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Weekly Commentary | Gdmfx | Technical

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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Feb 16, 2015 12:41 pm

FOREX TECHNICAL ANALYSIS: BROKEN RESISTANCE MARKS THE END OF SIDEWAYS MOVEMENT?


EUR/USD
Forex Technical Analysis: Last week the economic data which came out of the United States was disappointing and this allowed the Euro to climb against the US Dollar but the week had only one day when the pair moved strongly and overall price action was slow.

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Technical Outlook
Price is still confined in a tight range created by 1.1300 support and 1.1500 resistance. Considering the fact that last week only one day had decent movement and price was mostly flat, we expect a clean break-out this week but the direction will depend mostly on the fundamental aspect. The 50 day Exponential Moving Average is still angled downwards and price is trading below it but this doesn’t exclude a bullish breakout so for the week ahead keep an eye on 1.1500. A break of this level will probably generate an extended move into 1.1640 while a break of 1.1300 will make 1.1100 the next weekly target.

Fundamental Outlook
Monday the Eurogroup meetings take place and US banks will be closed, celebrating Presidents’ Day so there are increased chances of irregular volatility. Tuesday the main event is the release of the German ZEW Economic Sentiment which is a survey of about 275 German professional investors and analysts, focused on a 6 month outlook regarding German economic growth.

Wednesday is an important day for the US Dollar as the FOMC Meeting Minutes come out, offering insights into Fed’s latest meeting and possibly hints about future monetary policy direction. Thursday economic releases are scarce, with U.S. Manufacturing data being the only notable indicator, while Friday, France and Germany will announce their Manufacturing PMIs which act as leading indicators of economic health.


GBP/USD
The Bank of England increased economic growth forecasts and this coupled with weak U.S. data generated a rally above resistance. However, for the better part of the week price ranged.

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Technical Outlook
The pair moved above 1.5260 resistance and above the 50 day Exponential Moving Average, making the medium-term outlook bullish. We anticipate a climb into 1.5550 resistance zone but a break of this level is less likely considering that the pair is in a clear downtrend. If during the week the Relative Strength Index will reach overbought levels, the chances of bearish moves will increase.

Fundamental Outlook
British inflation data comes out Tuesday in the form of the Consumer Price Index, followed Wednesday by the Claimant Count Change which will show how many people applied for unemployment related social help. The same day the Official Bank Rate votes come out, showing if some of the MPC members changed their stance on the interest rate value. The final British release of the week comes Friday in the form of the Retail Sales; the indicator shows the change in the total value of sales made at retail outlets and is considered a high impact release.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Tue Feb 24, 2015 12:52 am

FOREX TECHNICAL ANALYSIS: PRICE ACTION DRIVEN BY THE TESTIMONIES OF HIGH-RANKING OFFICIALS


EUR/USD
Forex Technical Analysis: Last week Greece and the Eurogroup finally found a solution to the debt problem, although it seems to be just a short term fix. Surprisingly enough, the market did not react strongly to the news and the pair didn’t manage to break its range.

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Technical Outlook
Monday more discussions related to the Greek debt issue are expected so the market can still become volatile and we recommend caution. The horizontal channel created between 1.1500 and 1.1300 is still the most important technical pattern for short term price action and a breakout is imminent; once this happens, the pair can find support at 1.1100 or resistance at 1.1640. The 50 day Exponential Moving Average will also offer some resistance but considering price’s latest behaviour, if we see a breakout, this could easily move past the EMA. Our view at the moment is neutral anticipating a break of support or resistance.

Fundamental Outlook
Monday’s important event is the release of the German IFO Business Climate which in a survey derived from the opinions of about 7,000 businesses regarding economic conditions. Its large sample is what makes it important and usually triggers a strong impact. Tuesday Fed Chair Janet Yellen will testify on the Semi-annual Monetary Policy Report. This is part of a 2-day testimony which will continue Wednesday.

ECB President Mario Draghi will also testify Wednesday before the European Parliament on the ECB Annual Report 2013. Both the testimonies of Yellen and Draghi are considered high-impact events and strong volatility is expected. Thursday the U.S. Consumer Price Index is released, showing fluctuations in inflation and at the same time we will find out the Durable Goods Orders change.

Friday two more important indicators are released: the German CPI and the U.S. Prelim Gross Domestic Product. The former shows the state of German inflation, while the latter is considered the main gauge of U.S. economic performance, thus strong movement is likely to be generated.


GBP/USD
The pair remained above its 50 day Exponential Moving Average but no major advances were made. The strongest moves occurred when British employment data came out better than anticipated but the rest of the week was rather slow.

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Technical Outlook
We expect the current move to continue until the zone around 1.1550 is reached, but the bulls seem to lack strength and the Stochastic oscillator has already touched its 80 level, indicating overbought. This could mean that if price crosses the 50 period Exponential Moving Average to the downside, it could easily go through the support located around 1.5260, opening the door for an extended move towards 1.4950.Although price action was bullish last week, we favour the downside, especially if 1.5550 is touched and the Relative Strength Index becomes overbought, agreeing with the Stochastic.

Fundamental Outlook
The British Bankers’ Association will release the Mortgage Approvals Wednesday. The indicator offers insights into the British house market but its impact fluctuates depending on the difference between the anticipated number and the actual one. The Second Estimate Gross Domestic Product is released Thursday showing the anticipated value of the British GDP; although this is an estimated number, the accuracy is usually high and so is the impact on the Pound. Of course, the U. S. events will have a direct impact on the pair’s movement.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Mar 02, 2015 1:58 pm

FOREX TECHNICAL ANALYSIS: BEARS TRY TO RESUME DOWNTREND; OUTCOME DEPENDS ON U.S. EMPLOYMENT AND ECB PRESS CONFERENCE


EUR/USD
Forex Technical Analysis: Last week we witnessed a long anticipated breakout which took the pair below the support zone created around 1.1270 – 1.1300. The week was filled with testimonies of heads of central banks but Fed Chair Yellen’s speech had the highest impact as it reignited speculation about a rate hike.

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Technical Outlook
The consolidation pattern above 1.1270 and below 1.1500 seems to be broken to the downside, a fact which signals a potential resumption of the downtrend. The first bearish target of the week is located at 1.1100 but a move above 1.1270 – 1.1300 would imply the consolidation period is not over and will make the 50 period Exponential Moving Average a likely bullish target for the week.

Fundamental Outlook
The main event Monday will be the release of the European Consumer Price Index which will offer insights into the state of European inflation which has been a major concern of the ECB for quite a long while. Tuesday the Spanish unemployment numbers are released, while Wednesday we will see the first American jobs related data of the week in the form of the ADP Non Farm Employment Change.

Thursday is a crucial day for the euro as the ECB will announce the interest rate (no change anticipated) and ECB President Mario Draghi will hold a Press Conference which is known to be a huge market mover almost always. Friday the US Dollar will be in the spotlight as the Non Farm Employment Change is released; this is considered the most important jobs related indicator for the U.S. economy as it shows the number of new jobs created during the previous month. Employment levels are tightly correlated with consumer spending and each release has a high impact on the greenback.


GBP/USD
Last week we saw a bullish move which took the pair into resistance but soon after, price bounced lower and this could mean the short term uptrend is over.

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Technical Outlook
The latest moves up seem exhausted and the downtrend is ready to resume. Last week the resistance at 1.5550 was tested twice but the bulls failed to take price above this level, a fact which shows lack of strength for the bulls and makes us believe that the next move will find support at 1.5260. Before that can happen, price must move below the 50 period Exponential Moving Average but if this form of support is not surpassed soon, we will most likely see another encounter with 1.5550.

Fundamental Outlook
The first three days of the week are characterized by the release of British Purchasing Managers’ Indexes: Monday we have the Manufacturing PMI, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are all leading indicators of economic health focused on their respective sectors and usually values that exceed expectations are beneficial for the Pound. The last important British event of the week is scheduled Thursday in the form of the interest rate but since no change is anticipated, the event might go mostly unnoticed unless surprises occur. As always the U.S. events will have a direct and strong impact on the pair’s movement throughout the week.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Mar 09, 2015 12:48 pm

FOREX NEWS: EUROGROUP MEETINGS TO AFFECT THE EURO AS U.S. DOLLAR STRENGTH CONTINUES


EUR/USD
Forex News: Friday the Non Farm Payrolls showed an increase to 295K while analysts’ consensus was 240K thus the US Dollar strengthened substantially against the euro and the pair experienced a sharp selloff.

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Technical Outlook
Although the bears are in complete control of the pair and 1.1000 support was broken, we expect bullish pullbacks mainly because the current move seems overextended and both the Relative Strength Index and the Stochastic are deep in oversold territory. The main bias is of course bearish so we will probably see further downside movement after brief retracements; 1.0765 is the next potential support level.

Fundamental Outlook
Important political and financial personalities will attend today the Eurogroup Meetings. The Greek bailout will be one of the topics thus euro volatility might be present. Other than this, the fundamental scene is slow and no major economic indicators are released.


GBP/USD
The US Dollar strengthened across the board and the Pound-Dollar pair dropped for more than 200 pips Friday on the back of a strong U.S. Non Farm Payrolls report.

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Technical Outlook
The recent strength exhibited by the US Dollar is likely to continue throughout the week but bullish pullbacks are a distinct possibility today; however the extent of these bullish moves should be limited. Notable resistance is located at 1.5200 while support sits at 1.4830 but both levels are far away from current price so we don’t expect either of them to be touched today; support and resistance levels should be identified on lower time frames (i.e. 15 minutes chart) but these are less reliable.

Fundamental Outlook
There are no major economic releases scheduled for today so price action will be mostly influenced by technical factors.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Mar 16, 2015 12:08 pm

FOREX TECHNICAL ANALYSIS: U.S. DOLLAR AT HISTORICAL HIGHS – FED INTEREST RATE TAKES CENTER STAGE


EUR/USD
Forex Technical Analysis: The pair continued to drop throughout last week and so far, there is no real sign of downtrend weakness. The bulls managed to take price higher during one day only but the gains were quickly erased.

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Technical Outlook
Profit taking might take price higher this week but the bears are the strongest they have been in many years so we anticipate further downside movement after brief bullish pullbacks. The current level at 1.0500 could not be clearly broken last week but price is likely to surpass it early this week. The Relative Strength Index and the Stochastic are oversold and this might generate retracements that will most likely find resistance on the lower time-frame charts.

Fundamental Outlook
Monday ECB President Mario Draghi will speak in Frankfurt at a finance summit and this could be a reason for sharp moves but the extent of the impact is not fully known, depending on the topics he will discuss.

Tuesday’s main releases are the German ZEW Economic Sentiment survey and the U.S. Building Permits but Wednesday will be the most important day of the week for the US Dollar, as the Fed Meetings will take center stage. The interest rate is announced (no change anticipated yet), a press conference is held and the FOMC will release Economic Projections and a Statement. This cluster of events is likely to have a strong impact on the greenback, especially because speculation about a rate hike in June is increasing.

Thursday the ECB will announce their targeted LTRO (Long Term Refinancing Option) and the European Union Economic Summit will begin. Friday no major indicators are scheduled for release.


GBP/USD
The pair printed a new multi-year low last week, the downtrend is renewed and important support was broken. It was another week when the bears were in complete control and price traveled sharply south.

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Technical Outlook
The support at 1.4830 was an important barrier and now that it is broken, we expect further downside movement. However, over the last two weeks price traveled very fast and this type of movement is likely to be followed by a consolidation period. We expect a pullback into 1.4830, which is likely to become resistance but a move above it is not out of the question. The overall bias remains strongly bearish.

Fundamental Outlook
Wednesday is the most important day of the week for the Pound: the Bank of England will make public the latest interest rate votes and the Claimant Count Change is released, showing fluctuations in the number of people who ask for unemployment related benefits. The same day the British Annual Budget is released, showing financial objectives but also levels of spending and income for the government. As always, the U.S. events will have a direct impact on the pair’s direction.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Mar 23, 2015 1:58 pm

FOREX TECHNICAL ANALYSIS: DOWNTREND WAVERS. DOLLAR STILL HAS STEAM LEFT.


EUR/USD
Forex Technical Analysis: The Dollar lost its appeal last week as the Fed showed concern about American inflation, postponing a potential rate hike. As a result, the entire week was controlled by the bulls and the pair bounced at support.

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Technical Outlook
The bullish move which began last week is likely to continue until 1.1000 – 1.1100 zone is reached again. If this new encounter with resistance will coincide with an overbought condition of the Stochastic and Relative Strength Index, we expect bearish pressure to increase and price to start downside motion again. If the 50 period Exponential Moving Average will be in close vicinity, it will create a confluence zone which will be hard to break. To the downside, first support is located at 1.0640 followed by the zone around 1.0500.

Fundamental Outlook
Monday ECB President Mario Draghi will testify before the European Parliament on monetary policy. As always, his public appearances are a reason for increased volatility and should be treated with caution. Tuesday the French and German Manufacturing PMIs are released, showing the opinions of purchasing managers about the state of the manufacturing sector. Lately these surveys have a mild impact on the market but readings that differ a lot from analysts’ consensus might create strong movement.

A more important indicator is released the same day: the U.S. Consumer Price Index. This is one of the most important gauges of inflation and might affect strongly the greenback’s next move. Wednesday we have the German IFO Business climate and the U.S. Durable Goods Orders, again two indicators which lost some of their ability to move the market strongly but still, better numbers will strengthen the respective currency.

Thursday lacks major news releases and Friday the U.S. final version of the Gross Domestic Product is released, followed later in the day by a speech delivered by Fed Chair Janet Yellen.


GBP/USD
Although it was a choppy week, price finished it higher, on the back of U.S. Dollar weakness. Also profit taking by traders who were short on the pair, helped the pair in its weekly climb.

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Technical Outlook
Although we had a bullish week, this doesn’t mean the downtrend is over and this week we expect the pair to descend into the zone located near 1.4640. Keep in mind that both oscillators are moving out of oversold territory at this suggests that we may see further upside movement. If this is the case, the first barrier in front of rising prices is located at 1.5000 followed by the 50 Period Exponential Moving Average.

Fundamental Outlook
Two important British events make this week’s headlines: Tuesday the Consumer Price Index is released, offering information about U.K. inflation and Thursday the Retail Sales numbers come out. The retail sector is one of the most important for an economy and that’s the reason why higher values usually strengthen the Pound and the opposite is true for lower numbers.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Mar 30, 2015 2:53 pm

FOREX TECHNICAL ANALYSIS: U.S. JOBS SITUATION: A STEP AHEAD FOR THE DOLLAR OR A PUSH BACK?


EUR/USD
Forex Technical Analysis: Last week’s economic data was mixed and so was the pair’s path. Movement was choppy, with a lot of quick reversals on intra-day charts. Price bounced at resistance but the bears weren’t able to take price below support so uncertainty is still present.

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Technical Outlook
The pair tried several times to move above 1.1000 but failed to do so and now rejection candles (long upper wicks) are visible on the Daily chart. The Stochastic is moving upwards but it is starting to curve and price came in close vicinity to a confluence zone created by the 50 period Exponential Moving Average and horizontal resistance. On top of these facts, the main trend is down so we expect this week to belong to the bears. First support, although a minor one, is located at 1.0780, followed by the important level at 1.0500.

Fundamental Outlook
The first day of the week marks the release of the German Preliminary Consumer Price Index which is the main gauge of German inflation. Since the German economy is of major importance to the entire Euro Zone, the release is likely to have a strong impact. European CPI follows Tuesday. Inflation has been a worrying issue lately because ECB’s target is just below 2.0% and current levels are considered way to low.

Wednesday the ADP Non-Farm Employment Change comes out, offering us the first look into the U.S. jobs situation. The report is released by a privately owned company and tries to mimic the more important Government report released 2 days later. Friday many banks around the world will be closed in observance of Good Friday so volatility might be affected but the United States will release the Non-Farm Employment Change which is considered the most important jobs-related indicator. A higher number is beneficial for the greenback because it shows a healthy jobs market and suggests that consumer spending is likely to pick up in the near future.


GBP/USD
The pair remained inside a tight horizontal channel for almost the entire week although some attempts to break the range were made. Both British and U.S. data was mixed and this contributed to the choppy movement.

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Technical Outlook
During every day of the last week the pair tested the support at 1.4830 but the bears couldn’t break the level. We expect the choppy price action to continue during the first days of this week but the pair is under bearish pressure so we consider that a break of the mentioned level will soon follow. If this is the case, price will head towards the next support, which is located at 1.4650 but a bullish break of 1.5000 would invalidate this scenario.

Fundamental Outlook
Tuesday the British Current Account is released, showing the difference between imported and exported goods during the previous quarter. At the same time the Final Gross Domestic Product is released but this version tends to have the lowest impact out of the three (Preliminary, Second Estimate and Final).
The British Manufacturing PMI comes out Wednesday, followed Thursday by the Construction PMI and Friday U.K. banks are closed due to Good Friday so we expect slow trading until the release of the U.S. Non-Farm Payrolls.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Apr 06, 2015 12:37 pm

FOREX TECHNICAL ANALYSIS: SLOW WEEK AHEAD AS EASTER HOLIDAYS TAKE A BITE OUT OF VOLATILITY


EUR/USD
Forex Technical Analysis: Last week started with the bears in control but the pair moved higher after a bounce at 1.0720 and a disappointing U.S. jobs report. Major resistance wasn’t broken but the downtrend is wavering.

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Technical Outlook
The bullish price action was stopped by the resistance at 1.1000 but the pair is supported by a bullish trend line which will be the first barrier if the sellers try to take price lower. To the upside the 50 period Exponential Moving Average combined with 1.1000 – 1.1100 zone will offer resistance and a break would open the door for a move close to 1.1450 which is the next level of interest. Before price will decide direction we expect another encounter with the bullish trend line.

Fundamental Outlook
Monday many banks around the world will be closed in celebration of Easter and the fundamental scene is pretty slow. The only noteworthy release is the U.S. Non-Manufacturing PMI which is a leading indicator of economic health derived from the opinions of purchasing managers outside the manufacturing sector.

Wednesday we’ll keep an eye on European Retail Sales numbers and later in the day the FOMC will release the minutes of their latest meeting, containing in-depth details about the reasons which influenced their latest interest rate vote. Thursday’s only highlight is the release of the U.S. Unemployment Claims while Friday will be another slow day in terms of European and U.S. economic news releases.


GBP/USD
The entire last week was very slow for the Pound-Dollar pair except for Friday when a worse than expected U.S. employment report drove price higher. Price sits now above support but resistance is not yet threatened.

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Technical Outlook
Lately price moved many times above and below 1.4830 but wasn’t able to move away decisively. The latest move could be what the bulls were waiting for and we might see further upside action. However if the sellers manage to move price quickly below the mentioned level, a new leg of the downtrend might start. The levels to watch this week (apart from 1.4830) are 1.5000 as resistance and 1.4635 as support but keep an eye on the Daily 50 period EMA because it could offer resistance as well.

Fundamental Outlook
Tuesday the United Kingdom will release the Services PMI which will offer insights into the health of the services sector from the viewpoint of purchasing managers. Wednesday the Bank of England will announce the interest rate decision but since no change is expected yet and no press conference takes place, we don’t believe the event will create strong moves. Friday the British Manufacturing Production numbers come out followed by an estimate of the Gross Domestic Product. The strength of the moves generated by these events will depend a lot on the difference between analysts’ forecast and the actual numbers. As always the pair’s movement will be also affected by the U.S. events.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Apr 13, 2015 1:36 pm

FOREX TECHNICAL ANALYSIS: DOWNTREND REGAINS MOMENTUM. ECB MEETING IN THE SPOTLIGHT


EUR/USD
Forex Technical Analysis: Last week the bears took control of the pair and managed to take price almost 500 pips lower. Each day finished lower than it started and only brief bullish movement was seen.

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Technical Outlook
The bullish trend line was broken decisively last week after a bounce at the 50 period Exponential Moving Average on a Daily chart and now the bears are in control of the pair. The oscillators don’t indicate oversold condition but we expect price to pause or even bounce higher if the important support at 1.0500 is reached. First potential resistance is located at 1.0720 but the bias remains bearish, with the possibility of bullish pullbacks.

Fundamental Outlook
Monday the fundamental scene is slow and no major news is released but Tuesday an important economic indicator will affect the US Dollar: the U.S. Retail Sales. The Fed is closely watching how the economy performs and an increase in sales made at a retail level could mean that we are one a step closer to a rate hike.

Wednesday the ECB will announce the interest rate and President Mario Draghi will hold a press conference which will offer more details about future monetary policy. The press conference is almost always accompanied by strong reaction on euro related pairs so caution is recommended.

Thursday keep an eye on the U.S. Building Permits and Friday the U.S. CPI will be the main market mover because this is one of the most important gauges of inflation.


GBP/USD
Dollar strength was seen against the Pound as well and the pair traveled south for the entire week, breaking the important support located at 1.4830. The Bank of England kept the interest rate unchanged at 0.50% and didn’t offer hints about the next increase.

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Technical Outlook
After breaking 1.4830 decisively the pair traveled into the support located in the zone around 1.4635 but although the week finished below this level, the break cannot be considered valid yet. However, as long as price remains below 1.4830, the bias is negative and we expect the downtrend to continue. If this is the case, the next support is located around 1.4350, a level better seen on a Weekly chart.

Fundamental Outlook
British inflation data comes out Tuesday in the form of the Consumer Price Index and Friday we will get insights into the British unemployment situation once the Claimant Count Change is released. Other than that the Pound has a slow week in terms of news releases and center stage will be held by the U.S. announcements.
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Re: Weekly Commentary | Gdmfx | Technical

Postby GDMFX » Mon Apr 20, 2015 1:08 pm

FOREX TECHNICAL ANALYSIS: EUROGROUP MEETINGS AND GREEK DEBT HEADLINE THE WEEK AHEAD


EUR/USD
Forex Technical Analysis: Last week the bulls managed to take the pair higher after a move close to key support. The U.S. economic data released throughout the week didn’t match analysts’ expectations and this allowed the euro to edge higher.

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Technical Outlook
The support zone around 1.0500 proved strong last week but the climb is not a trend changer. It is normal for price to make several attempts before breaking an important level so we still consider that a move below 1.0500 is possible. There is strong resistance in close vicinity of price, represented by the daily 50 period Exponential Moving Average and by a bearish trend line visible on the chart above. If this resistance zone is surpassed, the next place where bearish movement can resume is located at 1.1000.

Fundamental Outlook
The week ahead is headlined by the Eurogroup Meetings which take place Friday. The meetings carry extra weight this time because a solution must be reached for the Greek debt problem. There have been talks about a potential Greek separation from the European Union if progress in the debt issue is not made but so far an exit remains questionable.

Before the Eurogroup Meetings take place the German ZEW Economic Sentiment Survey is announced Tuesday, showing the opinions of professional investors and analysts about the state of the German economy. Thursday the German and French Manufacturing PMIs are released and Friday we will take a look info U.S. Durable Goods Orders. This indicator focuses on changes in orders for goods with a life expectancy of at least 3 years. Because these goods are usually more expensive, an increase in demand shows that consumers are willing to spend money and this leads to increased economic activity.


GBP/USD
The week that just ended belonged almost entirely to the bulls and the pair traveled about 500 pips to the upside before retracing slightly lower. Resistance was pierced but the week finished below it, mostly due to profit taking on long positions.

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Technical Outlook
The last daily candle has a long upper wick and is commonly known as a pin bar. This is a sign of rejection and shows that 1.5000 might be the place where bearish price action resumes. Price is sitting on the 50 period Exponential Moving Average and for now we cannot make any prediction about a break or bounce scenario but a move below this dynamic resistance would increase the chances of an extended drop. The levels to watch this week are 1.4830 as support and 1.5000 as resistance.

Fundamental Outlook
The Pound has a slow economic week ahead, with only two notable releases: Wednesday the Bank of England will reveal the votes on the latest rate decision and although no change in the structure is expected, it’s a good opportunity for traders to gauge the overall stance of the BoE regarding a rate hike. Thursday the British Retail Sales come out; the impact of this indicator is usually high because sales made on a retail level represent a major part of the economy.
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