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Old 24-07-2014, 12:02
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Default Technical News | GDMFX Brokerage | Daily

FOREX NEWS: MANUFACTURING DATA BRINGS THE EURO OUT OF CONSOLIDATION PHASE



EUR/USD
Forex News: Price moved sideways for the entire day yesterday as no major economic indicators were released by either the United States or Europe. The trading session was extremely slow and no important levels were broken.



Technical Outlook
The pair almost paused yesterday, consolidating below 1.3480 and moving in a 20 pip range for almost the entire day, making trading very difficult. Also, yesterday’s price action doesn’t add any clues to the pair’s next direction so we maintain our belief that price will correct slightly to the north before dropping further. On a four hour chart the Relative Strength Index is coming out of oversold territory, a fact which adds to the bias showed above.

Fundamental Outlook
The Euro will be influenced today by two releases: at 7:00 am GMT the French Manufacturing PMI is scheduled and at 7:30 am GMT, the same indicator for the German economy comes out. The French PMI is expected to increase from 48.2 to 48.5 while the German PMI is anticipated to change from 52.0 to 52.2. These are surveys derived from the opinions of purchasing managers from the Manufacturing sector and better readings show optimism, usually strengthening the single currency.


GBP/USD
All members of BOE’s Monetary Policy Committee voted to keep rates unchanged but the Minutes of their latest meeting were a bit more dovish than market participants anticipated and the Pound weakened throughout the day as a result.



Technical Outlook
We expect the current direction to continue until 1.7010 is touched as this is the first level of support and it is likely to act as a magnet for price. Yesterday price moved north to touch 1.7095 and immediately bounced lower, showing that this level is now resistance. If the Relative Strength Index will indicate oversold conditions once support is touched, the probability of a move north will increase.

Fundamental Outlook
The main event for the Pound will be the release of UK’s Retail Sales, scheduled at 8:30 am GMT. Sales made at a retail level represent a major part of the economy and thus hold a great importance for the Pound’s strength. The anticipated change is 0.2%, compared with last month’s -0.5%, a fact which would strengthen the Pound if it were to come true.
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