FOREX NEWS: US DOLLAR CONTINUES ITS ADVANCE. EURO BULLS FIGHT BACK
EUR/USD
Forex News: The US Dollar gained against most of its counterparts as yesterday’s reports showed improvements for the US economy and traders’ interest for the American currency was renewed.
Technical Outlook
The pair fell for almost the entire day and the downtrend has new found strength as 1.3400 support was clearly broken. The next important support level is located at 1.3295 but the current level of 1.3365 is very likely to stop short term movement as we will probably see price stall here. The day ahead lacks major economic releases thus ranging price action might be in order.
Fundamental Outlook
The German Factory Orders are announced at 6:00 am GMT and expected to increase from -1.7% to 0.5%, a fact which would benefit the Euro; later in the day, at 12:30 pm GMT the US Trade Balance is released, showing the difference between imported and exported goods. The expected figure is -44.2B and values closer to zero will most likely strengthen the greenback. Both indicators usually have a medium-impact on the market but surprising numbers can increase their importance.
GBP/USD
United Kingdom’s Services PMI posted a better than expected value and momentarily strengthened the Pound; however, the rally couldn’t be continued and the Dollar erased some of the Pound’s early gains.
Technical Outlook
The first logical place where downwards motion can be resumed is the resistance located at 1.6920, but considering the way the pair has been moving lately, we might see this resumption occur before the level is hit. The US Dollar is strong at the moment and bullish moves should be regarded as corrections, not reversals of the medium term downtrend. The first level of interest to the downside is 1.6809.
Fundamental Outlook
The main Pound-affecting event of the day is the release of the UK Manufacturing Production which is expected to change to 0.7% from last month’s -1.3%. The indicator measures change in the output produced by the manufacturing sector and is considered a high-impact indicator; the time of the release is 8:30 am GMT and better values will most likely strengthen the Pound.