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Old 18-11-2014, 13:23
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Default Re: Technical News | GDMFX Brokerage | Daily

FOREX NEWS: BRITISH INFLATION IN THE FOCUS – POUND HIGHLY INFLUENCED BY THE CPI READING



EUR/USD
Forex News: Yesterday the sellers managed to reverse the initial bullish breakout and to bring the pair back inside the horizontal channel. ECB President Mario Draghi mentioned that added stimulus is needed to bring the economy back on the right track and this created further Euro weakness.


Technical Outlook
Although the channel created by 1.2500 resistance and 1.2400 support was broken, price returned inside, signaling that the pair might be headed towards 1.2400. The bias is slightly bearish but as long as price cannot exit the channel and remain outside, the ranging period is not over and we might see further choppy price action.

Fundamental Outlook
At 10:00 am GMT the German ZEW Economic Sentiment survey is released and expected to show a value of 0.9, an increase from last month’s -3.6. The survey tracks optimism among German professional analysts and investors and usually a higher than anticipated number strengthens the Euro.

The American Producer Price Index will be released at 1:30 pm GMT and expected to change -0.1%, same as last month. The indicator has inflationary implications because a higher price charged by producers will be eventually passed on to the retail consumer so higher values usually strengthen the US Dollar.


GBP/USD
The pair dropped yesterday after a bullish move which brought price in close vicinity of 1.5750 resistance. Almost the entire day was controlled by the bears but support was not threatened.


Technical Outlook
The outlook is once again bearish as the pair is still trading below the 50 period Exponential Moving Average after a failed attempt to move above it. The first support and potential target for the day is located at 1.5590, while resistance still sits at 1.5750 but the day’s bias will be determined by the British inflation numbers released in the morning.

Fundamental Outlook
The British Consumer Price Index is scheduled for release at 9:30 am GMT and the expected change is 1.2%, same as last month. Bank of England Governor Mark Carney recently expressed his concerns about downside risks for inflation and this could mean that a lower value of the CPI might be perceived more bearish than usual, generating Pound weakness.
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