekly Analysis: Last week the Fed raised the interest rate from <1.25% to <1.50% as expected but Fed Chair Yellen was somewhat dovish during her press conference and this generated a jump higher on the back of US Dollar weakness. Most of the Euro gains were erased during the following days.

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Technical Outlook

The pair ended last week very close to the opening price and couldn’t break free from the 50 days Exponential Moving Average, which is almost flat, indicating a lack of momentum on both sides. Currently, price action is capped by two trend lines and the break of one of them will probably decide the next direction but until that happens the pair will probably show ranging price action. Horizontal support sits at 1.1700 and resistance is located at 1.1875; for a breakout to happen price needs to clear these zones as well.

Fundamental Outlook

The first release of the week will be the Eurozone Final version of the Consumer Price Index, scheduled Monday. This is an important gauge of inflation but the Final version tends to have the lowest impact. Tuesday the German IFO Business Climate will show the opinions of about 7,000 businesses about a 6-month outlook for the German economy and on the US Dollar side the only notable release will be the Building Permits, which shows how many construction permits were issued during the previous month.

Thursday the U.S. Final Gross Domestic Product will be released, showing changes in the total value of services and goods generated by the economy and the week ends Friday with the U.S. Durable Goods Orders, an indicator that shows changes in the value of orders placed for goods with a life expectancy of at least 3 years. Overall it’s a rather slow week, mostly due to the approaching of the Winter Holidays.

GBP/USD

Last week the pair bounced between support and resistance, a behavior mostly generated by the fundamentals: first the US Dollar weakened during the Fed meeting and then it was the Pound’s turn to go down after more Brexit concerns emerged.

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Technical Outlook

After failing to break 1.3450, the pair dropped into the confluence zone created by the support at 1.3320 and the 50 days Exponential Moving Average. Momentum is on the sellers’ side but as long as the mentioned support zone is intact, the pair’s direction is uncertain. A break will likely trigger a stronger drop but the focus will remain on Brexit negotiations so the Pound will be prone to sudden moves.

Fundamental Outlook

The Pound has a slow week ahead, with only a few notable releases. Wednesday BOE Governor Carney will speak before the Treasury Select Committee about the November Financial Stability Report. De pending on his attitude, the Pound may see increased volatility so caution is advised.

Thursday the Public Sector Net Borrowing comes out, showing the difference between spending and income for the Public Sector. A positive number shows deficit and a negative number shows surplus but the indicator is not a major market mover.

Friday the Current Account will be released, showing the value difference between imported and exported goods and the same day the Final version of the British GDP will come out. This is the main gauge of an economy’s performance but the Final version usually has a low impact on the currency.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Dec 25, 2017 6:10 am

WEEKLY ANALYSIS: CHRISTMAS WEEK - THIN TRADING VOLUMES AND IRREGULAR PRICE ACTION

EUR/USD

Weekly Analysis: The pair had a bullish week and seemed to gain some traction but from a longer term perspective it is still trading inside a range, without a definite bias. Moreover, this ranging behavior is likely to continue throughout this week due to the Christmas Holidays.

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Technical Outlook

Price bounced at the bullish trend line seen on the chart above and continued higher, reaching the bearish trend line and the horizontal resistance around 1.1875. This means that although the bias was bullish last week, we are not dealing with a breakout and the pair is still range bound. Monday and Tuesday most markets will be closed due to Christmas and volatility will probably remain irregular for the better part of the week. Caution is recommended because price may show sudden spikes due to the low liquidity, so a technical prediction is difficult to make.

Fundamental Outlook

During the first two days of the week, European and U.S. banks will be closed in celebration of the Christmas Holiday, so volatility will be highly affected and most markets will be closed. The first release of the week is scheduled Wednesday: the U.S. Consumer Confidence survey; however, we don’t expect its impact to be high considering that liquidity will be still affected by the Winter Holidays.

Thursday will be another slow day, with the U.S. Unemployment Claims as the only notable event and the week ands Friday with a release that usually has a high impact: the German Preliminary Consumer Price Index, which acts as the main gauge of inflation; however, its impact may be muted this time.

GBP/USD

After a strong climb that occurred at the beginning of last week, the pair showed choppy movement and retraced most of the gains. The macroeconomic environment was slow and contributed to the lack of directional movement.

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Technical Outlook

Price action is choppy and will probably remain so until January next year. For the short term we expect to see a touch of the 50 days Exponential Moving Average and the support around 1.3320 – 1.3300, where the next direction will be decided. A bounce or break in this zone can be followed by a move into the resistance at 1.3450 or the support at 1.3250 but trading volumes will be thin and may result in sudden spikes and erratic price movement.

Fundamental Outlook

For the first two days of the week UK banks will be closed due to Christmas and the rest of the week no important economic releases will take place. We expect choppy price action and irregular volatility.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Jan 01, 2018 4:47 pm

WEEKLY ANALYSIS: FIRST TRADING WEEK OF 2018 – US JOBS DATA IN THE SPOTLIGHT

EUR/USD


Weekly Analysis: The US Dollar ended the year on a bearish note, weakening for the entire last week against the Euro. The pair finished 2017 right on the key resistance at 1.2000 but it is unclear yet if we are dealing with a true break.

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Technical Outlook

After breaking the bearish trend line seen on the Daily chart above, the pair continued higher and breached the important barrier at 1.2000. The short term momentum is bullish but price action will be affected by low volumes during the early days of the coming week and this means that we may see either another period of strong movement or tight ranges. The Relative Strength Index is approaching overbought and 1.2000 is a key level, so the probability of a bounce lower from here is high.

Fundamental Outlook

Monday is the first day of the New Year, so most banks across the globe will be closed and no economic data will come out. Tuesday is again a slow day, without major indicators and action finally picks up Wednesday with the U.S. Manufacturing PMI and the FOMC Meeting Minutes, which will offer details about the latest FOMC rate decision and reasons that determined it.

Thursday we take a first look at US employment data with the release of the ADP Non-farm Employment Change, which is a report that shows changes in the total number of employed people, apart from the farming sector and Government.
The last release of the week but the most important is scheduled Friday: the Non-Farm Payrolls, which is the main gauge of employment in the United States. The report shows changes in the total number of employed people during the previous month, excluding the farming industry and usually has a high impact on the US Dollar.

GBP/USD

US Dollar weakness was seen across the board last week and the pair finished the year very close to 1.3500, on a bullish note.

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Technical Outlook

For this week we expect choppy price action, with the pair trapped between 1.3450 support and 1.3550 resistance. Monday the market will come to a stop due to New Year’s Day but action will pick up later in the week when the U.S. employment data will come out. A break outside the range we’ve just mentioned will probably be determined by the economic data released throughout the week.

Fundamental Outlook

Monday British banks will be closed, celebrating New Year’s Day and the rest of the week will be relatively slow, with only three surveys of purchasing managers. Tuesday the Manufacturing PMI will be released, followed Wednesday by the Construction PMI and Thursday by the Services PMI. These surveys show the opinions of purchasing managers from the respective sectors about business conditions in that sector but the impact is usually medium.

We wish you a Happy New Year!
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Jan 08, 2018 8:07 am

WEEKLY ANALYSIS: KEY RESISTANCE LEVELS TESTED. POSSIBLE LONG TERM UPTREND RESUMPTION

EUR/USD


Weekly Analysis: Last week price action slowed down and the pair traded in a relatively tight range between 1.2000 support and 1.2092 resistance. Overall it was an uneventful week and the pair is likely to enter a consolidation phase.

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Technical Outlook

After the big climb seen during the Winter Holidays, price is now bouncing between support and resistance in anticipation of the next breakout. Last year’s high at 1.2092 is a key level for long term price action and a break would show uptrend resumption, followed by moves higher (next potential resistance is located at 1.2280). If the pair bounces at the current resistance, we will probably see a move into the 50 days Exponential Moving Average and possibly 1.1900 – 1.1875 area; the oscillators are coming down from overbought, indicating that a move lower is likely.

Fundamental Outlook

The week opens with the release of the Eurozone Retail Sales scheduled Monday, which has a low-to-medium impact on the Euro and the next two days will lack any notable releases for both currencies.

Action picks up a bit Thursday with the release of the US Producer Price Index, which shows changes in the price that producers charge for their goods and services. This indicator has inflationary implications because usually a higher producer price translates into a higher consumer price.

Friday will be the busiest day of the week, with two important releases: the US Consumer Price Index (one of the main gauges of inflation) and the US Retail Sales. Both have a strong impact on the US Dollar, with higher numbers strengthening it, so we expect increased volatility, especially because the rest of the week lacks major releases.

GBP/USD

The pair had a mixed week, with the US Dollar showing brief moments of strength at the time of the FOMC Minutes release. The US jobs data came out worse than anticipated but the market reaction was jerky and without strong directional movement.

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Technical Outlook

Price bounced at 1.3616 resistance and appeared to move lower, towards 1.3450 support. This level can still be reached over the course of this week if the pair bounces again around 1.3600. The current level at 1.3550 will be important to watch on the lower time frames because the way price behaves around it will determine if the immediate target is 1.3600 – 1.3616 or 1.3450.

Fundamental Outlook

The Pound has a very slow economic week ahead, with Wednesday being the only day with notable releases: the Manufacturing Production and NIESR GDP Estimate. The former report shows changes in the total value of goods generated by the manufacturing sector and the latter is just an estimate of the Gross Domestic Product so its impact is sometimes overlooked by market participants.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Jan 15, 2018 9:35 am

FOREX NEWS: MAJOR BREAKOUTS UNDERWAY. BULLS TAKE CONTROL OF MEDIUM TERM PRICE ACTION

EUR/USD


Forex News: The Euro was boosted by news that the ECB might change their forward guidance to a more hawkish tone and also by positive news coming from the German political scene, later in the week. All this triggered a huge climb, breaking last year’s high.

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Technical Outlook

The break of 1.2092 shows that the long term uptrend has resumed and this makes 1.2280 the next target. This is a long term resistance that hasn’t been reached in a long time so we don’t know exactly how price will react once and if it touches it. Last week the pair has traveled a long distance to the upside and this usually calls for a retracement or a period of consolidation but as long as the pair remains above 1.2100, the bias is bullish.

Fundamental Outlook

Monday US banks will be closed in observance of Martin Luther King Day and no economic data will be released. Tuesday will be another slow day and action picks up a bit Wednesday with the U.S. Industrial Production and European Final CPI. These are indicators with a medium impact so we don’t expect huge movement at the time of release.

Thursday’s highlights will be the U.S. Building Permits and the Philly Fed Manufacturing Index but again, these have a low-to-medium influence on the greenback so the impact may be overlooked. The final release of the week will be the University of Michigan Consumer Sentiment scheduled Friday. This a survey that shows the opinions of consumers regarding economic conditions and it is important because a confident consumer is likely to spend more and this boosts the economy but it is not known as a strong market mover.

GBP/USD

US Dollar weakness was present across the board last week, allowing the Pound to make substantial advances to the north after a ranging period.

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Technical Outlook

The break of 1.3616 resistance marks the possible beginning of an extended period of bullish movement. The strong breakout will most likely be followed by a small retracement south but overall the pair is moving up and the US Dollar offers little resistance. The next resistance and target for the week is located at 1.3860, where we expect a bounce lower.

Fundamental Outlook

The Pound will be affected by only two major releases this week: the British Consumer Price Index scheduled Tuesday and the British Retail Sales scheduled Friday. The former is the main gauge of inflation in the UK, while the latter has a strong impact because sales made at retail levels represent the biggest part of consumer spending. Numbers above expectations for either one of them have the potential to strengthen the Pound.
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