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  #81  
Old 11-01-2016, 13:23
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: U.S. DOLLAR ON SHAKY GROUND; MIXED PERFORMANCE AGAINST EURO AND POUND



EUR/USD


Weekly Analysis: The last weekly candle is a bullish pin bar although the jobs situation in the United States improved and this should have strengthened the US Dollar. The pair dipped below 1.0825 but soon returned above this level.


Technical Outlook

Last week’s price action created minor support at 1.0710 but now it appears to be headed for the resistance zone between 1.0980 and 1.1040. We expect this zone to be touched in the early days of the week and then the pair will probably start to move lower, towards 1.0825. The chances of this scenario to happen will increase if the Relative Strength Index will reach overbought or will create bearish divergence. Keep in mind that the NFP report was better than expected so we are likely to see US Dollar strength during the week ahead.

Fundamental Outlook


The week ahead is much slower in terms of economic releases and in fact Monday, Tuesday and Wednesday will be quiet days, without major data coming out. Thursday the Eurogroup Meetings take place, attended by the President of the European Central Bank, finance ministers from the member states and other important personalities; the same day the U.S. Unemployment Claims come out, but usually the impact of this release is mild.

Friday will be the busiest day of the week, with the headlines being the U.S. Retail Sales and later in the day the Preliminary Consumer Sentiment survey released by the University of Michigan. The impact of the latter fluctuates and depends on the difference between forecast and actual value but usually higher values for any of the 2 indicators can strengthen the US Dollar.


GBP/USD

The Pound is weakening severely and rapidly against the US Dollar and last week the pair closed below key support on the back of a better than anticipated number posted by the U.S. Non-Farm Payrolls.


Technical Outlook

The pair is in need of a retracement to the upside and this week we expect it to climb above 1.4565 (this is a key level of support, better seen on a Weekly chart). The Relative Strength Index and the Stochastic on a Daily chart are deep in oversold territory for quite a long time, increasing the chances of a bullish pullback. This potential move up is likely to find resistance in the zone around 1.4700 but the picture is bearish as long as the pair is trading below the 50 period Exponential Moving Average.

Fundamental Outlook

Monday no major indicators are released by the United Kingdom but Tuesday action picks up with the release of the Manufacturing Production which will show changes in the output generated by the British Manufacturing sector. Usually the impact is high, with better numbers showing increased economic activity, thus a stronger Pound. The same day, NIESR will release an Estimate of the British Gross Domestic Product and although this is not a final number, if it’s higher than expected it can be beneficial for the currency.

Thursday the Bank of England will announce their interest rate decision but no change is expected (currently 0.50%). At the same time the Monetary Policy Committee will release a breakdown of the rate votes (showing the stance of each member) and also a summary of their meeting. This cluster of events is likely to create strong volatility, even if the rate will remain the same.
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  #82  
Old 18-01-2016, 14:21
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: POUND APPROACHING NEAR 6-YEARS LOW, EURO CAPPED BY TECHNICAL LEVELS



EUR/USD

Weekly Analysis: Last week was characterized by choppy movement and a lot of back and forth action, without a clear winner. The pair touched support as well as resistance, but didn’t manage to break either one.


Technical Outlook

The pair bounced higher at 1.0800 support and during the last day of last week, touched 1.0980 resistance but price action lacks clear direction and we expect this ranging period to continue until either support or resistance is broken decisively. The Stochastic and Relative Strength Index are both mixed and don’t show a lot about future direction but the last daily candle shows a long upper wick, which is a sign of rejection (although not very strong on its own). This week’s ECB press conference will probably generate a breakout but the direction is hard to anticipate at the moment.

Fundamental Outlook

Monday we are likely to see a slow day as U.S. banks are closed in celebration of Martin Luther King Day and Europe doesn’t release any major indicators. Tuesday’s headline is the release of the German ZEW Economic Sentiment, a survey of about 275 German investors and professional analysts regarding current economic conditions as well as an outlook for the next 6 months.

Wednesday the World Economic Forum Annual Meetings start in Davos and will continue for the whole week, possibly generating market volatility. The same day we take a look into U.S. inflation with the release of the Consumer Price Index, while Thursday the Euro takes center stage as the ECB will announce the interest rate and ECB President Mario Draghi will hold the usual press conference. Friday’s only notable event is the release of the German Manufacturing PMI, a survey of purchasing managers from the manufacturing sector that acts as a leading indicator of economic health.


GBP/USD


The Pound continued to deteriorate against the US Dollar last week, without any sign of a move up. The Bank of England kept the rate unchanged as expected but the overall stance was dovish, further weakening the currency.


Technical Outlook

The pair is approaching the low reached in 2010, located at 1.4229. Although the level was touched a long time ago, when it was hit it generated a strong bounce, so this time we are likely to see a move up as well. The Stochastic and Relative Strength Index are both in deep oversold territory for a relatively long while and this suggests that a push up is next; however, from a technical point of view this correction to the upside is long overdue, but there’s no trace of it. Nonetheless, the importance of the level at 1.4230 makes us believe that this week we will see bullish price action.

Fundamental Outlook

The first important event of the week for the Pound is the release of the British Consumer Price Index scheduled Tuesday and followed Wednesday by the Average Earnings Index (shows changes in the price paid by businesses and government for labor) and the Claimant Count Change (tracks changes in the number of unemployed people). Both are high-impact indicators and can affect the direction of the Pound so caution is recommended. The last event of the week is the release of the British Retail Sales, scheduled Friday.
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  #83  
Old 25-01-2016, 14:27
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: BREAKOUT SCENARIOS IN PLAY FOR EURO-US DOLLAR, POUND UNDER PRESSURE



EUR/USD

Weekly Analysis: Last week we saw an almost perfect bounce lower once resistance was touched but also some mixed movement generated by the speech of ECB President Mario Draghi during the press conference. He warned that monetary policy may be adjusted in March and this triggered a move into key support.


Technical Outlook

The support at 1.0800 is a major medium term hurdle that needs to be broken if the pair is going to continue south. After the huge daily candle (early December 2015) that initially broke this level to the upside, the bulls failed to continue the move and the pair entered a ranging period which can come to an end if 1.0800 is broken to the downside. Price bounced at 1.0710 so this is an important level too, but the pair seems to react to 1.0800 much better so we consider this a more important level and if it’s broken, we expect a move towards the low at 1.0525.

Fundamental Outlook

The week opens Monday with the release of the German IFO Business Climate, which is a highly respected survey due to its large sample size of about 7,000 businesses. Representatives of surveyed businesses are asked to give their opinion about current economic conditions as well as an outlook for the next 6 months. Usually, higher than expected numbers are beneficial for the Euro.

Tuesday’s highlight is the United States Consumer Confidence survey and Wednesday the FOMC will release the Rate Statement which also contains their decision on the interest rate. No change is expected for the rate but the document may contain clues about the pace of future hikes and if this is the case, the US Dollar will respond with increased volatility.

Thursday we have the German Preliminary Consumer Price Index, which is the main gauge of inflation in Germany and the same day the U.S. Durable Goods Orders (goods with a life expectancy of at least 3 years) are released. Higher than expected values for any of the 2 indicators can strengthen the respective currency although the impact is often mild.

The last important event of the week for the US Dollar is the U.S. Advance Gross Domestic Product, scheduled Friday. Out of the three versions of the GDP (Advance, Preliminary and Final), this is the earliest and tends to have the highest impact, with better than expected numbers strengthening the greenback. The same day the Eurozone Flash Estimate CPI is released, offering insights into the state of inflation throughout the Euro region.


GBP/USD

The pair finally retraced higher last week and came in contact with 1.4350 resistance after establishing a new low at 1.4079, a level last touched in 2009.


Technical Outlook

The overall downtrend is still strong and moves up should still be considered opportunities to enter short-side trades. The last daily candle is a pin bar (long upper wick, with small body) that touched 1.4350 resistance and this is a strong indication that price will move lower this week, probably into 1.4050 support. As mentioned before, this is a very old support (last visited in 2009) and we cannot be sure how price will react to it but considering that last week price reversed in its vicinity, we assume it still has significance for price action. This week we expect a move into the mentioned support but a break of 1.4350 would invalidate such a scenario.

Fundamental Outlook


Only two major events will affect the Pound directly this week: Bank of England Governor Mark Carney will testify Tuesday before the Treasury Select Committee, with the topic being the Financial Stability Report. His speech and the way he answers questions can have a substantial impact on the Pound so caution is recommended.

The second major event of the week is the release of the British Preliminary Gross Domestic Product, scheduled Thursday. This version is the earliest and usually has the highest impact, with numbers above expectations being beneficial for the Pound. As always, the US events mentioned before will have a direct impact on the pair’s direction.
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  #84  
Old 01-02-2016, 05:28
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: EURO-DOLLAR STILL IN A RANGE, POUND DOWNTREND WAVERS, OUTCOME DECIDED BY NFP



EUR/USD

Weekly Analysis: The pair climbed slowly towards resistance during the first 4 days of last week but Friday the US Dollar erased almost all losses and now support is once again threatened. The Bank of Japan introduced negative rates and this had a wide effect on the financial market.


Technical Outlook

If the bears manage to break 1.0800 support, we will see an end of the ranging period and probably a move towards the low at 1.0525 (we don’t expect such a move to happen in one week). We slightly favor the short side but we must note the level at 1.0800 rejected price several times so it is still a strong support and the pair is in ranging mode so another bounce higher is not out of the question.

Fundamental Outlook

The first headline of the week ahead is represented by U.S. Manufacturing data that comes out Monday in the form of the Purchasing Managers’ Index. Tuesday is a slow day, without major announcements and Wednesday we take an early look into U.S. employment situation with the release of the ADP Non-Farm Employment Change. This report is less important than the Government data that comes out 2 days later but nonetheless, a higher than expected number is considered beneficial for the US Dollar.

Thursday no major indicators come out and Friday will probably be the most volatile day of the week as the U.S. Non-Farm Employment Change (also known as Non-Farm Payrolls) is announced. This is considered the most important gauge of employment in the United States and acts as a leading indicator of consumer spending. Almost always the impact is strong and higher numbers strengthen the US Dollar.


GBP/USD

The Pound-Dollar had a back and forth week and all moves were reversed the next day. The bulls didn’t manage to close above resistance and the pair is now near multi-year lows again.


Technical Outlook

Price showed rejection several times at 1.4350 resistance and it seems the bears are trying to regain control but this will not be achieved until 1.4125 minor support is broken. A more important target is 1.4050, a level that was last touched in 2009. A bullish break of 1.4350 would make the 50 period Exponential Moving Average the first target and also a place where bearish price action may resume.

Fundamental Outlook

Monday the British Manufacturing PMI is released, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are all leading indicators of economic strength, focused on their respective sectors but lately the impact is strong only if the actual number shows a hefty difference compared to the forecast.

The most important day of the week for the Pound will be Thursday, when the Bank of England will release the Inflation Report as well as their decision regarding the interest rate and a Monetary Policy Summary that will outline the reasons that determined the rate decision. Later in the day, BOE Governor Mark Carney will hold a press conference, discussing the Inflation Report. As always, the pair’s direction will be directly influenced by the US events mentioned earlier.
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  #85  
Old 15-02-2016, 04:56
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: BUYERS MEET RESISTANCE, UPWARDS MOMENTUM STARTS TO FADE



EUR/USD

Weekly Analysis: Last week was bullish, with price advancing into 1.1375 but ending on a bearish note, bouncing below 1.1300. Fed Chair Yellen’s 2-part testimony brought some volatility but overall it didn’t have a huge influence on the markets.


Technical Outlook

The bearish bounce at 1.1375 followed by the move close to 1.1200 zone shows that the bullish momentum is starting to wane and that we will probably see a move into lower territory. The Relative Strength Index and the Stochastic are overbought and starting to move down, improving the chances of a bearish week. The first barrier is the support around 1.1210, a zone that already rejected price higher last Friday; a break of this level would probably add more sellers to the mix and will take the pair lower, towards 1.1100. To the upside, first resistance is located at 1.1375, followed by the key level at 1.1450.

Fundamental Outlook

Monday U.S. banks are closed in celebration of Presidents’ Day so the New York session is likely to show decreased volatility. On the Euro side, ECB President Mario Draghi will testify before the Economic and Monetary Affairs Committee of the European Parliament and this is likely to strongly affect the single currency so caution is advised.

Tuesday’s headline is the German ZEW Economic Sentiment, which is a survey of about 275 investors and analysts regarding their 6-month outlook for the German economy. Wednesday the US Dollar will be strongly influenced by the release of the FOMC Meeting Minutes and Thursday the Philly Fed Manufacturing Index is the only notable event. The trading week ends Friday with a look at Unites States inflation as the Consumer Price Index comes out; this is an important gauge of inflation, which showed disappointing numbers for a relatively long while so an increase is likely to bring US Dollar strength.


GBP/USD

Last week was characterized by choppy movement and no serious advances were made to either side. All five daily candles show long wicks, suggesting indecision.


Technical Outlook

The pair touched three times last week the resistance at 1.4565 and the 50 days Exponential Moving Average but each time it bounced lower. This shows that we are dealing with a strong resistance zone which is likely to drive price lower if it is not broken early in the week; however, the pair is in indecision mode and will remain so until either 1.4565 or 1.4350 is broken. The next direction depends on the direction of this breakout but for extra confirmation, a re-test should follow the initial move.

Fundamental Outlook

The first major release of the week is scheduled Tuesday: the British Consumer Price Index. Numbers above expectations can strengthen the Pound because currently inflation in the UK is considered too low.

Wednesday the British Claimant Count is released, showing the changes in the number of people who applied for unemployment related benefits and the last important event of the week for the Pound is scheduled Friday in the form of the Retail Sales. For most countries, sales made at retail levels represent a major part of overall economic activity, thus a higher number suggests a thriving economic environment and usually a stronger currency.
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  #86  
Old 22-02-2016, 13:37
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: TECHNICAL SUPPORT PUSHES THE US DOLLAR BACK; BEARS EXPECTED TO STRIKE AGAIN



EUR/USD

Weekly Analysis: Last week most of the pair’s earlier gains were erased and support was threatened. It seems that once again the bull-bear battle is undecided and without a clear winner.


Technical Outlook

If the current move south finds good support around 1.1100, we might see a bounce higher and a possible continuation of the previous bullish impulse. The 50 period Exponential Moving Average is in close vicinity and can be another reason for a move up but a break below this technical indicator is likely to bring more sellers into the market; however, we are dealing with a strong support zone (1.1040 – 1.0980) that will be tough to break. As long as price stays above the 50 EMA we favor the long side for a continuation of the earlier move up.

Fundamental Outlook

The week ahead begins with the release of the German Manufacturing PMI scheduled Monday and continues Tuesday with the German IFO Business Climate and U.S. Consumer Confidence. All these are surveys that act as leading indicators of economic health and can strengthen their respective currency but often the impact is mild if the actual number matches analysts’ expectations.

Wednesday’s most notable event is the release of the U.S. New Home Sales and Thursday the Durable Goods Orders come out, as well as the European Final version of the CPI. These are medium impact indicators and the market’s reaction depends many times on the overall environment. Friday will be probably the busiest day of the week as the G20 Meetings start and the German Prelim CPI (main gauge of inflation) is released. Also Friday, the United States will announce the Preliminary version of the Gross Domestic Product; this is the first version and tends to have the biggest impact so we may see a hefty US Dollar reaction.


GBP/USD

The pair remained below the 50 days Exponential Moving Average for the entire last week, showing signs that the long term downtrend might be resuming. Friday the bulls erased some of the losses but overall it was a bearish week.


Technical Outlook

Last week ended above 1.4350 after a bullish bounce at 1.4230 so this impulse is likely to take the pair into the 50 days Exponential Moving Average. If this line is touched, we expect it to act as resistance and to push price lower. A move above the moving average would show that a significant higher low is created (around 1.4230) and would possibly mark an end to the long term downtrend. A push below 1.4230 would open the door for a move into 1.4125 and thus trend resumption.

Fundamental Outlook

The Pound has a very slow week ahead, with the only major economic indicator being the Second Estimate Gross Domestic Product, scheduled Thursday. The GDP is the primary gauge of an economy’s overall performance but the Preliminary version, which has been already released, tends to have the biggest impact. As always, the pair will be directly influenced by the U.S. releases mentioned earlier.
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  #87  
Old 29-02-2016, 15:29
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: US DOLLAR STRONG ACROSS THE BOARD. NFP WEEK TO ‘MAKE-OR-BREAK’ THE NEW TREND



EUR/USD

Weekly Analysis: The greenback made serious advances against its counterparts last week, backed by strong U.S. economic data. Important levels were broken and downside momentum is now starting to pick up.


Technical Outlook

The break of 1.1040 and 1.0980 seen last week shows that the bears are tilting the balance in their favor and that 1.0800 might be the next target. This is a key support level as seen from previous price action (note the grey rectangles to the left – falling price was rejected higher several times) and if broken, it can affect the long term movement of the pair. The Stochastic has reached oversold but the Relative Strength Index doesn’t show an extreme reading so the picture offered by the oscillators is mixed; a move up is likely to find some resistance at the recently broken levels as well as at the 50 period Exponential Moving Average.

Fundamental Outlook

The week starts with the release of the Flash Estimate version of the Eurozone Consumer Price Index scheduled Monday; this is the main gauge of inflation but the German CPI has been already released last week so Monday’s indicator might lack a strong impact.

Tuesday the US Dollar will be affected by the release of the Manufacturing PMI, an indicator derived from the opinions of purchasing managers regarding business conditions in the manufacturing sector. Action picks up Wednesday with a first look at American jobs situation as Automatic Data Processing will release their version of the Non-Farm Employment Change. Although important, the impact of this indicator is lower than the one of the Government jobs data that comes out 2 days later.

Thursday the Euro will be affected by the Eurozone Retail Sales and Friday is a huge day for the US Dollar as the Non-Farm Employment Change (also known as Non-Farm Payrolls) comes out, showing the change in the number of new jobs created during the previous month. This is by far the most important jobs data released by the United States and usually creates increased volatility and possibly sharp turns.


GBP/USD

Last week the long term support at 1.4050 was broken and thus the downtrend has been resumed. The bears made substantial advances and we are likely to see more downside action.


Technical Outlook

Volatility increased and the pair traveled a long distance south, breaking 1.4050 and then re-testing it from below. This level can now be considered resistance and the next potential support is located at 1.3655. However, price last visited the mentioned level in 2009 so we cannot accurately predict how it will react on another touch. The fact that a long distance was covered in a relatively short while makes us believe that some sort of bullish retracement will follow, or at least a period of choppy, sideways movement but the primary trend is clearly bearish.

Fundamental Outlook

This week the Pound’s movement will be influenced by three important indexes: Tuesday the Manufacturing Purchasing Managers’ Index (PMI) comes out, followed Wednesday by the Construction PMI and Thursday by the Services PMI. These indexes are derived from the opinions of purchasing managers from the respective sectors and act as leading indicators of economic health. Usually, higher than anticipated numbers strengthen the Pound and the opposite is true for lower numbers. As always, the pair will be directly influenced by the U.S. data that comes out during the week.
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  #88  
Old 07-03-2016, 10:45
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: MAJOR EVENTS AHEAD: ECB EXPECTED TO FURTHER EASE MONETARY POLICY, BOE GOVERNOR CARNEY TO TESTIFY ON BREXIT



EUR/USD

Weekly Analysis: Although last week begun on a bearish note, the pair soon started to move to the upside, after a bounce near 1.0800 key support. The U.S. jobs market showed improvement and the effects are likely to be seen this week.


Technical Outlook

On a daily chart the pair moved above the 50 period Exponential Moving Average and touched the resistance at 1.1040. The moving average is not completely broken but the Stochastic and Relative Strength Index are starting to gain upside momentum, moving out of oversold territory. This suggests that we will probably see more bullish movement, possibly above 1.1100 and into 1.1200 zone. A lot will depend on ECB’s decision regarding rates so we are likely to see choppy, ranging movement until Thursday.

Fundamental Outlook

The week ahead is very slow in terms of economic releases and in fact, apart for the ECB Interest Rate announcement scheduled Thursday, there’s not much action. Monday the Eurogroup Meetings take place, followed Tuesday by the ECOFIN Meetings but usually these meetings are closed to the press so volatility will increase only if some participants talk to journalists during the day. Once the meetings have concluded, formal statements will be released.

Wednesday is a slow day for both the Euro and the US Dollar and Thursday will probably be the most important day of the week as the European Central Bank will announce the Interest Rate and ECB President Mario Draghi will hold a press conference which is known to create a lot of movement on Euro-pairs, especially during the questions-and-answers session. The interest rate is not expected to change but the deposit rate might go further into negative territory. How this will affect the Euro remains to be seen but it could generate huge movement so extra caution is recommended.

The only notable indicator released Friday is the German Final version of the Consumer Price Index but this is the third and last version in the series and usually doesn’t create strong movement.


GBP/USD

The pair had a completely bullish week, creating a low at 1.3835 and bouncing strongly from there. The British economic data released throughout the week was rather disappointing, suggesting that the climb was generated by technical reasons.


Technical Outlook

The current bullish move shows good momentum and is likely to extend into the resistance zone created by the 50 period Exponential Moving Average and the level at 1.4350. When two or more technical indicators are in close vicinity of one another (in this case the moving average and 1.4350), a confluence zone is formed and usually these zones are tough to break; considering this, we expect price to bounce lower once the said zone is reached. A potential break of the confluence zone will open the door for a move into the zone near 1.4565. Currently the main trend is still bearish.

Fundamental Outlook

Similar to the Euro and the US Dollar, the Pound has a lackluster week ahead, but an important event takes place Tuesday: Bank of England Governor Mark Carney will testify before the Parliamentary Committee with the topic being United Kingdom’s European Union membership. This speech is expected to create strong and maybe irregular moves on Pound related pairs. Caution is recommended!

The British Manufacturing Production is scheduled for release Wednesday. The indicator tracks changes in the overall volume produced by the Manufacturing sector, with better numbers showing increased economic activity and possibly a stronger Pound. Other than this, Friday the British Trade Balance comes out, showing the difference between imported and exported goods. The indicator usually creates only mild movement but if the actual value differs substantially from analysts’ forecast, volatility is likely to increase.
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  #89  
Old 14-03-2016, 14:21
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: ECB DECISION CREATES A PRICE STORM, FED RATE MEETING IS NEXT



EUR/USD

Weekly Analysis: Last week was “governed” by European Central Bank’s surprising decision to cut the interest rate to 0.00% and the deposit rate to -0.40%. A price storm soon followed, with wild swings and sharp reversals, creating an ambiguous environment.


Technical Outlook

Usually a rate cut weakens the currency and initially the Euro did what it was “supposed” to do but soon after it decided to strengthen and move into 1.1210 resistance. This massive swing is likely to influence this week’s price action and now the downside seems difficult although one can argue that a weak Euro was the ECB’s goal when they decided to cut. If the resistance at 1.1210 is broken early in the week we can expect a move into 1.1375 and even 1.1450 but a down move shouldn’t be overlooked as it still remains a viable option. If this is the case, the 50 period Exponential Moving Average can offer a reliable first target.

Fundamental Outlook

The week starts slow Monday, without any important announcements but Tuesday action picks up with an important U.S. indicator: the Retail Sales. The indicator measures changes in the total volume of sales made through retail outlets and usually has a strong impact on the US Dollar, with higher values strengthening it.

Wednesday will probably be the most important day of the week for the greenback as the U.S. Consumer Price Index (a key measure of inflation) comes out and later in the day the Fed will announce their latest rate decision. No change is expected but a press conference will be held by Fed Chair Janet Yellen and a formal statement will be released. All this is likely to generate strong and possibly irregular movement.

Thursday the focus shifts on the Euro for the release of the European Final Consumer Price Index. This version of the CPI is the least important because German inflation data is already released and so is the European CPI Flash Estimate. Friday’s only notable indicator is the U.S. Consumer Sentiment survey released by the University of Michigan. It tries to gauge the opinions of consumers about current economic environment and is often indicative of near future retail sales levels because a confident consumer often spends more.


GBP/USD

The Pound wasn’t affected by major economic indicators last week but the ECB decision extended its effects on the pair, generating a bullish week and a move above resistance.


Technical Outlook

The pair remained above 1.4125 after bouncing twice off of it and even moved above the 50 period Exponential Moving Average and 1.4350. This makes the short term bias bullish and opens the door for a touch of 1.4565 zone but we have to note that the pair is still in a downtrend (price is making lower lows and lower highs) and the Stochastic has reached overbought so we cannot rule out a move south. If such a move occurs, the 50 period EMA is the first potential support and a place where the pair could bounce higher.

Fundamental Outlook

Two major economic releases will affect the Pound this week: the first is the Claimant Count Change released Wednesday, which shows the change in the total number of people who asked for unemployment related benefits. The second event is the Bank of England rate announcement, scheduled Thursday and accompanied by a statement which will outline the reasons behind the rate decision. Other than that, the Pound has a slow week but the pair will be directly affected by the U.S. events mentioned above.
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  #90  
Old 21-03-2016, 13:36
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: KEY RESISTANCE AHEAD. US DOLLAR POISED FOR A COMEBACK?



EUR/USD

Weekly Analysis: Last week the bullish movement continued, on the back of US Dollar weakness which was mostly generated by the dovish stance of the Fed and their decision to maintain rates unchanged. Previous to their latest meeting the Fed had planned 4 rate hikes during 2016 and now they lowered the expectation to just 2.


Technical Outlook

Price is bouncing at 1.1320 resistance but it’s very possible to see a move into 1.1375. If the pair reaches this mark, a double top is likely to form; this is a bearish pattern which combined with the overbought position of the Stochastic and Relative Strength Index will generate downward pressure and a potential move into 1.1210 or even lower. Although the latest impulse is bullish, overall price is ranging and this favors a bounce into lower territory but a bullish breakout would invalidate such scenario.

Fundamental Outlook

Monday is a slow day but action picks up Tuesday with the release of the German IFO Business Climate, a survey derived from the opinions of about 7,000 businesses regarding economic and business conditions for the next 6 months. The same day the German ZEW Economic Sentiment survey comes out; this is another survey but is based on the opinions of about 275 German investors and analysts. Higher numbers than expected for both surveys usually strengthen the Euro.

Wednesday is another lackluster day, followed Thursday by the U.S. Durable Goods orders, an indicator that measures changes in orders placed for goods with a life duration of at least 3 years. Friday most European banks will be closed in observance of Good Friday and the United States release the Final version of the Gross Domestic Product. Although this is the least important version, better numbers can still have a positive impact on the US Dollar.


GBP/USD

The pair bounced strongly at support last week and continued higher although the Band of England maintained the rate unchanged. Most of the bullish movement was generated by the Fed meeting and greenback weakness.


Technical Outlook

The current climb is likely to continue into the zone surrounding 1.4565 but once it gets there we expect a bounce lower. This potential move lower is likely to find support at the 50 period Exponential Moving Average or at 1.4350 but keep in mind the downtrend is severely weakened now so we may see the start of an uptrend or a period of ranging movement. The Stochastic is overbought, favoring a move south but the Relative Strength Index doesn’t show an extreme condition so the picture painted by the oscillators is blurry.

Fundamental Outlook

The week ahead is slow, with the main event being the British Consumer Price Index scheduled for release Tuesday. This is the main gauge of inflation and usually a higher number is beneficial for the Pound, especially since the current value is considered too low. Thursday the Pound will be affected by the British Retail Sales release and Friday UK banks are closed, celebrating Good Friday. As always, the U.S. events released throughout the week will directly affect the pair’s behavior.
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  #91  
Old 28-03-2016, 14:17
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: EASTER HOLIDAY, AMERICAN NON-FARM PAYROLLS TO TRIGGER ERRATIC MOVEMENT



EUR/USD

Weekly Analysis: For the entire last week price moved lower at a slow but steady pace. The economic data was mixed and price action was affected by the approaching of the Easter Holiday.


Technical Outlook

The slow bearish grind is likely to continue until 1.1100 is touched but here we expect brief retracements to the upside. The 50 period Exponential Moving Average is in close vicinity of the mentioned support level, thus creating a confluence zone that will be hard to break by the bears, so the chances of a move up will increase here. Overall the pair is in a ranging period, without a clear trend and the Daily Stochastic is moving down, coming out of overbought; this increases the chances of an extended bearish move but neither side is in clear control and price will be affected by the Easter Holiday.

Fundamental Outlook

Monday European banks will be closed in celebration of Easter Holiday and overall liquidity will be thin and price action irregular. Tuesday the focus is on the US Dollar for the release of the Consumer Confidence survey and the same day, Fed Chairwoman Janet Yellen will deliver a speech titled Economic Outlook and Monetary Policy.

Wednesday the German Preliminary Consumer Price Index is the main indicator on the Euro side, while the US Dollar will be affected by a first look into the American employment situation with the release of the ADP Non-Farm Employment Change.

Thursday European inflation takes center stage again as the Flash Estimate version of the CPI is released but the most important event of the week takes place Friday: the release of the U.S. Non-Farm Payrolls. This is widely considered the main gauge of employment in the U.S. and shows how many new jobs were created during the previous month. Usually the US Dollar moves strongly when this indicator comes out, so use caution at the time.


GBP/USD

Last week the bears took back control and erased all losses incurred a week before, taking price into the support at 1.4050 and generating a strongly bearish week.


Technical Outlook

Although the long term downtrend is severely weakened, the buyers cannot make significant advances and the pair is not making higher highs, a fact which suggests that we will see moves lower in the near future. The first barrier is represented but the support at 1.4050, followed by the important low at 1.3835, while to the upside the 50 period Exponential Moving Average represents the first potential resistance. The oscillators are rather mixed, slightly biased towards the short side.

Fundamental Outlook

The Pound has a slow week ahead and only a couple of events have the potential to become market movers: Thursday Bank of England Governor Mark Carney will hold a press conference in Tokyo at the Financial Stability Board Plenary meeting. As always when heads of central banks speak publicly, caution is advised because the respective currency may show irregular movement and possibly sharp turns.

Friday the British Manufacturing Purchasing Managers’ Index is released, showing the state of the manufacturing sector according to the opinions of purchasing managers from said sector. Better numbers usually strengthen the Pound but the impact is sometimes muted. Throughout the week, the pair will be directly affected by the U.S. indicators, mainly the NFP.
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  #92  
Old 04-04-2016, 14:05
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: BULLS’ STRENGTH FADES, BEARISH PRESSURE BUILDS UP



EUR/USD

Weekly Analysis: The entire last week was bullish and the pair came very close to the resistance at 1.1450, which represents a key level for medium term price action. All this happened despite a higher than expected number of new jobs created in the U.S.


Technical Outlook

The bullish momentum is starting to fade and long wicks start to appear in the upper part of candles. Friday we saw some bearish action triggered by the NFP release but overall, movement was mixed and the gains made by the US Dollar were erased. However, we are likely to see the effects of the encouraging NFP extend throughout this week and we expect the pair to move south, towards the 50 period Exponential Moving Average.

Fundamental Outlook

The week ahead is not filled with a lot of economic releases but here are some of the highlights: Tuesday the U.S. Non-Manufacturing PMI will offer insights into the opinions of about 400 purchasing managers about the state of the economy, excluding the manufacturing industry. Wednesday the latest FOMC Meeting Minutes are released, showing details about the reasons that determined the decision to maintain rates unchanged in March; usually this release creates strong volatility if the document contains some hints about the future pace of rate changes.

Thursday ECB President Mario Draghi is scheduled to deliver a speech about the European financial and economic situation at the Portuguese President's Council, while Fed Chairwoman Janet Yellen will participate in a discussion at the International House, in New York. Both these public appearances can become market movers but can also go mostly overlooked by market participants. Either way, caution should be used. Friday lacks major releases.


GBP/USD

Last week the Pound had a strong start but almost all gains were erased by the US Dollar strength created Friday when the Non-Farm Employment Change report came out.


Technical Outlook

Price action is confined within a triangle pattern and the breakout is likely to determine the next medium term direction. The resistance at 1.4350 was briefly breached last week but as we saw, the greenback is starting to gain back some strength and now the pair is headed towards 1.4050 once again. Also, a higher high has not been printed so our view is bearish-to-neutral until price breaks out of the mentioned triangle.

Fundamental Outlook

The week opens Monday with the release of the British Construction PMI, followed Tuesday by the Services PMI. Both are surveys of purchasing managers which offer insights into the state of the respective sector and can have a positive impact on the Pound if better numbers are posted. The other important event of the week ahead is scheduled Friday in the form of the Manufacturing Production, an indicator that shows changes in the total value of output produced by the manufacturing sector. Same as with the other 2 indicators, a higher number is beneficial for the Pound and as always, the U.S. events will have a direct impact on the pair’s movement.
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  #93  
Old 11-04-2016, 14:03
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: FED HOLDS UNEXPECTED MEETING. BREAKOUTS AHEAD!



EUR/USD

Weekly Analysis: The entire last week price action was incredibly choppy and no advances were made by either side. Overall the pair moved sideways and all directional moves were quickly reversed.


Technical Outlook

The pair was trapped between 1.1450 resistance and 1.1335 support for more than a week and this increases the probability of a breakout in the near future, probably this week. The latest impulse is bullish but from a longer term perspective the pair is ranging, without a clear trend. The oscillators are overbought and 1.1450 is proving to be a strong barrier so we slightly favor a bearish breakout but for that to happen, the first hurdle is the bullish trend line seen in on the chart above. If this line and 1.1335 are broken, we expect a bearish week, with price moving closer to the 50 period Exponential Moving Average.

Fundamental Outlook

Monday the Fed will hold an unexpected Meeting under “Expedited Procedures”, with the main topic being Interest Rates. High volatility is very possible but the actual impact is not known, thus caution is recommended. Wednesday the U.S. Retail Sales are released, showing changes in the total value of purchases made by consumers at retail outlets. This kind of sales represents a major part of the entire consumer spending and usually a better than expected value is beneficial for the US Dollar.

Thursday we remain on the US Dollar side for the release of the U.S. Consumer Price Index, which is one of the main gauges of inflation and usually has a strong impact on the greenback, with higher numbers strengthening it. Eurozone’s Final CPI is also released Thursday but this is the least important version of the indicator and usually doesn’t have a tremendous impact; nonetheless, higher numbers can strengthen the Euro.

Friday’s main event is the release of the University of Michigan Consumer Sentiment, a survey that offers insights into the opinions of consumers regarding current and future economic conditions; higher numbers show that consumer spending is likely to increase in the future and usually generate greenback strength.


GBP/USD

The British economic data released throughout last week was rather mixed but the Pound weakened against the US Dollar, bouncing lower at the 50 days Exponential Moving Average and breaking out of a triangle chart pattern.


Technical Outlook

Although the bears managed to take price outside the triangle chart pattern, the important support at 1.4050 is hindering further advances to the downside. If this level is broken soon, we expect the pair to head into the previous low located at 1.3835 but if another bounce occurs at this area, probably the 50 period Exponential Moving Average is the next destination. The oscillators don’t offer a lot of hints about future direction and overall the balance of power is fragile.

Fundamental Outlook

Tuesday the United Kingdom will release the Consumer Price Index, which shows changes in inflation and also has a strong impact on the Pound under usual circumstances; since the current value is considered too low, an increase would be beneficial for the Pound.

The second and last notable event of the week is the Bank of England interest rate decision scheduled Thursday. No change is anticipated for a relatively long period but the announcement can create volatile movement on Pound related pairs. At the same time BoE will release a summary of the Monetary Policy meeting, showing the reasons that determined the rate decision and also a breakdown of the members’ votes on the rate. This cluster of events is likely to generate irregular movement, thus we recommend caution.
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  #94  
Old 18-04-2016, 14:32
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: US DOLLAR TURNS UP THE HEAT. FULL SCALE REVERSAL IN THE MAKING?



EUR/USD

Weekly Analysis: Last week the bears made a strong statement by managing to break the bullish trend line seen on the chart below, after another bounce off of the key resistance at 1.1450, so the pair might be preparing for a deeper move south.


Technical Outlook

This week we expect a continuation of the move started last week but the 50 days Exponential Moving Average represents a strong barrier and also a point where the bulls could step in to try and take back control. Near this zone we have 1.1210 support, a fact which adds more strength to the zone but the Stochastic and Relative Strength Index are moving down after being overbought and this favors a continued move down. As you can see, the balance is not heavily shifted towards one side or the other but we slightly favor a move south towards 1.1100. To the upside the levels to watch remain 1.1335 and the key resistance at 1.1450.

Fundamental Outlook

The first important release of the week is the German ZEW Economic Sentiment, a survey of about 275 investors and analysts regarding the state of the German economy. The survey comes out Tuesday and the same day the U.S. Building Permits are released, offering a look into the health of the American construction sector.

Wednesday is a slow day but action picks up Thursday when the European Central Bank announces the interest rate and ECB President Mario Draghi holds a press conference that is known to be a market mover and a reason for increased volatility. Friday the ECOFIN and Eurogroup meetings start, attended by key personalities from the Euro area and the same day the European Flash Manufacturing PMI and Flash Services PMIs are released; these are leading indicators of economic health focused on the respective sectors and usually have a hefty impact on the currency, with higher numbers strengthening it.


GBP/USD

The pair broke out of the triangle pattern it was in but the bears failed to capitalize and the ranging period is still not over. We expect a real breakout this week but so far the pair is hesitating to pick a side.


Technical Outlook

Price lacks momentum and neither bulls nor bears are in control but the 50 days Exponential Moving Average as well as the previously broken trend line are in close vicinity and here we may get some clues about future movement. Price has already bounced lower once 1.4350 was touched but another bounce lower in the current area will show that price is indeed headed lower; of course, if this happens, 1.4050 will become the main level to break.

Fundamental Outlook

Bank of England Governor Mark Carney will testify Tuesday before the Lords Economic Affairs Committee, in London. The event should be treated with caution because the Pound is likely to show irregular movement at the time.

Wednesday the Claimant Count Change comes out, showing changes in the number of people who applied for unemployment related benefits during the previous month. A higher number shows that more people are unemployed and has a negative influence on the Pound, weakening it. The last important event of the week is the release of the British Retail Sales scheduled Thursday. Higher numbers for this indicator usually bring Pound strength but the impact is sometimes mild.
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  #95  
Old 25-04-2016, 15:07
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: THE US DOLLAR BUCKLES UP FOR STRONG MOVES. IT’S FED RATE WEEK!



EUR/USD

Weekly Analysis: Last week ended on a bearish note, even if the beginning belonged to the bulls, who managed to take price briefly above 1.1335. The ECB kept rates unchanged and during the press conference, ECB President Draghi did not make any statements that can affect long term movement.


Technical Outlook

The pair remained below the broken bullish trend line and the move above 1.1335 was reversed; now we see increased bearish pressure as the 50 period Exponential Moving Average is threatened. This technical indicator combined with the horizontal support at 1.1210 creates a confluence zone that will be difficult to break by the bears, but on the other hand, a break would show that the balance of power is clearly favoring the short side. If this occurs, we expect to see a touch of 1.1100 next. For now, 1.1335 is the first resistance, followed by 1.1400.

Fundamental Outlook

The first event of the upcoming week is the release of the German IFO Business Climate, a survey of about 7,000 businesses that asks respondents to give their opinion regarding the state of the economy and business conditions. The release is scheduled Monday and is followed Tuesday by the U.S. Durable Goods Orders, an indicator that shows changes in the total value of orders for goods with a life expectancy of at least 3 years. The same day an American Consumer Confidence survey comes out and acts as a leading indicator of consumer spending.

Wednesday it’s the most important day of the week as the Fed will announce their decision on the interest rate; also a FOMC Statement will be released, outlining the reasons that determined the rate decision. Although no rate change is expected, this release has a strong impact most of the times so caution is recommended.

Thursday’s highlights are the release of the German Preliminary CPI, which is the main gauge of inflation and on the US Dollar side we have the Advance Gross Domestic Product; this is the first version of the GDP and tends to be the most important so we might see significant moves for the greenback. Friday’s highpoint is the release of the Eurozone CPI Flash Estimate which is a key gauge of inflation across the European Union.


GBP/USD

The Pound had a strong week against the US Dollar and took the pair above the 50 period Exponential Moving Average in a fast move; however, bullish movement slowed down for the end of the week.


Technical Outlook

The pair finished last week above 1.4350 and above the 50 period Exponential Moving Average and this makes the short term bias bullish. That being said, we expect a touch of 1.4500 resistance but keep in mind that overall the pair lacks a clear trend and direction changes often, so once (or if) 1.4500 is touched, we expect to see a move south. Probably by that time the two oscillators will both become overbought and this will add to the chances of a drop. If this is the case, the moving average will become the first lower target.

Fundamental Outlook

The week ahead is scarce in economic releases that can affect the Pound, with the most noteworthy being the Preliminary version of the British Gross Domestic Product scheduled for release Wednesday and the Net Lending to Individuals scheduled Friday. The former indicator is considered the most important gauge on an economy’s overall performance, while the latter shows changes in the value of loans issued to consumers. Higher numbers for these indicators usually bring Pound strength and the opposite is true for lower numbers. As always, throughout the week the pair’s movement will be directly influenced by the U.S. events mentioned earlier.
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  #96  
Old 02-05-2016, 07:10
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: KEY RESISTANCE THREATENED, NFP WEEK AND A RECOVERING US DOLLAR



EUR/USD

Weekly Analysis: Last week the Fed decided to keep rates unchanged and the US Dollar weakened, allowing the pair to complete a perfect bounce at support. Resistance is still holding but momentum belongs to the bulls.


Technical Outlook

The bounce at 1.1210 support and the fact that price is still above the 50 days Exponential Moving Average shows that there is still underlying strength on the bullish side. However, 1.1450 has acted as strong resistance in the past and the pair ended last week right on this level so we may see a bearish bounce here. The oscillators offer mixed signals, with the Relative Strength Index approaching overbought and the Stochastic just exiting oversold, so probably the next direction will be decided by the way price behaves at the key level of 1.1450.

Fundamental Outlook

The week opens Monday with a speech of the ECB President Mario Draghi, titled “The future of financial markets: A changing view of Asia”. We don’t know how the markets will receive this event and what the impact will be but caution should be used nonetheless.

Tuesday is a slow day and Wednesday we get an early look into U.S. employment situation with the release of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the farming sector and government.

Thursday German and French banks are closed in observance of Ascension Day so we don’t have any major releases, while Friday will probably be the most active day of the week as the U.S. Non-Farm Employment (Non-Farm Payrolls) report comes out, showing the change in the number of employed people during the last month, excluding the farming sector. This is widely considered the most important U.S. jobs data and the impact on the US Dollar is usually huge, with higher numbers strengthening it.


GBP/USD

The US Dollar weakened against all of its major counterparts last week and the Pound was no exception. Key resistance is currently being tested.


Technical Outlook

The level at 1.4650 is a major hurdle in front of rising prices and has acted as strong resistance in the past. A break would be a great victory for the bulls but the Stochastic and Relative Strength Index are both entering overbought on a daily chart. This means that future bullish advances will be more difficult to achieve and the chances of a bearish bounce will increase. A lot will depend on the U.S. jobs data and until that is released, we expect ranging movement.

Fundamental Outlook

Monday UK banks are closed in observance of May Day and no major announcements are made; the first indicator of the week is the Manufacturing PMI, scheduled Tuesday and followed Wednesday by the Construction PMI. Thursday the Services PMI comes out and this is the last important economic indicator of the week, for the Pound. All three indicators are surveys of purchasing managers from their respective sectors and act as leading indicators of economic health. Higher numbers usually benefit the Pound but often the impact is mild. Of course, the U.S. jobs data will be a market mover for the pair.
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  #97  
Old 09-05-2016, 14:14
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: UPTREND STILL INTACT, US DOLLAR FIGHTS FOR CONTROL



EUR/USD

Weekly Analysis: Last week started on a strong bullish note, with price spiking above 1.1450 resistance before making a sharp turn near 1.1615. The U.S. jobs report disappointed but despite this fact, the bulls didn’t manage to take back control.


Technical Outlook

Even if the latest move is down, we must note that the pair is making higher highs and is trading above the 50 days Exponential Moving Average so we are still in a bullish market. This suggests that once support is reached, we may see a bullish bounce and the first place where this can happen is the 1.1335 level; by the time price reaches it, probably the moving average will climb and will be in close vicinity, thus creating a confluence zone that will increase the probability of a move north. On the other hand, a break of this zone would suggest that price is headed towards the zone around 1.1200, suggesting that the uptrend is coming to an end.

Fundamental Outlook

The week ahead lacks major fundamental events, especially in its first part. It is worth mentioning that Monday the Eurogroup Meetings take place, attended by key figures from the political and financial scene, but Tuesday and Wednesday are slow days, with nothing important on the calendar. Thursday the U.S. Unemployment Claims will reveal the number of persons who applied for unemployment related aid, but this indicator is released each week and that’s why its impact tends to be mild; however, a higher number can weaken the US Dollar to some extent.

Friday is the busiest day of the week, with the release of the German Preliminary Gross Domestic Product and also the U.S. Retail Sales. Both are key indicators of economic health and can strongly affect the respective currency, with higher numbers being beneficial. The same day the University of Michigan will release a Consumer Sentiment survey, which is indicative of future consumer spending levels.


GBP/USD

British economic data released throughout last week failed to meet expectations and this played an important role in the bearish action and the move below 1.4500.


Technical Outlook

The strong bounce at 1.4765 combined with the overbought position of both the Stochastic and Relative Strength Index makes us anticipate further downside movement. The first potential barrier in front of falling prices is the 50 days Exponential Moving Average but if this line is broken, we expect to see a touch of the bullish trend line seen on the chart above. To the upside, 1.4500 is the first potential resistance, followed by 1.4650 but our bias is bearish for the week ahead.

Fundamental Outlook

Wednesday the British Manufacturing Production comes out, showing changes in the total value of output generated by the manufacturing sector but the most important day of the week will be Thursday when the Bank of England will release their Inflation Report, the interest rate decision and a Rate Statement. The inflation report shows BoE’s projection regarding economic growth and inflation for the next 2 years and later in the day Governor Mark Carney will hold a press conference, discussing the contents of the report. As for the rate, this is not expected to change but volatility is usually generated by the event.
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  #98  
Old 16-05-2016, 12:28
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: THE US DOLLAR STRIKES BACK, BEARS THREATEN THE UPTREND



EUR/USD

Weekly Analysis: The first days of last week were slow and choppy but action picked up later in the week when the bears managed to break support on the back of better than expected U.S. economic data. The uptrend is still intact but is severely weakened.


Technical Outlook

The pair broke 1.1335 support and is now struggling to move below the 50 days Exponential Moving Average. Last time price encountered this form of support, it bounced higher, so the same scenario may apply now, but a bearish break will put control in the hands of the sellers. If this happens, we will probably see a touch of 1.1210, followed by a small retracement to the upside; on the other hand, a bounce higher and a fast move above 1.1335 would make 1.1450 the target for the week.

Fundamental Outlook

The week starts slow, with Swiss, French and German banks being closed in observance of Whit Monday; no important indicators are released by the United States either. Tuesday action picks up with the release of the always important U.S. Consumer Price Index, which is the main gauge of inflation. Wednesday the FOMC will release the Minutes of their latest Meeting, offering insights into the reasons that generated the rate votes. More importantly, this document may contain hints about the pace of future rate changes and if this is the case, the US Dollar is likely to have a strong response.

Thursday the Philly Fed Manufacturing Index coms out, showing the state of the manufacturing sector according to the opinions of surveyed manufacturers and Friday is another slow day, with the U.S. Existing Home Sales numbers being the only notable event.


GBP/USD

The first 4 days of the week that just ended were incredibly choppy and all moves in one direction were quickly reversed. It seems the pair is now finally picking a direction but support is still in the way.


Technical Outlook

The pair finished the week below the 50 days Exponential Moving Average but the support at 1.4350 is still intact; the Stochastic is entering oversold but the Relative Strength Index still has a long way to go and all this paints a blurry picture, with reasons for price to go up as well as down. We slightly favor the sell side because momentum is finally starting to pick up after a few days of sideways movement, so we anticipate a break of 1.4350 and a touch of the bullish trend line seen on the chart above.

Fundamental Outlook

The first British event of the week is scheduled Tuesday: the Consumer Price Index which measures changes in the price that consumers pay for their purchases. It is the main gauge of inflation and usually creates a strong impact, with higher numbers being beneficial for the Pound. Wednesday we take a look into the unemployment situation with the release of the Claimant Count Change, an indicator that shows changes in the number of people who applied for unemployment related help. Higher numbers are usually detrimental for the Pound, showing a possible decrease in economic activity and consumer spending.

The last major event of the week is the release of the British Retail Sales, scheduled Thursday. This kind of sales represents a big chunk of the entire consumer spending which in turn accounts for a major part of the entire economic activity, thus higher numbers usually strengthen the Pound.
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  #99  
Old 23-05-2016, 13:15
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: US DOLLAR ADVANCES ON THE BACK OF FED RATE HIKE OPTIMISM



EUR/USD

Weekly Analysis: The most important day of last week was Wednesday when the FOMC Minutes came out, showing optimism about a potential rate hike in June. This strengthened the US Dollar, driving the pair below support and generating an overall bearish week.


Technical Outlook

The 50 period Exponential Moving Average was broken decisively last week and this could be the beginning of an extended period of bearish movement. Currently price is trying to break the barrier at 1.1210 and if it manages to do so, we expect it to drop towards 1.1060; however, the oversold condition of the Stochastic plays against this scenario and may trigger a bullish retracement (the RSI is also close to oversold). Our bias for the week is bearish as long as the pair remains below the 50 days EMA but we expect some bullish retracements.

Fundamental Outlook

The first event on the calendar is the release Monday of the Eurozone Manufacturing PMI, a survey of about 3,000 purchasing managers that asks respondents to give their opinion on the business conditions in the manufacturing sector. Tuesday we have the German ZEW Economic Sentiment (a survey of about 275 German analysts and professional investors regarding their 6 month outlook for Germany) and the same day the Eurogroup Meetings start.

Wednesday is another day for surveys, with the highlight being the German IFO Business Climate. It has a large sample of about 7,000 businesses and this makes it a high impact indicator but usually the effect is limited if the actual number matches analysts’ expectations. Thursday we turn to the U.S for the release of the Durable Goods Orders (goods with a life expectancy of at least 3 years) and Friday we remain on the US Dollar side for the release of the Preliminary version of the Gross Domestic Product, which is considered the main gauge of overall economic performance.


GBP/USD

The Pound got a boost from a poll that showed that a Brexit is less probable and that the majority of surveyed people would rather remain in the EU. Most of the gains were erased Friday when the greenback strengthened.


Technical Outlook

The pair bounced almost perfectly at 1.4650 and now the bears are struggling to break the support at 1.4500. If they manage to do so, we expect a move into 1.4350; a break of the bullish trend line seen on the chart above would suggest that the pair will enter a period of bearish movement. The 50 period Exponential Moving Average is close to the mentioned support zones, adding strength to them and making a break more important.

Fundamental Outlook

The Pound has a slow week ahead, with only two notable releases: Tuesday the Public Sector Net Borrowing numbers come out and Thursday the Second Estimate Gross Domestic Product is released. The former indicator shows the difference between spending and income for public corporations and government during the previous month while the GDP is the main gauge of economic performance, thus it has a strong impact on the currency.
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  #100  
Old 30-05-2016, 13:59
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: ECB INTEREST RATE ANNOUNCEMENT, U.S. JOBS DATA – THE INGREDIENTS FOR WILD SWINGS



EUR/USD

Weekly Analysis: The greenback won the battle against the Euro last week, breaking support and the bullish trend line seen on the chart below. The economic calendar didn’t reveal major events but optimism about a June rate hike kicked in, helping the US Dollar.


Technical Outlook

After breaking 1.1210, the pair returned to re-test it from below, bouncing lower and thus confirming the level as resistance. The bullish trend line is also broken and the pair is below the 50 days Exponential Moving Average, so all things point towards an extended move south but as we can note, the Stochastic is oversold and the Relative Strength Index is close to its 30 level. This fact increases the chances of a bullish bounce but we expect 1.1060 to be tested this week and there we will probably see a move higher.

Fundamental Outlook

The economic week opens Monday with the release of the German Consumer Price Index, an always important gauge of inflation that can positively affect the Euro if it shows higher numbers; on the US Dollar side, banks will be closed in observance of Memorial Day so we don’t have any major releases. Tuesday the Eurozone CPI Flash Estimate comes out, followed later in the day by the U.S. Consumer Confidence, a survey of about 5,000 households that tries to gauge the overall opinion about job availability, business conditions and economic environment.

Wednesday is a slow day for the Euro, while the greenback will be affected by the release of the U.S. Manufacturing PMI. This is another survey that asks purchasing managers from the manufacturing sector to give their assessment about the overall performance of said sector. Thursday will be the busiest day for the Euro as the ECB announces the interest rate and ECB President Mario Draghi holds his usual press conference. Although the rate is not expected to change, volatility is likely to surge during the press conference, so as always, caution is recommended.

Friday is the greenback’s turn to steal the spotlight with the release of the Non-Farm Employment Change (Non-Farm Payrolls). This indicator shows how many new jobs were created during the previous month and is considered the most important jobs related indicator for the United States. Almost always this release is accompanied by strong movement and increased volatility.


GBP/USD

Last week was overall bullish but the Pound gave back some of the early gains later in the week. The move up seems exhausted now as the pair failed to clearly threaten key resistance.


Technical Outlook

The bullish break of 1.4650 resistance (seen earlier in the week) did not take price into 1.4765 as expected and instead the pair returned below the broken level. This shows that the bulls are starting to fade away and that we will probably see a move into 1.4500 this week; the 50 days Exponential Moving Average is close to 1.4500, thus creating a confluence zone that will be difficult to break but if the bears manage to do that, the pair is likely to start a new short term downtrend.

Fundamental Outlook

Monday UK banks will be closed, celebrating Spring Bank Holiday so the economic calendar is empty. The rest of the week is filled with surveys: Wednesday the Manufacturing PMI comes out, followed Thursday by the Construction PMI and Friday by the Services PMI. These are all leading indicators of economic health, derived from the opinions of purchasing managers from the respective sectors and usually, higher numbers trigger Pound strength. As always, the pair will be directly influenced by the U.S. events scheduled throughout the week.
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