FOREX NEWS: BREXIT FALLOUT BRINGS FED RATE SPECULATION
EUR/USD
Forex News: The US Dollar weakened yesterday and this allowed the pair to move up, breaking 1.1100 resistance. Most of the dollar weakness was generated by speculation that the Fed will not raise rates until 2018 to prevent a deeper impact of the UK exit.
Technical Outlook
The break of 1.1100 opens the door for a move into 1.1150. The 50 period Exponential Moving Average is in close vicinity of the latter level and the two combined will create a confluent zone of resistance that will possibly become a good place for the pair to resume downside movement. Of course the geopolitical aspect still remains the most important and price direction will depend mostly on that rather than technical support and resistance.
Fundamental Outlook
The European Flash Estimate version of the Consumer Price Index is released today at 9:00 am GMT and is expected to show a 0.0% change from the previous -0.1%. The release may be mostly overlooked by market participants, especially if the actual value matches analysts’ prediction but under normal circumstances, higher numbers strengthen the Euro.
GBP/USD
The Pound recuperated some of the losses and moved higher yesterday, mostly on the back of weakness in the US Dollar, generated by speculation about Fed rates.
Technical Outlook
It appears as the weekly gap will be closed soon and the pair may find resistance around 1.3655. If this happens, we expect the bears to regain control of price action and the pair to move below 1.3483; the Stochastic is approaching overbought and this adds to the possibility of movement south. The pair remains high risk.
Fundamental Outlook
The British Final version of the Gross Domestic Product will be released today at 8:30 am GMT. This indicator acts as an overall gauge of economic performance but the Final version is the least important. Nonetheless, higher values than the previous 0.4% can strengthen the Pound but the extent should be limited.