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  #41  
Old 30-03-2015, 14:47
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: U.S. JOBS SITUATION: A STEP AHEAD FOR THE DOLLAR OR A PUSH BACK?



EUR/USD
Forex Technical Analysis: Last week’s economic data was mixed and so was the pair’s path. Movement was choppy, with a lot of quick reversals on intra-day charts. Price bounced at resistance but the bears weren’t able to take price below support so uncertainty is still present.


Technical Outlook
The pair tried several times to move above 1.1000 but failed to do so and now rejection candles (long upper wicks) are visible on the Daily chart. The Stochastic is moving upwards but it is starting to curve and price came in close vicinity to a confluence zone created by the 50 period Exponential Moving Average and horizontal resistance. On top of these facts, the main trend is down so we expect this week to belong to the bears. First support, although a minor one, is located at 1.0780, followed by the important level at 1.0500.

Fundamental Outlook
The first day of the week marks the release of the German Preliminary Consumer Price Index which is the main gauge of German inflation. Since the German economy is of major importance to the entire Euro Zone, the release is likely to have a strong impact. European CPI follows Tuesday. Inflation has been a worrying issue lately because ECB’s target is just below 2.0% and current levels are considered way to low.

Wednesday the ADP Non-Farm Employment Change comes out, offering us the first look into the U.S. jobs situation. The report is released by a privately owned company and tries to mimic the more important Government report released 2 days later. Friday many banks around the world will be closed in observance of Good Friday so volatility might be affected but the United States will release the Non-Farm Employment Change which is considered the most important jobs-related indicator. A higher number is beneficial for the greenback because it shows a healthy jobs market and suggests that consumer spending is likely to pick up in the near future.


GBP/USD
The pair remained inside a tight horizontal channel for almost the entire week although some attempts to break the range were made. Both British and U.S. data was mixed and this contributed to the choppy movement.


Technical Outlook
During every day of the last week the pair tested the support at 1.4830 but the bears couldn’t break the level. We expect the choppy price action to continue during the first days of this week but the pair is under bearish pressure so we consider that a break of the mentioned level will soon follow. If this is the case, price will head towards the next support, which is located at 1.4650 but a bullish break of 1.5000 would invalidate this scenario.

Fundamental Outlook
Tuesday the British Current Account is released, showing the difference between imported and exported goods during the previous quarter. At the same time the Final Gross Domestic Product is released but this version tends to have the lowest impact out of the three (Preliminary, Second Estimate and Final).

The British Manufacturing PMI comes out Wednesday, followed Thursday by the Construction PMI and Friday U.K. banks are closed due to Good Friday so we expect slow trading until the release of the U.S. Non-Farm Payrolls.
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  #42  
Old 06-04-2015, 12:32
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: SLOW WEEK AHEAD AS EASTER HOLIDAYS TAKE A BITE OUT OF VOLATILITY



EUR/USD
Forex Technical Analysis: Last week started with the bears in control but the pair moved higher after a bounce at 1.0720 and a disappointing U.S. jobs report. Major resistance wasn’t broken but the downtrend is wavering.


Technical Outlook
The bullish price action was stopped by the resistance at 1.1000 but the pair is supported by a bullish trend line which will be the first barrier if the sellers try to take price lower. To the upside the 50 period Exponential Moving Average combined with 1.1000 – 1.1100 zone will offer resistance and a break would open the door for a move close to 1.1450 which is the next level of interest. Before price will decide direction we expect another encounter with the bullish trend line.

Fundamental Outlook
Monday many banks around the world will be closed in celebration of Easter and the fundamental scene is pretty slow. The only noteworthy release is the U.S. Non-Manufacturing PMI which is a leading indicator of economic health derived from the opinions of purchasing managers outside the manufacturing sector.

Wednesday we’ll keep an eye on European Retail Sales numbers and later in the day the FOMC will release the minutes of their latest meeting, containing in-depth details about the reasons which influenced their latest interest rate vote. Thursday’s only highlight is the release of the U.S. Unemployment Claims while Friday will be another slow day in terms of European and U.S. economic news releases.


GBP/USD
The entire last week was very slow for the Pound-Dollar pair except for Friday when a worse than expected U.S. employment report drove price higher. Price sits now above support but resistance is not yet threatened.


Technical Outlook
Lately price moved many times above and below 1.4830 but wasn’t able to move away decisively. The latest move could be what the bulls were waiting for and we might see further upside action. However if the sellers manage to move price quickly below the mentioned level, a new leg of the downtrend might start. The levels to watch this week (apart from 1.4830) are 1.5000 as resistance and 1.4635 as support but keep an eye on the Daily 50 period EMA because it could offer resistance as well.

Fundamental Outlook
Tuesday the United Kingdom will release the Services PMI which will offer insights into the health of the services sector from the viewpoint of purchasing managers. Wednesday the Bank of England will announce the interest rate decision but since no change is expected yet and no press conference takes place, we don’t believe the event will create strong moves. Friday the British Manufacturing Production numbers come out followed by an estimate of the Gross Domestic Product. The strength of the moves generated by these events will depend a lot on the difference between analysts’ forecast and the actual numbers. As always the pair’s movement will be also affected by the U.S. events.
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  #43  
Old 13-04-2015, 13:31
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: DOWNTREND REGAINS MOMENTUM. ECB MEETING IN THE SPOTLIGHT



EUR/USD
Forex Technical Analysis: Last week the bears took control of the pair and managed to take price almost 500 pips lower. Each day finished lower than it started and only brief bullish movement was seen.


Technical Outlook
The bullish trend line was broken decisively last week after a bounce at the 50 period Exponential Moving Average on a Daily chart and now the bears are in control of the pair. The oscillators don’t indicate oversold condition but we expect price to pause or even bounce higher if the important support at 1.0500 is reached. First potential resistance is located at 1.0720 but the bias remains bearish, with the possibility of bullish pullbacks.

Fundamental Outlook
Monday the fundamental scene is slow and no major news is released but Tuesday an important economic indicator will affect the US Dollar: the U.S. Retail Sales. The Fed is closely watching how the economy performs and an increase in sales made at a retail level could mean that we are one a step closer to a rate hike.

Wednesday the ECB will announce the interest rate and President Mario Draghi will hold a press conference which will offer more details about future monetary policy. The press conference is almost always accompanied by strong reaction on euro related pairs so caution is recommended.

Thursday keep an eye on the U.S. Building Permits and Friday the U.S. CPI will be the main market mover because this is one of the most important gauges of inflation.


GBP/USD
Dollar strength was seen against the Pound as well and the pair traveled south for the entire week, breaking the important support located at 1.4830. The Bank of England kept the interest rate unchanged at 0.50% and didn’t offer hints about the next increase.


Technical Outlook
After breaking 1.4830 decisively the pair traveled into the support located in the zone around 1.4635 but although the week finished below this level, the break cannot be considered valid yet. However, as long as price remains below 1.4830, the bias is negative and we expect the downtrend to continue. If this is the case, the next support is located around 1.4350, a level better seen on a Weekly chart.

Fundamental Outlook
British inflation data comes out Tuesday in the form of the Consumer Price Index and Friday we will get insights into the British unemployment situation once the Claimant Count Change is released. Other than that the Pound has a slow week in terms of news releases and center stage will be held by the U.S. announcements.
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  #44  
Old 20-04-2015, 13:04
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: EUROGROUP MEETINGS AND GREEK DEBT HEADLINE THE WEEK AHEAD



EUR/USD
Forex Technical Analysis: Last week the bulls managed to take the pair higher after a move close to key support. The U.S. economic data released throughout the week didn’t match analysts’ expectations and this allowed the euro to edge higher.


Technical Outlook
The support zone around 1.0500 proved strong last week but the climb is not a trend changer. It is normal for price to make several attempts before breaking an important level so we still consider that a move below 1.0500 is possible. There is strong resistance in close vicinity of price, represented by the daily 50 period Exponential Moving Average and by a bearish trend line visible on the chart above. If this resistance zone is surpassed, the next place where bearish movement can resume is located at 1.1000.

Fundamental Outlook
The week ahead is headlined by the Eurogroup Meetings which take place Friday. The meetings carry extra weight this time because a solution must be reached for the Greek debt problem. There have been talks about a potential Greek separation from the European Union if progress in the debt issue is not made but so far an exit remains questionable.

Before the Eurogroup Meetings take place the German ZEW Economic Sentiment Survey is announced Tuesday, showing the opinions of professional investors and analysts about the state of the German economy. Thursday the German and French Manufacturing PMIs are released and Friday we will take a look info U.S. Durable Goods Orders. This indicator focuses on changes in orders for goods with a life expectancy of at least 3 years. Because these goods are usually more expensive, an increase in demand shows that consumers are willing to spend money and this leads to increased economic activity.


GBP/USD
The week that just ended belonged almost entirely to the bulls and the pair traveled about 500 pips to the upside before retracing slightly lower. Resistance was pierced but the week finished below it, mostly due to profit taking on long positions.


Technical Outlook
The last daily candle has a long upper wick and is commonly known as a pin bar. This is a sign of rejection and shows that 1.5000 might be the place where bearish price action resumes. Price is sitting on the 50 period Exponential Moving Average and for now we cannot make any prediction about a break or bounce scenario but a move below this dynamic resistance would increase the chances of an extended drop. The levels to watch this week are 1.4830 as support and 1.5000 as resistance.

Fundamental Outlook
The Pound has a slow economic week ahead, with only two notable releases: Wednesday the Bank of England will reveal the votes on the latest rate decision and although no change in the structure is expected, it’s a good opportunity for traders to gauge the overall stance of the BoE regarding a rate hike. Thursday the British Retail Sales come out; the impact of this indicator is usually high because sales made on a retail level represent a major part of the economy.
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  #45  
Old 27-04-2015, 12:42
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: BULLS TAKE A SWING AT RESISTANCE. EURO WEAKENED BY GREEK UNREST



EUR/USD
Forex Technical Analysis: Last week was characterized by mixed trading scenarios and ranging price action as European and American data failed to meet analysts’ expectations. The Eurogroup Meetings didn’t bring a solution to the Greek crisis and tension grew higher between Greek representatives and European Finance Ministers.


Technical Outlook
We saw an attempt to break 1.0720 to the downside, which resulted in a bullish bounce higher, and now price is attempting to move above the resistance zone created by the bearish trend line and the 50 period Exponential Moving Average. The Stochastic is crossed bullish and the lines are spread apart, indicating buyer momentum and the Relative Strength Index is also moving upwards without being overbought. These are bullish signs which suggest that we are likely to see a break of immediate resistance followed by a move into 1.1000 zone but turmoil in the Euro area might have a negative effect on the common currency and in this case the pair is likely to move below 1.0720.

Fundamental Outlook
The week starts slow, with no major releases occurring Monday. Tuesday an American Consumer Confidence survey is the main headline while Wednesday will be the busiest day of the week for the US Dollar as the Advance Gross Domestic Product is released, followed later in the day by the Federal Funds Rate decision and the FOMC statement. Although the rate is not expected to change, the Statement is likely to reveal hints about the next increase, which is rumored to happen in June or July.

Thursday a Flash Estimate of the European Consumer Price Index comes out, offering insights into the always-important European inflation and the trading week closes Friday with the release of the U.S. Manufacturing Purchasing Managers’ Index which acts as a leading indicator of economic health.


GBP/USD
After a slow start of last week’s trading, the Pound rallied and the pair climbed above 1.5160 resistance. The U.S. economic data released throughout the week disappointed and this contributed to the pair’s rise.


Technical Outlook
Although the week finished above 1.5160 resistance, we cannot consider this a true break yet. The oscillators are approaching overbought and from a long term perspective the pair is still in a downtrend so we believe that bearish price action will take place this week. Keep in mind that bulls managed to break resistance levels last week so currently they have the upper hand.

Fundamental Outlook
The British Preliminary Gross Domestic Product is released Tuesday. The GDP is an economy’s main performance gauge and the Preliminary version is the most important out of the three (Preliminary, Second Estimate and Final) so we expect it to have a strong impact on the Pound. Friday the British Manufacturing PMI comes out, showing the opinions of purchasing managers about the state of the manufacturing sector. As always, the pair’s movement will be directly affected by the U.S. data that comes out throughout the week.
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  #46  
Old 04-05-2015, 08:16
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: U.S. NON FARM PAYROLLS AND U.K PARLIAMENTARY ELECTIONS SET THE STAGE FOR A WILD WEEK



EUR/USD
Forex Technical Analysis: The euro showed clear signs of strength last week, compared to the US Dollar which weakened mostly due to the Fed’s neutral stance regarding an interest rate hike. The entire week was controlled by euro bulls and important resistance was broken.


Technical Outlook
Once the bearish trend line was broken the pair skyrocketed through 1.1000 and 1.1100 resistance, reaching a high of 1.1290 and making the medium term outlook bullish. The next key level is located at 1.1450 but before this is reached we expect price to retrace lower. The last daily candle of the week shows a long upper wick which is a sign of rejection and both the Relative Strength Index and Stochastic are overbought; these are hints that a retracement is due but the main bias is bullish. First resistance is located in the zone created between 1.1100 and 1.1000.

Fundamental Outlook
The dollar has an important week ahead considering that employment data is released. Tuesday the U.S. Trade Balance will show the difference between imported and exported goods and services while Wednesday, Automatic Data Processing Inc. will release their version of the Non Farm Payrolls. Although this report is not as important as the Government jobs data released two days later, its impact can be strong so caution is recommended. The same day Eurozone Retail Sales numbers come out.

The most important event of the week is undoubtedly the U.S. Non Farm Employment Change (Non Farm Payrolls) released Friday. This is a report that shows how many new jobs were created during the previous month, excluding the farming industry and is widely considered the most important employment related indicator for the U.S. economy; its impact is almost always huge, with higher numbers strengthening the greenback.


GBP/USD
The Pound was severely hit by disappointing economic data and a substantial selloff started after an initial climb above resistance. The weekly candle is a huge bearish pin bar which shows rejection and potential downtrend resumption.


Technical Outlook
The resistance at 1.5550 was threatened last week but bears took over and the pair finished below 1.5160. This week we expect price to stall at this level before deciding the next direction; the 50 period Exponential Moving Average is in close vicinity and a touch of this dynamic support is very likely. Both oscillators are moving out of overbought with strong momentum, increasing the chances of further downside movement and making 1.5000 the next target. A bounce higher would open the door for another attempt to break 1.5550.

Fundamental Outlook
Monday UK banks are closed, celebrating May Day this no economic indicators are released. Tuesday the focus is on the Construction Purchasing Managers’ Index and Wednesday the Services PMI comes out. Thursday will probably be the most important day of the week as the British Parliamentary Elections take place. This event is likely to create turmoil on the markets so we recommend caution if trading Pound pairs during the day. The U.S. employment report will also have a direct and strong impact on the pair’s movement.
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  #47  
Old 11-05-2015, 12:46
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: MAJOR RESISTANCE AHEAD. DOLLAR WEAKNESS STILL PRESENT



EUR/USD
Forex Technical Analysis: Last week the pair came close to the resistance at 1.1450 but the bulls ran out of steam before a touch could occur. The U.S. employment data was mixed (previous number revised lower) and this created choppy movement Friday.


Technical Outlook
Although 1.1450 wasn’t threatened last week, we saw an attempt to go below 1.1100 which failed and instead price bounced at this support after a Daily pin bar. The indecision created by the Non-Farm Payrolls is likely to wane off early this week and this means that either 1.1100 or 1.1450 will be broken. The 50 days Exponential Moving Average is moving upwards but both the Stochastic and the Relative Strength Index are starting to move down coming from overbought; these are mixed signals which might generate a ranging week.

Fundamental Outlook
The week starts with the Eurogroup Meetings held Monday and attended by finance ministers from the member states. The Greek debt issue will take center stage again and could generate strong movement if important conclusions are reached. Otherwise we will probably see more of choppy price action.

Wednesday the Preliminary German Gross Domestic Product is released, offering insights into the state of the German economy which as we know is a pillar of the entire Eurozone. The same day the U.S Retail Sales are announced, showing the change in the volume of sales made at retail outlets.

Thursday Swiss, French and German banks will be closed in observance of Ascension Day and this might have a negative impact on volatility, while the US Dollar will be affected by the Producer Price Index and Unemployment Claims release. Friday is a slow day with the US Consumer Sentiment being the only highlight.


GBP/USD
The British Parliamentary Elections were last week’s headline for the Pound-Dollar pair as they created huge Pound strength and generated a surge that threatened 1.5550 resistance.


Technical Outlook
The entire week was bullish and we expect this strength to perpetuate itself during the week ahead. The resistance at 1.5550 is the first barrier in front of rising price and a move above it would solidify the medium term control of the bulls. Currently price is sitting above the 50 period Exponential Moving Average and above 1.5160 support zone so our bias is bullish but a bounce at 1.5550 resistance combined with a turn of the moving average or the oscillators would suggest a bearish retracement.

Fundamental Outlook
Monday the Bank of England will announce their decision regarding the interest rate but no change is expected so the event might go mostly unnoticed. Tuesday the British Manufacturing Production numbers come out, followed by a NIESR Estimate of the Gross Domestic Product; although this is just an estimate, its impact is usually high due to its accuracy.

Wednesday will be probably the most important day of the week for the Pound because the Claimant Count Change will offer important insights into the British jobs market and Bank of England Governor Mark Carney will hold a press conference with the Inflation Report (released at the same time) being the main topic. The rest of the week lacks major economic releases for the Pound but as always the U.S. events will have a direct impact on the pair’s movement.
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  #48  
Old 18-05-2015, 13:11
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: US DOLLAR TAKES A BLOW AS ECONOMIC DATA DISAPPOINTS


EUR/USD
Forex Technical Analysis: The previous week was controlled by the bulls as the euro strengthened on advances made in the Greek bailout conundrum. American Retail Sales and consumer confidence indicators failed to meet analysts’ expectations, dealing a blow to the US Dollar.


Technical Outlook
The pair is supported by a bullish trend line but it’s currently testing 1.1450 resistance, with mixed Stochastic and Relative Strength Index (the oscillators are close to overbought but are not showing an extreme condition). A break of 1.1450 would bring in more buyers and generate another bullish week but a false move above the mentioned level would indicate a potential reversal and resumption of the long term downtrend making the bullish trend line the first target.

Fundamental Outlook
The German ZEW Economic Sentiment – released Tuesday – is the week’s first notable indicator, showing the opinion of about 275 German investors and analysts about the state of the economy. The same day the American Building Permits numbers come out, offering insights into the health of the U.S. construction sector.

Wednesday’s main event is the release of the FOMC Meeting Minutes which show some of the reasons which stood behind the Fed’s latest interest rate decision and often offer hints about future monetary policy. Thursday we will get insights into the French and German manufacturing sector as their respective Purchasing Managers’ Indexes are released while Friday’s headline will be the U.S. Consumer Price Index which in one of the broadest measures of inflation.


GBP/USD
US Dollar weakness was seen against the Pound as well and the pair had another bullish week, with price moving above resistance.


Technical Outlook
Early last week the bulls took price through 1.5550 and continued higher for the rest of the period. However during the second part of the week, the advance slowed and we even saw a bearish day. This fact combined with 1.5830 resistance and the overbought condition of the Stochastic and Relative Strength Index shows that a deeper retracement has high chances of occurring. The first support is located at 1.5550 followed by the bullish trend line.

Fundamental Outlook
Wednesday the Bank of England will make public their votes on the interest rate but no change in the stance of the Monetary Policy Members is expected. Nonetheless the event is considered high-impact and should be watched carefully as it may trigger sharp moves.

The other important event of the week is the release of the British Retail Sales scheduled Thursday. This type of sales represents one of the biggest parts of economic activity and usually affects the Pound strongly. Friday BoE Governor Mark Carney will participate in a discussion at the ECB Forum titled “Inflation and Unemployment in Europe”; his speech is likely to affect the Pound as well so caution is recommended.
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  #49  
Old 25-05-2015, 13:32
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: US DOLLAR ASSAULTS SUPPORT LEVELS. BOUNCE-OR-BREAK SCENARIOS IN PLAY



EUR/USD
Forex Technical Analysis: The bears started last week strong and they maintained control over the pair for the entire period. The resistance at 1.1450 was too strong to break and a bounce generated a drop of more than 400 pips.


Technical Outlook
Important types of support were broken last week: the 50 period Exported Moving Average on a Daily chart, the bullish trend line and the horizontal level at 1.1100. This puts the control on the bears’ side but it’s important to note that currently price reached a support zone created between 1.1100 and 1.1000. If the pair travels below this zone, we are likely to see further downside movement, with 1.0720 being the first target. Both oscillators are well directed, suggesting that such a move is possible but a bounce back above the 50 EMA and 1.1100 may invalidate such scenario.

Fundamental Outlook
Monday most European banks are closed in observance of Whit Monday and US banks are closed due to Memorial Day so we expect a slow or irregular trading session. Tuesday the dollar will be affected by the release of the US Durable Goods Orders and later in the day by a Consumer Confidence survey while Wednesday the main event will be the G7 (Group of 7) Meetings which will probably have a strong impact on both the euro and the dollar. The meetings will continue Thursday and Friday; the rest of the events which will have an effect on the pair are the US Unemployment Claims released Thursday and the German Retail Sales scheduled Friday.


GBP/USD
Although last week was bearish, the Pound benefited from a better than expected value of the British Retail Sales which generated some strength. The climb was erased Friday when the US inflation data came out.


Technical Outlook
The bullish trend line on a Daily chart was broken but the Pound still has enough strength for another bullish push. However, as long as price remains under 1.5550, the picture is bearish and we expect a move south into the 50 days Exponential Moving Average. Both oscillators are coming out of overbought territory and show good momentum, increasing the chances of such a drop.

Fundamental Outlook
Monday British banks are closed celebrating Spring Bank Holiday so the fundamental scene is calm. In fact the entire week is slow, with the only notable release being the Second Estimate of the British Gross Domestic Product scheduled Thursday. The United Kingdom is part of the Group of 7 so the Pound will be affected by the G7 Meetings.
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  #50  
Old 01-06-2015, 15:37
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: WILD WEEK AHEAD AS THE MARKETS BRACE FOR HUGE IMPACT



EUR/USD
Forex Technical Analysis: Last week finished with price at almost the same level it started as the bears controlled the first part and the bulls took over in the second part of the period. The euro was weakened by Greek crisis concerns while the US Dollar was hit by a disappointing GDP.


Technical Outlook
We saw an almost perfect bounce at 1.0820 support which generated a move into 1.1000 resistance. As mentioned before, we consider 1.1000 – 1.1100 a zone of resistance which may push price lower. The daily 50 period Exponential Moving Average is also present into the mentioned zone, giving it more strength, so we are dealing with strong resistance and a break would show that bulls are ready to resume the medium term uptrend. Otherwise, 1.0820 is the first destination, followed by 1.0720.

Fundamental Outlook
The first important release of the week comes Monday in the form of the German Consumer Price Index which is the main gauge of inflation; later in the day, U.S. Manufacturing data is released, offering insights into the health of the American economy. Tuesday European inflation takes center stage as the Euro Zone CPI comes out.

Wednesday the ECB will announce the interest rate and ECB President Mario Draghi will hold a press conference which is usually a huge market mover so caution is recommended if trading at the time. The same day the ADP Non-Farm Employment Change is released, offering an early look at employment in the United States. However, this report which is released by a privately owned company doesn’t have such a huge impact as the government data released 2 days later.

Thursday is a slow day in terms of economic announcements but Friday the U.S. Non-Farm Employment Change (Non-Farm Payrolls) is released. This report shows how many new jobs were created during the previous month and usually has a tremendous impact on the greenback.


GBP/USD
The Pound weakened throughout last week on lower than expected British Gross Domestic Product data and the pair descended steadily into the 50 period Exponential Moving Average.


Technical Outlook
Once the pair moved below the bullish trend line and below the support at 1.5500, more bears joined in and managed to take control. Currently price is testing the 50 period Exponential Moving Average on a Daily chart and this could be a major turning point for medium term price direction: a move below the EMA would open the door for a move into 1.5000 zone of support while a rejection would most likely take the pair back into 1.5500 resistance.

Fundamental Outlook
Three Purchasing Managers’ Indexes are released throughout the first three days of the week: the first one is the Manufacturing PMI, released Monday and followed Tuesday by the Construction PMI. The last survey is the Services PMI, released Wednesday. These are all leading indicators of economic health and higher numbers are usually beneficial for the Pound.

Thursday the Bank of England will announce the interest rate but no change is anticipated so the event will most likely have just a mild impact.
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  #51  
Old 08-06-2015, 13:24
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: CURRENCY WARS: TWO GIANTS COLLIDE



EUR/USD
Forex Technical Analysis: Last week’s price action was bullish on the back of an optimistic attitude shown by ECB President Mario Draghi and constructive talks regarding the Greek debt crisis. The NFP release brought US Dollar strength and took the pair lower for the end of the week.


Technical Outlook
The resistance zone created between 1.1000 and 1.1100 was breached during the week and the pair approached 1.1450 with good momentum but stopped before reaching this level. The greenback strengthened on better than expected jobs data and now price returned to test the 50 period Exponential Moving Average and the level at 1.1100 which may turn into support, generating a bounce higher. If the pair moves below these two types of support, we expect another move towards 1.0820.

Fundamental Outlook
Economic news releases will be scarce during the week ahead but here are the most important events: Monday the Group of Seven (G7) meetings will continue (first day of the meetings is Sunday), with the Greek debt problem being one of the main topics. This can have a strong impact on the euro but the direction will depend on the outcome of the talks. It is important to note that the week may open with a gap influenced by the Sunday talks.

Tuesday and Wednesday are slow days for the euro and dollar so the technical side will take center stage. Thursday the greenback will be heavily affected by the U.S. Retail Sales which represent an important part of overall consumer spending, which in turn makes up for a large part of the entire economic activity. Keep an eye on the CORE version of the indicator (excludes automobile sales from calculation), released at the same time.

Friday the U.S. Producer Price Index comes out, showing changes in the price charged by producers for their goods. This indicator has inflationary implications because a higher price charged by producers will be eventually passed on to the consumer. The same day, the University of Michigan will release their Consumer Sentiment survey which is a leading indicator of consumer spending.


GBP/USD
The pair moved without strong momentum last week as British economic data was mixed, generating choppy price action. The NFP release initially took the pair lower but most of the dollar gains were erased after the first impulse.



Technical Outlook
The pair moved above and below the 50 period Exponential Moving Average for almost the entire week, without clear direction. The last couple of daily candles also show indecision (long upper and lower wicks) and the EMA is flat. All this makes our bias neutral for the pair until a clear move is made in either direction. The Stochastic is coming out of oversold and this is a bullish sign but as we saw on numerous occasions, this indicator can spend a lot of time in oversold or overbought territory.

Fundamental Outlook
Representatives of the United Kingdom will attend the G7 meetings Monday so the Pound may be affected by the talks. Tuesday’s only notable British release is the Trade Balance (value difference between imported and exported goods) while Wednesday is the busiest day of the week for the Pound: the Manufacturing Production numbers are made public, an estimate of the British Gross Domestic Product is released and late in the day, Bank of England Governor Mark Carney will deliver a speech at the Annual Mansion House Dinner. No other major events are scheduled for the rest of the week.
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Old 15-06-2015, 13:13
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: BRACING FOR IMPACT: FED INTEREST RATE AND CLUES ABOUT NEXT HIKE



EUR/USD
Last week the pair bounced above support but major resistance wasn’t threatened and price turned lower, affected by continued Greek debt concerns.


Technical Outlook
The level located at 1.1100 offered good support but the euro couldn’t sustain a climb into 1.1450 key resistance; however the pair is still trading above a bullish trend line and above the 50 period Exponential Moving Average so the outlook is positive at the moment, anticipating another attempt to touch 1.1450. Price direction for the week ahead will be heavily influenced by the Fed’s stance regarding the next rate hike and the U.S. currency is likely to strengthen substantially if clues are offered about a September rate change.

Fundamental Outlook
ECB President Mario Draghi will testify on monetary policy Monday, before the European Parliament. This will most likely be the day’s main event and the euro will probably react strongly, depending on Draghi’s attitude and answers. The German ZEW Economic Sentiment is Tuesday’s euro highlight, while the U.S. Building Permits will affect the US Dollar.

Wednesday is the busiest day of the week for the US Dollar as the Fed will announce the interest rate and the FOMC will issue a Rate Statement, Economic Projections for the next two years and a Press Conference will follow. Fed Chair Janet Yellen will speak during the conference and will answer journalists’ questions, probably triggering sharp moves on US Dollar pairs.

Thursday we will take a look at American inflation as the Consumer Price Index is released and the week ends Friday with the ECOFIN Meetings, attended by finance ministers from the European Union member states.


GBP/USD
The pair had a bullish week, breaking out of the range it was in and touching important resistance on the back of positive British economic data.


Technical Outlook
Price moved above at 1.5500 resistance, with the Stochastic being still bullish and with good support offered by the 50 period Exponential Moving Average. These factors suggest that we are dealing with a true break of 1.5500 and a potential move towards the zone around 1.5800. First confirmed support is represented by the moving average but a lot will depend on the important data released throughout the week for both the US Dollar and the Pound.

Fundamental Outlook
The first major Pound affecting event is the release of the British Consumer Price Index which is the main gauge of inflation. The indicator comes out Tuesday and is followed Wednesday by the Claimant Count Change (change in the number of people who applied for unemployment related benefits) and by the Official Bank Rate votes which will show if there are any changes regarding the interest rate in the stance of the members of the Monetary Policy Committee. The last release of the week comes out Thursday in the form of the British Retail Sales which can strongly move the Pound because sales made at retail levels represent a hefty part of overall economic activity. As always, the U.S. events will directly affect the pair.
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Old 22-06-2015, 13:04
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: CURRENCY MASH UP: NEW DEVELOPMENTS IN GREEK CRISIS, FED INTEREST RATE



EUR/USD
Forex Technical Analysis: United States’ currency declined for a third week against the euro and key resistance was threatened as the Fed lower the expectations for a rate hike; however, the Eurozone is dealing with its own problems and overall the pair’s movement is choppy.


Technical Outlook
The resistance at 1.1450 is an important hurdle which if surpassed will most likely bring in additional buyers. Price is trading above the 50 period Exponential Moving Average and above a bullish trend line but as long as resistance is not broken, reversals are a distinct possibility. On a daily chart price lacks momentum and candles show long wicks which is a sign of weakness and this suggests that a move south is in order if 1.1450 is not broken soon.

Fundamental Outlook
Eurogroup and International Monetary Fund representatives including ECB President and IMF Managing Director Christine Lagarde will meet Monday in another attempt to put an end to the Greek negotiations regarding a potential default on Greek loans. The Forex market will be heavily affected by the outcome of the talks and we expect a very volatile session.

Tuesday Federal Open Market Committee member Jerome Powell will speak about Fed’s decision regarding the rate hike. Hopefully he will shed some light on the timing of such a hike and if this is the case, the US Dollar will react strongly.

Wednesday the currency market will be influenced by the German IFO Business Climate, a survey of about 7,000 businesses across Germany, which asks respondents to rate current economic conditions and to offer their expectations for the next 6-month expectations. The same day the Final version of the American GDP is released; although this version has the lowest impact out of the three, the release can still have a hefty influence on the greenback. The final two days of the week lack major events so probably the direction established in the beginning of the week will prevail.

GBP/USD
The Pound benefited from optimistic economic data last week – an increase in wages and in retail sales – so the pair climbed above 1.5800 zone of resistance. A weak Dollar had almost no answer and the entire week was bullish.


Technical Outlook
Resistance is broken but the Relative Strength Index and the Stochastic both show overbought conditions, making us anticipate a move lower which will find support at 1.5800. A break of this potential support zone would imply that a deeper retracement is coming but we expect bullish price action to continue after bearish pullbacks. The Eurozone fundamental scene will have a deep impact on price action this week.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the week ahead and the only notable indicators are the CBI Industrial Order Expectations (Tuesday), The Mortgage Approvals (Wednesday) and a speech of Governor Carney scheduled Friday. Except for the speech the indicators are considered low-impact but surprising numbers can still move the pair.
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Old 29-06-2015, 12:50
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: DEADLOCKS, DEADLINES AND THE 4TH OF JULY



EUR/USD
Forex Technical Analysis: Last week was characterized by extremely choppy price behavior on all but one of the trading days. The deadlock between Greece and its creditors was still not solved and now Prime Minister Tspiras is making plans for a referendum which will show the Greek people’s opinion on accepting or refusing the creditors’ demands.


Technical Outlook
Price action is still governed by the Greek debt crisis as we saw last week. The pair is just moving back and forth in a tight range but this is probably going to end this week, especially because the 30th of June is the deadline for a part of the Greek debt to be paid. The 50 period Exponential Moving Average, the bullish trend line and the support at 1.1100 form a confluence zone which, if broken, will generate an extended move lower. On the other hand, a bounce here would open the door for a touch of 1.1450.

Fundamental Outlook
The first event of the week is the release of the German Preliminary Consumer Price Index, scheduled Monday and followed Tuesday by the Eurozone Consumer Price Index. These are gauges of inflation and as we know, the ECB considers current levels too low and tries to raise them for some time now. The U.S. Consumer Confidence survey is released Tuesday as well; this is a leading indicator of consumer spending because as long as people are confident about economic conditions, they spend more.

Wednesday’s main event is the release of the U.S. Manufacturing PMI which is a survey of about 400 purchasing managers from the manufacturing sector which acts as a leading indicator of economic health. The release with the highest impact of the week will be the U.S. Non-Farm Employment Change, scheduled Thursday. This is considered by far the most important jobs related data for the American economy and almost always has a huge impact on the US Dollar. Usually it is released in the first Friday of the month but this Friday the United States celebrate Independence Day so the NFP is released one day earlier.


GBP/USD
The Pound had a bearish week, retracing below 1.5800 and negating what seemed to be a clean bullish break of the mentioned level. The last few days were characterized by jerky movement, affected to some extent by the Greek deadlock.


Technical Outlook
If the pair remains below 1.5800 and the level turns into resistance once again, we expect another week of bearish price action. The Stochastic has crossed downwards, coming out of overbought territory and the Relative Strength Index is also coming down after reaching overbought, increasing the chances of bearish movement. However, keep in mind that from a medium term perspective, the pair is in an uptrend.

Fundamental Outlook
United Kingdom’s Current Account (difference in value between imported and exported goods) is released Tuesday, followed Wednesday by the Manufacturing PMI, Thursday by the Construction PMI and Friday by the Services PMI. These are leading indicators of economic health, derived from the opinions of purchasing managers from the respective sectors; the impact on the Pound differs, depending on the difference between forecast and actual numbers. As always the U.S. events will have a direct impact on the movement of the pair.
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Old 06-07-2015, 13:48
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: IN THE SHADOW OF THE BAILOUT VOTE



EUR/USD
Last week was characterized by irregular movement as Greece failed to meet a deadline for an International Monetary Fund loan payout and the Greek Prime Minister called for a bailout referendum that will probably affect this week’s movement.


Technical Outlook
The Greek referendum will influence the week’s price action but currently our view is neutral considering the delicate geopolitical environment. If the zone between 1.1100 and 1.1000 can be broken decisively, we might experience an extended move towards 1.0820, otherwise the resistance at 1.1450 is the next target.

Fundamental Outlook
Monday’s headline is the release of the U.S. Non-Manufacturing PMI which is a leading indicator of economic health based on the opinions of purchasing managers outside the manufacturing sector. Tuesday the U.S. Trade Balance comes out, showing the difference in value between imported and exported goods, but Wednesday will probably be the most important day of the week for the greenback as the Fed will release their Meeting Minutes. The next rate hike remains a crucial issue for the dollar trend and the Minutes can contain clues about a potential increase.

The last two days of the week are slow but Friday Fed Chair Yellen will deliver a speech about economic outlook, possibly generating strong movement.


GBP/USD
Overall we had bearish price action last week and the pair managed to break the upwards trend line, approaching the 50 period Exponential Moving Average.


Technical Outlook
Price is approaching 1.5500 and the 50 period Exponential Moving Average which will act as a support barrier. If this zone can be broken early during the week, the move might extend into 1.5200 but a quick move above the bullish trend line will make 1.5800 the first target. The oscillators are still bearish, increasing the chances of a move south.

Fundamental Outlook
The British Manufacturing Production is released Tuesday and the same day an estimate of the Gross Domestic Product comes out. The accuracy of this estimated value is usually high and so is the impact on the Pound. The BOE will announce Thursday the Official Bank Rate but no change is expected from the current 0.50% so the impact will be limited unless surprises occur.
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Old 13-07-2015, 16:01
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: GREECE’S BUMPY JOURNEY STILL NOT OVER



EUR/USD
Weekly Analysis: At the end of a back and forth week, filled with reversals and choppy price action, Greek Prime Minister Tsipras presented his creditors and European Leaders with a bailout proposal that could end the deadlock and unlock additional funds.


Technical Outlook
The bailout proposal still has to get approval from EU Leaders and creditors (not approved at the time of writing) and the effects will most likely reverberate throughout this week’s price action. An end of this showdown may strengthen the euro and take the pair above 1.1450 but the first barrier is represented by the bullish trend line which can offer resistance if touched from below. To the downside, support is located between 1.1100 – 1.1000, followed by 1.0820.

Fundamental Outlook
Monday’s price action will be probably governed by the results of Greek negotiations and Tuesday’s main event on the euro side will be the release of the German ZEW Economic Sentiment, which is a survey derived from the opinions of about 275 analysts and professional investors regarding the 6-month outlook for German economy. The same day the U.S. Retail Sales are released, with a potentially high impact on the American Dollar considering that sales made at retail levels represent the major part of overall consumer spending.

Wednesday Fed Chair Yellen will testify on monetary policy before the House Financial Services Committee and Thursday she will do the same but before the Senate Banking Committee, in Washington DC. The same day the ECB will announce the interest rate which is not expected to change but Mario Draghi’s press conference that follows will most likely create a lot of volatility.

Friday the U.S. Consumer Price Index comes out, followed later in the day by the University Of Michigan Consumer Sentiment survey. All indicators and events are considered high impact so the greenback is set for a busy week.


GBP/USD
Last week the pair remained below the bullish trend line and moved below support but most of the bearish advances were erased during the last day of the week.


Technical Outlook
The latest climb can be considered a re-test of the recently broken support which could now turn into resistance. The 50 period Exponential Moving Average is also close to current price and will offer some resistance but the oscillators show bullish signs so we might see a breakout above 1.5500. If this is the case, the first resistance is located around 1.5800.

Fundamental Outlook
The week ahead is slow in terms of economic releases, with the only notable events being the British Consumer Price Index scheduled Tuesday and the Claimant Count Change scheduled Wednesday. The first indicator measures inflation while the second tracks changes in the number of unemployed people and both are considered to have a high impact on the Pound. As always, the U.S. events will have a direct and strong impact on the pair throughout the week.
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Old 20-07-2015, 07:14
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Default Re: Weekly Commentary | Gdmfx | Technical

FOREX TECHNICAL ANALYSIS: BEARS, BULLS AND A PINCH OF GREEK BAILOUT DISTRESS



EUR/USD
Without a doubt the biggest event of the last week was the agreement on a third Greek bailout, which came after months of tension and back and forth talks. However, the euro lost its appeal to traders and the pair traveled south the entire week.


Technical Outlook
The downside momentum seen last week is likely to continue throughout this week but the bears must first break the support at 1.0820. Lately the pair’s movement has been very choppy so we might see a bounce or a break but we slightly favor the south side considering that the Euro Zone is shaken by the Greek crisis and both the Stochastic and Relative Strength Index are well directed downwards without being oversold. If 1.0820 is surpassed the next target is 1.0660 while to the upside, 1.1000 is the first resistance.

Fundamental Outlook
The week ahead is very slow in terms of macroeconomic indicator releases, with the first 2 days being almost completely quiet. Wednesday the U.S. Existing Home Sales come out, showing the annualized numbers of houses sold during the previous month (excluding new buildings). Thursday the U.S. Unemployment Claims cone out as usual, tracking changes in the number of jobless people in the United States.

Friday will be the busiest day of the week as the German Manufacturing PMI is released and later in the day the U.S. Manufacturing PMI comes out. These are leading indicators of economic health based on the opinions of purchasing managers from the manufacturing sector and usually a higher number is beneficial for the currency but the impact is limited if the actual number is close to analysts’ expectations. The same day the U.S. New Home Sales are released, offering further insights into the American house market.


GBP/USD
The Pound strengthened last week when Bank of England Governor Mark Carney mentioned that a rate hike may be closer than expected but the impulse couldn’t be continued and the rest of the week lacked substantial movement.


Technical Outlook
The pair is now trading above 1.5500 and above the 50 period Exponential Moving Average so the bulls have more control than the bears, making us anticipate further upside movement, possibly into the resistance at 1.5800. The candles corresponding to the last three trading days show long wicks on both sides, suggesting indecision; probably during the first days of the week we will see a strong move which will decide the direction for the week.

Fundamental Outlook
Similar to the euro and the dollar, the pound has a slow economic week, with the busiest days being Wednesday when the Bank of England will release the breakdown of the votes on the latest interest rate and Thursday when the Retail Sales come out. A major part of the overall economic activity is represented by sales made at retail level, hence more sales suggest a thriving economy and usually strengthen the pound. As always, the U.S. events will have a direct impact on the pair’s direction.
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Old 27-07-2015, 13:41
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: BIG WEEK FOR THE U.S. DOLLAR – ALL EYES ON FED’S MEETING



EUR/USD

Weekly Analysis: Last week the pair bounced at 1.0820 but price action lacked momentum and the bulls didn’t manage to break first resistance.


Technical Outlook

The pair is still standing below the 50 period Exponential Moving Average and below the resistance zone created between 1.1000 and 1.1100. Also, the bearish trend line seen on the chart above can provide good resistance if touched so we are dealing with a strong confluence zone which will be tough to break to the upside. If a break does occur, the next level of interest is 1.1450 and a bounce lower would make 1.0820 the first target, followed by 1.0660.

Fundamental Outlook

The week ahead is busy, with the first important event being the release of the American Durable Goods Orders scheduled Monday. The indicator tracks changes in orders for goods with a life expectancy of more than 3 years; these goods are usually more expensive than regular ones and an increase in such orders suggests economic expansion, hence a stronger dollar.

Tuesday’s main event is the release of the American Consumer Confidence survey. If confidence levels increase, spending levels might increase in the future, strengthening the US Dollar so a higher value can take the pair lower. Wednesday the Fed will announce their rate decision and will issue a statement that will offer insights into the reasons which stood behind the decision. No change is expected but hints about a late 2015 rate hike may generate strong moves.

Thursday the focus remains on the US Dollar as the United States release the Advance Gross Domestic Product which is the main gauge of an economy’s overall performance. The economic week ends Friday with European inflation data in the form of the Consumer Price Index Flash Estimate. A higher value is considered beneficial for the euro and could send the pair north.


GBP/USD

The pair showed mixed price action last week, with the strongest movement being generated by a worse than expected value of the British Retail Sales which triggered Pound weakness.



Technical Outlook

The bears are now struggling to break 1.5500 and the bullish trend line seen on the chart above. First resistance is located at 1.5765 and a break of either zone we mentioned will most likely trigger an extended move in that direction. For the moment we have a lower high on the Daily chart and the Stochastic has crossed downwards, increasing the chances of bearish moves.

Fundamental Outlook

The British Preliminary Gross Domestic Product is the week’s only notable release on the Pound side. It’s scheduled Tuesday and a hefty increase is anticipated so we might see strong movement on the pound-dollar pair. As always, the U.S. events will have a direct impact on the pair’s behavior.
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Old 03-08-2015, 15:01
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: NON-FARM PAYROLLS WEEK – US DOLLAR LOADS UP FOR A BIG JUMP?



EUR/USD

Weekly Analysis: Last week the Fed gave minor hints that we may see a rate hike this year and the U.S. Gross Domestic Product increased significantly but despite all this the pair did not have unidirectional movement and we saw sharp reversals.


Technical Outlook

On a Daily chart the pair is still trading below a bearish trend line, below the 50 period Exponential Moving Average and the last daily candle shows long upper wick which is a sign of rejection. Also, the bulls tried twice last week to break 1.1100 resistance but failed. All these are bearish signs that make us believe that price will head lower this week but considering the way the pair has been moving lately, we cannot exclude another move higher. Key support sits at 1.0820 while resistance is located at 1.1100.

Fundamental Outlook

The euro has a slow week ahead so most of the focus will be on the US Dollar. The first notable event of the week is the release of the U.S. Manufacturing PMI, scheduled Monday; it’s a leading indicator of economic health which can strengthen the greenback if it posts a higher than anticipated value. Tuesday is a calm day for both the euro and the dollar while Wednesday the U.S. Trade Balance is released, showing the difference between imported and exported goods and services. The same day Automatic Data Processing Inc. will release their version of the Non-Farm Employment change, a report which tries to mimic the Government data that comes out 2 days later.

The final and most important event of the week comes Friday in the form of the Non-Farm Payrolls which is the primary gauge of employment in the United States and has a huge impact on the US Dollar. Expect strong movement at the time of the release and dollar strength if the jobs market shows signs of improvement.


GBP/USD

The pair had a very choppy week, with price climbing to resistance and then showing multiple signs of weakness and indecision.


Technical Outlook

We saw a bounce at the bullish trend line, which resulted in a climb into 1.5675 resistance but the last three days have been extremely choppy, with long wicks and small bodies. The 50 period Exponential Moving Average is almost flat but still below price so it can offer support together with the bullish trend line. Our bias is neutral until we will see a clear break of either 1.5675 resistance or the bullish trend line.

Fundamental Outlook

The first British release of the week is the Manufacturing PMI scheduled Monday, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are all leading indicators of economic health, focused towards their respective sectors and usually have a medium impact on the Pound. The most important day of the week will be Thursday when the Bank of England will release their Inflation Report and will announce the Interest Rate decision (no change expected from the current 0.50%). Later in the day BOE Governor Mark Carney will hold a press conference discussing the Inflation Report so we are in for a day with high volatility.

Friday no major UK events are scheduled but the U.S. Non-Farm Payroll will have a direct and strong impact on the pair’s movement.
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Old 10-08-2015, 15:06
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: DOLLAR PICKS UP SPEED AS THE FED MOVES CLOSER TO A RATE HIKE



EUR/USD

Weekly Analysis: Last week European news announcements were scarce and American data was mixed, creating yet another period of indecision and choppy price action.


Technical Outlook

After moving to the downside in the beginning of the week, the pair reversed, without reaching the support at 1.0820. Resistance is located at 1.1000 but the next direction is uncertain, considering the way the pair has been behaving lately; the oscillators don’t show an extreme condition and are just offering mixed signals (Stochastic crossed bearish and RSI is moving upwards). There has been speculation about the Fed raising rates in September so if this week we will get further hints about this, we might see a breakout.

Fundamental Outlook

Monday is a slow day for both the euro and the dollar and Tuesday the German ZEW Economic Sentiment survey is released, showing the opinions of 275 professional investors and analysts about the condition of the German economy. Usually this optimism indicator has a strong impact on the euro and acts as a leading indicator of economic health.

Wednesday we have a calm day again but Thursday the U.S. Advance Retail Sales are released; the indicator could contribute to speculation about a rate hike if higher than expected values are posted so it could be very important for short-to-medium US Dollar strength.

Friday the German Preliminary Gross Domestic Product is released, showing the performance of the German economy which is one of the most important in the European Union. The other event of the day is the release of the University of Michigan Consumer Sentiment survey; a confident consumer usually spends more so higher values are viewed as bullish for the dollar.


GBP/USD

After a slow start of the week, the pair picked up speed and finally broke out of the tight range it was in. The Bank of England did not move as close to a rate hike as some have anticipated and the Pound weakened overall.


Technical Outlook

The support at 1.5500 was finally breached and last week closed with price below it. However, the last daily candle shows a long wick in its lower side, suggesting rejection so the break cannot be considered true yet, especially because lately the pair has been characterized by a lot of reversals and choppy movement. The 50 period Exponential Moving Average can offer the first resistance, followed by 1.5675 while the first support is located at 1.5330.

Fundamental Outlook

The week ahead is very slow for the Pound from a macroeconomic point of view, with the only notable indicators being released Wednesday: the Claimant Count Change and the Average Earnings Index. The first indicator tracks changes in the number of unemployed people who ask for social aid and the second indicator shows changes in the pay received by employees. A lower number of unemployed people is beneficial for the economy and a higher pay for labor is a leading indicator of consumer inflation so it can strengthen the Pound because current inflation levels are considered too low. As always, the U.S. releases will have a direct impact on the pound-dollar pair.
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