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  #181  
Old 18-12-2017, 09:21
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: PRICE ACTION BECOMES CHOPPIER AS WE GET CLOSER TO THE WINTER HOLIDAYS


EUR/USD


Weekly Analysis: Last week the Fed raised the interest rate from <1.25% to <1.50% as expected but Fed Chair Yellen was somewhat dovish during her press conference and this generated a jump higher on the back of US Dollar weakness. Most of the Euro gains were erased during the following days.



Technical Outlook

The pair ended last week very close to the opening price and couldn’t break free from the 50 days Exponential Moving Average, which is almost flat, indicating a lack of momentum on both sides. Currently, price action is capped by two trend lines and the break of one of them will probably decide the next direction but until that happens the pair will probably show ranging price action. Horizontal support sits at 1.1700 and resistance is located at 1.1875; for a breakout to happen price needs to clear these zones as well.

Fundamental Outlook

The first release of the week will be the Eurozone Final version of the Consumer Price Index, scheduled Monday. This is an important gauge of inflation but the Final version tends to have the lowest impact. Tuesday the German IFO Business Climate will show the opinions of about 7,000 businesses about a 6-month outlook for the German economy and on the US Dollar side the only notable release will be the Building Permits, which shows how many construction permits were issued during the previous month.

Thursday the U.S. Final Gross Domestic Product will be released, showing changes in the total value of services and goods generated by the economy and the week ends Friday with the U.S. Durable Goods Orders, an indicator that shows changes in the value of orders placed for goods with a life expectancy of at least 3 years. Overall it’s a rather slow week, mostly due to the approaching of the Winter Holidays.

GBP/USD

Last week the pair bounced between support and resistance, a behavior mostly generated by the fundamentals: first the US Dollar weakened during the Fed meeting and then it was the Pound’s turn to go down after more Brexit concerns emerged.



Technical Outlook

After failing to break 1.3450, the pair dropped into the confluence zone created by the support at 1.3320 and the 50 days Exponential Moving Average. Momentum is on the sellers’ side but as long as the mentioned support zone is intact, the pair’s direction is uncertain. A break will likely trigger a stronger drop but the focus will remain on Brexit negotiations so the Pound will be prone to sudden moves.

Fundamental Outlook

The Pound has a slow week ahead, with only a few notable releases. Wednesday BOE Governor Carney will speak before the Treasury Select Committee about the November Financial Stability Report. De pending on his attitude, the Pound may see increased volatility so caution is advised.

Thursday the Public Sector Net Borrowing comes out, showing the difference between spending and income for the Public Sector. A positive number shows deficit and a negative number shows surplus but the indicator is not a major market mover.

Friday the Current Account will be released, showing the value difference between imported and exported goods and the same day the Final version of the British GDP will come out. This is the main gauge of an economy’s performance but the Final version usually has a low impact on the currency.
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  #182  
Old 25-12-2017, 06:12
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: CHRISTMAS WEEK - THIN TRADING VOLUMES AND IRREGULAR PRICE ACTION

EUR/USD

Weekly Analysis: The pair had a bullish week and seemed to gain some traction but from a longer term perspective it is still trading inside a range, without a definite bias. Moreover, this ranging behavior is likely to continue throughout this week due to the Christmas Holidays.


Technical Outlook

Price bounced at the bullish trend line seen on the chart above and continued higher, reaching the bearish trend line and the horizontal resistance around 1.1875. This means that although the bias was bullish last week, we are not dealing with a breakout and the pair is still range bound. Monday and Tuesday most markets will be closed due to Christmas and volatility will probably remain irregular for the better part of the week. Caution is recommended because price may show sudden spikes due to the low liquidity, so a technical prediction is difficult to make.

Fundamental Outlook

During the first two days of the week, European and U.S. banks will be closed in celebration of the Christmas Holiday, so volatility will be highly affected and most markets will be closed. The first release of the week is scheduled Wednesday: the U.S. Consumer Confidence survey; however, we don’t expect its impact to be high considering that liquidity will be still affected by the Winter Holidays.

Thursday will be another slow day, with the U.S. Unemployment Claims as the only notable event and the week ands Friday with a release that usually has a high impact: the German Preliminary Consumer Price Index, which acts as the main gauge of inflation; however, its impact may be muted this time.

GBP/USD

After a strong climb that occurred at the beginning of last week, the pair showed choppy movement and retraced most of the gains. The macroeconomic environment was slow and contributed to the lack of directional movement.


Technical Outlook

Price action is choppy and will probably remain so until January next year. For the short term we expect to see a touch of the 50 days Exponential Moving Average and the support around 1.3320 – 1.3300, where the next direction will be decided. A bounce or break in this zone can be followed by a move into the resistance at 1.3450 or the support at 1.3250 but trading volumes will be thin and may result in sudden spikes and erratic price movement.

Fundamental Outlook

For the first two days of the week UK banks will be closed due to Christmas and the rest of the week no important economic releases will take place. We expect choppy price action and irregular volatility.
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  #183  
Old 01-01-2018, 16:43
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: FIRST TRADING WEEK OF 2018 – US JOBS DATA IN THE SPOTLIGHT

EUR/USD

Weekly Analysis: The US Dollar ended the year on a bearish note, weakening for the entire last week against the Euro. The pair finished 2017 right on the key resistance at 1.2000 but it is unclear yet if we are dealing with a true break.




Technical Outlook

After breaking the bearish trend line seen on the Daily chart above, the pair continued higher and breached the important barrier at 1.2000. The short term momentum is bullish but price action will be affected by low volumes during the early days of the coming week and this means that we may see either another period of strong movement or tight ranges. The Relative Strength Index is approaching overbought and 1.2000 is a key level, so the probability of a bounce lower from here is high.

Fundamental Outlook

Monday is the first day of the New Year, so most banks across the globe will be closed and no economic data will come out. Tuesday is again a slow day, without major indicators and action finally picks up Wednesday with the U.S. Manufacturing PMI and the FOMC Meeting Minutes, which will offer details about the latest FOMC rate decision and reasons that determined it.

Thursday we take a first look at US employment data with the release of the ADP Non-farm Employment Change, which is a report that shows changes in the total number of employed people, apart from the farming sector and Government.

The last release of the week but the most important is scheduled Friday: the Non-Farm Payrolls, which is the main gauge of employment in the United States. The report shows changes in the total number of employed people during the previous month, excluding the farming industry and usually has a high impact on the US Dollar.

GBP/USD

US Dollar weakness was seen across the board last week and the pair finished the year very close to 1.3500, on a bullish note.




Technical Outlook

For this week we expect choppy price action, with the pair trapped between 1.3450 support and 1.3550 resistance. Monday the market will come to a stop due to New Year’s Day but action will pick up later in the week when the U.S. employment data will come out. A break outside the range we’ve just mentioned will probably be determined by the economic data released throughout the week.

Fundamental Outlook

Monday British banks will be closed, celebrating New Year’s Day and the rest of the week will be relatively slow, with only three surveys of purchasing managers. Tuesday the Manufacturing PMI will be released, followed Wednesday by the Construction PMI and Thursday by the Services PMI. These surveys show the opinions of purchasing managers from the respective sectors about business conditions in that sector but the impact is usually medium.

We wish you a Happy New Year!

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  #184  
Old 08-01-2018, 08:05
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: KEY RESISTANCE LEVELS TESTED. POSSIBLE LONG TERM UPTREND RESUMPTION

EUR/USD


Weekly Analysis: Last week price action slowed down and the pair traded in a relatively tight range between 1.2000 support and 1.2092 resistance. Overall it was an uneventful week and the pair is likely to enter a consolidation phase.



Technical Outlook

After the big climb seen during the Winter Holidays, price is now bouncing between support and resistance in anticipation of the next breakout. Last year’s high at 1.2092 is a key level for long term price action and a break would show uptrend resumption, followed by moves higher (next potential resistance is located at 1.2280). If the pair bounces at the current resistance, we will probably see a move into the 50 days Exponential Moving Average and possibly 1.1900 – 1.1875 area; the oscillators are coming down from overbought, indicating that a move lower is likely.

Fundamental Outlook

The week opens with the release of the Eurozone Retail Sales scheduled Monday, which has a low-to-medium impact on the Euro and the next two days will lack any notable releases for both currencies.
Action picks up a bit Thursday with the release of the US Producer Price Index, which shows changes in the price that producers charge for their goods and services. This indicator has inflationary implications because usually a higher producer price translates into a higher consumer price.

Friday will be the busiest day of the week, with two important releases: the US Consumer Price Index (one of the main gauges of inflation) and the US Retail Sales. Both have a strong impact on the US Dollar, with higher numbers strengthening it, so we expect increased volatility, especially because the rest of the week lacks major releases.

GBP/USD

The pair had a mixed week, with the US Dollar showing brief moments of strength at the time of the FOMC Minutes release. The US jobs data came out worse than anticipated but the market reaction was jerky and without strong directional movement.




Technical Outlook


Price bounced at 1.3616 resistance and appeared to move lower, towards 1.3450 support. This level can still be reached over the course of this week if the pair bounces again around 1.3600. The current level at 1.3550 will be important to watch on the lower time frames because the way price behaves around it will determine if the immediate target is 1.3600 – 1.3616 or 1.3450.

Fundamental Outlook

The Pound has a very slow economic week ahead, with Wednesday being the only day with notable releases: the Manufacturing Production and NIESR GDP Estimate. The former report shows changes in the total value of goods generated by the manufacturing sector and the latter is just an estimate of the Gross Domestic Product so its impact is sometimes overlooked by market participants.

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  #185  
Old 15-01-2018, 09:29
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX NEWS: MAJOR BREAKOUTS UNDERWAY. BULLS TAKE CONTROL OF MEDIUM TERM PRICE ACTION

EUR/USD


Forex News: The Euro was boosted by news that the ECB might change their forward guidance to a more hawkish tone and also by positive news coming from the German political scene, later in the week. All this triggered a huge climb, breaking last year’s high.



Technical Outlook

The break of 1.2092 shows that the long term uptrend has resumed and this makes 1.2280 the next target. This is a long term resistance that hasn’t been reached in a long time so we don’t know exactly how price will react once and if it touches it. Last week the pair has traveled a long distance to the upside and this usually calls for a retracement or a period of consolidation but as long as the pair remains above 1.2100, the bias is bullish.

Fundamental Outlook


Monday US banks will be closed in observance of Martin Luther King Day and no economic data will be released. Tuesday will be another slow day and action picks up a bit Wednesday with the U.S. Industrial Production and European Final CPI. These are indicators with a medium impact so we don’t expect huge movement at the time of release.

Thursday’s highlights will be the U.S. Building Permits and the Philly Fed Manufacturing Index but again, these have a low-to-medium influence on the greenback so the impact may be overlooked. The final release of the week will be the University of Michigan Consumer Sentiment scheduled Friday. This a survey that shows the opinions of consumers regarding economic conditions and it is important because a confident consumer is likely to spend more and this boosts the economy but it is not known as a strong market mover.

GBP/USD

US Dollar weakness was present across the board last week, allowing the Pound to make substantial advances to the north after a ranging period.



Technical Outlook

The break of 1.3616 resistance marks the possible beginning of an extended period of bullish movement. The strong breakout will most likely be followed by a small retracement south but overall the pair is moving up and the US Dollar offers little resistance. The next resistance and target for the week is located at 1.3860, where we expect a bounce lower.

Fundamental Outlook

The Pound will be affected by only two major releases this week: the British Consumer Price Index scheduled Tuesday and the British Retail Sales scheduled Friday. The former is the main gauge of inflation in the UK, while the latter has a strong impact because sales made at retail levels represent the biggest part of consumer spending. Numbers above expectations for either one of them have the potential to strengthen the Pound.

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  #186  
Old 22-01-2018, 09:44
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: WORLD ECONOMIC FORUM MEETINGS START IN DAVOS. STRONG MARKET IMPACT EXPECTED

EUR/USD


Weekly Analysis: Last week we saw several attempts to move above the resistance at 1.2280 but all resulted in bounces lower. Overall the pair remained consolidation phase, but pressure is mounting for a stronger move.




Technical Outlook

It is now clear that 1.2280 is a strong resistance zone, so a break or bounce here will be important for medium term price action. The pair is in an uptrend, so there’s a high possibility of a move above 1.2280 – 1.2300, which would open the door for 1.2500, which is a psychological level (such a move will likely take more than one week). On the other hand, the RSI is showing bearish divergence (price is making higher highs and the oscillator is showing a double top) and this is a warning sign that a deeper move south will follow. If this is the case the first support is located at 1.2092.

Fundamental Outlook

Price action during the week ahead will likely be influenced by the World Economic Forum (WEF) Meetings held in Davos. The meetings will last all week so caution is recommended. Apart from this, the Euro will be affected by the ZEW Economic sentiment released Tuesday, while Wednesday the focus will be on the US Dollar for the release of the Existing Home Sales.
Thursday the ECB will announce the interest rate, which is not expected to change but ECB President Draghi will hold a press conference shortly after and this is usually a reason for high volatility. Friday the most notable release will be the US Advance version of the GDP, which is the main gauge of overall economic performance.

GBP/USD

Last week the bulls remained mostly in control and took the pair to a high at 1.3942. However, later in the week price rebounded and approached the previous resistance at 1.3860.




Technical Outlook

Although the pair is on an upwards trend, it bounced twice at 1.3942 and the Relative Strength Index is still in overbought territory, which means that we will probably see a move south this week. If 1.3860 is broken, the first potential support is located around 1.3600 but such a long move will need some support from the fundamental side. On the other hand, a break of 1.3942 will take the pair into the key psychological resistance at 1.4000.

Fundamental Outlook

The Pound will only be affected by two major releases this week: the Average Earnings Index scheduled Wednesday and the Preliminary version of the Gross Domestic Product, scheduled Friday. Also Friday, Bank of England Governor Carney will participate in a panel discussion at the World Economic Forum and this could be another reason for increased volatility.

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  #187  
Old 29-01-2018, 13:19
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: BIG WEEK FOR THE US DOLLAR: FED RATE DECISION AND NON-FARM PAYROLLS

EUR/USD


Weekly Analysis: US Dollar weakness continued throughout the entire last week and the pair made substantial advances to the north, reaching the key psychological level at 1.2500.



Technical Outlook

The pair is in a clear uptrend but the last two candles are showing long upper wicks and rejection at 1.2500; also the pair has traveled a long distance to the upside, taking the Relative Strength Index into overbought territory. All this suggests that we will see a move lower this week, possibly into the support at 1.2300 but a lot will depend on the key US data released during the week.

Fundamental Outlook

The week starts with a slow Monday but action picks up Tuesday when we take a first look at German inflation with the Consumer Price Index. Later the same day the US Consumer Confidence survey comes out, showing the opinions of consumers regarding overall economic conditions.
Wednesday President Trump will deliver a speech in Washington DC and although this may go mostly overlooked by the market, caution is still recommended. The FOMC will also release their interest rate Statement the same day. No change is expected for the rate but if the Statement contains hints about the next rate hike, the US Dollar is likely to react strongly.
The final cluster of events is the US jobs data scheduled Friday: the Average Earnings Index, the Non-Farm Payrolls and the Unemployment Rate. All these have a huge impact on the greenback and create volatility almost each time they are released, so caution should be used.

GBP/USD

Similar to the Euro, the Pound posted large gains last week, partly due to US Dollar weakness and partly due to increased hopes for a “smooth” Brexit.



Technical Outlook

Since the bounce at 1.3450, the pair has moved straight up, without a proper pullback, which makes it extremely overextended and in need of a move lower. The Relative Strength Index is deep in overbought territory and the last candles are showing long wicks, which is another sign of rejection, so we will probably see a touch of the zone between 1.4050 – 1.4000. After this possible retracement is complete, bullish movement will probably resume.

Fundamental Outlook

The Pound has a lackluster week ahead, with only a few notable events. Tuesday BOE Governor Carney will testify before the House of Lords Economic Affairs Committee; Thursday the British Manufacturing PMI comes out, followed Friday by the Construction PMI. Carney’s testimony could be a strong market mover but the PMIs usually have just a minor impact on the Pound unless the actual figure differs a lot from expectations. As always, the US releases will have a direct and possibly strong impact on the pair.

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