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[GDMFX]

FOREX NEWS: THE US DOLLAR CAPITALIZES ON A HAWKISH FED ATTITUDE

EUR/USD
The pair continued to slide lower during the day, before the FOMC Minutes which further strengthened the US Dollar as the Fed showed optimism regarding the job market and inflation.

Technical Outlook
We saw a new low of the year reached by the pair and for the time being the bears are dominating the market. The key support at 1.3295 was clearly broken and if price returns to it for a retest and successfully bounces lower, we might see a touch of 1.3200 in the near future. Keep in mind that the Relative Strength Index is deep in oversold territory, a fact which favors a touch from below of 1.3295.

Fundamental Outlook
The French Manufacturing PMI is released early at 7:00 am GMT and expected to climb slightly from 47.8 to 47.9. It will be followed half an hour later by the German indicator with the same name, which is expected to drop from the previous 52.4 to 51.7. Both are leading indicators of economic health for two of the most important countries in the Euro Zone and higher numbers are usually beneficial for the Euro.

The Philly Fed Manufacturing survey will be announced at 2:00 pm GMT and a hefty drop is anticipated, from the previous 23.9 to 19.7. The survey is based on the opinions of purchasing managers from the manufacturing sector and usually, its importance is increased if the actual numbers differ a lot from the anticipated ones.


GBP/USD
Bank of England’s Minutes released yesterday showed that 2 out of 9 members voted for a rate increase, a fact which boosted the Pound higher but the hawkish attitude of the FOMC Meeting Minutes allowed the pair to move lower.

Technical Outlook
The zone around 1.6660 is now confirmed resistance since yesterday we saw clear rejection off that level and the Dollar run might extend into the support located at 1.6550. A lot depends on the Retail Sales numbers and the technical aspect will be somewhat secondary.

Fundamental Outlook
United Kingdom’s Retail Sales numbers come out today at 8:30 am GMT with a positive change expected, from the previous 0.1% to 0.4%. Such an increase will further strengthen the Pound as sales made at a retail level represent the major part of economic activity.

[GDMFX]

FOREX NEWS: THE SECOND DAY OF THE JACKSON HOLE SYMPOSIUM BRINGS US TWO IMPORTANT SPEECHES

EUR/USD
Forex News: Yesterday’s trading session was mostly controlled by the bulls although Philadelphia Manufacturing data was better than anticipated, a fact which would normally benefit the US Dollar. However, major levels were not threatened.

Technical Outlook
The current bullish move is likely to continue until 1.3295 is touched. The next potential turning point is 1.3330 but this move is considered just a retracement to the downtrend which was overextended and in need of a breather. The low at 1.3240 will act as potential support if the downtrend resumes and the next key level is located at 1.3200.

Fundamental Outlook
Today is the second day of the Jackson Hole Symposium and probably the most important one because both Fed Chairwoman Janet Yellen and ECB President Mario Draghi will deliver speeches at the Federal Reserve Bank of Kansas City. Yellen’s speech is scheduled at 2:00 pm GMT while Draghi’s will follow at 6:30 pm GMT; the main topic for both speeches will be the labor market, which is always a delicate subject that can strongly influence the market so caution is recommended.


GBP/USD
The pair ranged for almost the entire day, with a slightly bullish bias despite the fact that Retail Sales dropped during the previous month.

Technical Outlook
There is still room for the pair to move to the upside as no major resistance is near current price, but on the other hand, 1.6550 support is very close and it will most likely act as a magnet for price. A lot depends on Janet Yellen’s speech, which will probably influence heavily the US Dollar.

Technical Outlook
The United Kingdom didn’t schedule any major news releases for the day and market participants will focus on the two important speeches mentioned above.

[GDMFX]

FOREX NEWS: THE POUND EXPERIENCES IRREGULAR VOLATILITY AS UK BANKS ARE CLOSED

EUR/USD
Forex News: During her speech at the Jackson Hole Symposium, Fed Chairwoman Janet Yellen mentioned improvements in the US labor market and suggested that the economy is healing while ECB President Mario Draghi signaled that the European economy is still not back on track.

Technical Outlook
The comments of the two bankers generated a sharp drop for the pair, after an almost perfect bounce off of 1.3295 level which was previous support, now turned resistance. The first lower target and support is located at 1.3200 but at the moment the pair is diverging from the Relative Strength Index as we can notice a lower low printed by price and a higher low made by the indicator. This is known as regular divergence and in this case is indicative of a potential bullish retracement. However, two important economic indicators come out today and price movement will be affected by their readings.

Fundamental Outlook
The first release of the day is the German IFO Business Climate, a confidence survey derived from the opinions of about 7,000 businesses. This large sample makes the survey a well respected one and increases its importance. The release is scheduled at 8:00 am GMT and the anticipated number is 107.1, a small decrease from the previous 108.

At 2:00 pm GMT the US New Home Sales numbers come out, with an anticipated change to 426K from the previous 406K. Better than expected numbers usually strengthen the US Dollar as they indicate that consumers are confident in economic conditions and they can afford a house.


GBP/USD
The pair was also affected by Yellen’s comments but not as much as the EUR/USD and overall we had a slow Friday, with mostly ranging price action.

Technical Outlook
We expect the pair to touch the level at 1.6550 today but we don’t anticipate a lot of movement as banks in the United Kingdom will be closed, celebrating Summer Bank Holiday. The first level of interest to the upside is 1.6600 but we might experience irregular volatility and low liquidity, making price action hard to predict.

Fundamental Outlook
As mentioned above, banks in the United Kingdom will be closed and no economic indicators will be released today but the pair will be affected by the US New Home Sales release.

[GDMFX]

FOREX NEWS: DOWNTREND’S “FATE” RESTS ON AMERICAN CONFIDENCE INDICATORS

EUR/USD
Forex News: The indicators released yesterday for both the European and American economies posted worse than expected values but not much action was seen and the pair ranged almost the entire day.

Technical Outlook
The week opened with a gap to the downside and more often than not, these gaps tend to be filled (price climbs to the point where the gap originated) so we might see a move into 1.3220. The regular divergence is still present as price is showing a lower low while the Relative Price Index is making higher lows and we have an oversold condition of the pair. These factors, combined with the strength of 1.3200 support will probably generate a bullish day.

Fundamental Outlook
The Dollar will be affected today by the release of the Durable Goods Orders, scheduled at 12:30 pm GMT and expected to increase substantially from last month’s 1.7% to 7.4%. An increased number of such orders shows that producers will have to speed up their activity to fill those orders and also that consumers are confident enough to buy long lasting goods.

At 2:00 pm GMT the US Consumer Confidence is released, showing the state of the public opinion regarding current and future economic conditions. Increased or high confidence is a leading indicator of consumer spending because usually people tend to spend more when they are confident about their economic situation. The anticipated value is 89.1 while the previous was 90.9.


GBP/USD
Despite the fact that banks in the United Kingdom were closed yesterday, the Pound managed to retrace higher after a failed break of 1.6550 support.

Technical Outlook
The week opened with a downside gap which was quickly filled after a bounce off of 1.6550 support zone but 1.6600 resistance stopped the upwards momentum. A stronger bullish move is still anticipated but if today the pair cannot break decisively the level at 1.6600, the downtrend might resume. The first lower barrier is of course 1.6550.

Fundamental Outlook
The British Bankers’ Association will announce today at 8:30 am GMT the Mortgage Approvals numbers. Lately the house market has been closely watched by the Bank of England and Mortgage Approvals are in close relation with house purchases because usually a mortgage is often used for such a purchase. More mortgages suggest that people are willing to buy houses and that loans can be obtained, facts which are beneficial for the British economy and hence for the Pound. Today’s expected number is 44.2K, a small increase from the previous 43.3.

[GDMFX]

FOREX NEWS: MARKET IN CONSOLIDATION PHASE. BREAKOUTS EXPECTED

EUR/USD
Forex News: The Durable Goods Orders showed a much better than anticipated value yesterday but the Core version of the same indicator, which excludes transportation items, posted a surprising drop and all this generated mostly sideways price action.

Technical Outlook
The bullish divergence is still present and the level at 1.3200 seems strong as the pair couldn’t break it decisively. On top of that, the weekly gap is still not closed so bullish moves are still expected but yesterday’s price action doesn’t offer a lot of hints about future direction so for the time being we are neutral on the pair, expecting a break of the consolidation pattern created around 1.3200.

Fundamental Outlook
The day ahead is very slow in terms of economic releases and the only notable indicator is the GFK German Consumer Climate scheduled at 6:00 am GMT. Its value is expected to drop slightly from the precious 9.0 to 8.9 and better than expected figures are usually beneficial for the Euro but the indicator tends to have a mild impact on the market.


GBP/USD
The British Bankers’ Association Mortgage Approvals were fewer than anticipated but the figure didn’t differ much from analysts’ expectations and it didn’t create a huge impact as a result.

Technical Outlook
The bulls failed to take price above 1.6600 minor resistance but on the other hand, the bears didn’t succeed to break 1.6550 and this shows that indecision is currently governing the pair. These two levels will be important for today’s price action and a break of either one will probably generate an extended move in that direction. A conservative approach would be to expect the retest after the initial break occurs.

Fundamental Outlook
The United Kingdom didn’t schedule any economic indicator releases for the day, thus price direction will be mainly influenced by the technical aspect.

[GDMFX]

FOREX NEWS: GERMAN INFLATION AND AMERICAN GDP – CATALYSTS FOR A BREAKOUT

EUR/USD
Forex News: The Euro managed to recover yesterday from an almost one-year low on the back of comments made by German finance minister who said that Mario Draghi’s latest speech was “over-interpreted”. This spurred interest for the single currency and took the pair into 1.3200 resistance.\

Technical Outlook
Yesterday we saw a bearish break of 1.3200 support zone but developments during the day took price back into the mentioned zone for a retest. After a breakout, a retest of the recently broken level is common and usually, this retest shows if the break is sustainable or if it was just a fake. The bullish divergence is still present and the weekly gap is still not closed, so if price moves above 1.3200, we might see it climb at least until the gap is closed.

Fundamental Outlook
The German Consumer Price Index is released today at 12:00 pm GMT and analysts expect it to remain unchanged at 0.8%. German inflation contributes to overall Euro Zone inflation and lately it has been one of ECB’s major concerns; the Euro would benefit from higher values of the German CPI.

The United States will announce their Preliminary Gross Domestic Product today at 12:30 pm GMT and a minor decrease from 4.0% to 3.9% is expected. Since the GDP is an economy’s main performance gauge, better than expected values have the potential to strengthen the currency.


GBP/USD
The pair failed to break out of the tight range and instead bounced between support and resistance for the entire day as no major news affected either of the two currencies.

Technical Outlook
For today, a breakout is a high probability scenario but the direction will probably be determined by the US Gross Domestic Product. Yesterday we saw that price touched 1.6550 support and immediately moved up to test 1.6600 but failed to break this level as well. This shows indecision and the fact that price needs some sort of catalyst which will generate a break of either one of the levels mentioned.

Fundamental Outlook
The United Kingdom didn’t schedule any important news for today thus market participants will focus on the American events which are likely to trigger strong moves.

[GDMFX]

FOREX NEWS: EUROPEAN INFLATION DATA LIKELY TO PUT AN END TO THE CONSOLIDATION PHASE

EUR/USD
Forex News: German inflation stalled, just as analysts expected but the American Gross Domestic Product showed a surprising increase, spurring demand for the greenback and taking the pair below 1.3200 support.

Technical Outlook
The move above 1.3200 couldn’t be sustained by the bulls and price soon dropped below the level but the weekly gap is still not closed so we might see further upside movement. For the time being price is confined between 1.3150 and 1.3220, without clear direction, thus market participants will probably focus on the fundamental aspect which will most likely dictate the next direction.

Fundamental Outlook
Today the main gauge of European inflation is released: the Euro Zone Consumer Price Index. For quite a long time inflation has been lower than ECB’s target of just below 2.0% and if it continues to drop we are likely to see more stimulus added by the ECB, a thing considered bearish for the Euro. Today’s anticipated change is 0.3% while last month’s value was 0.4% and the time of the release is 9:00 am GMT.


GBP/USD
Surprisingly, the positive change of the American Gross Domestic Product didn’t do much for the pair and the US Dollar couldn’t gain substantially against the Pound.

Technical Outlook
A breakout is still anticipated but for the time being price movement is still caped by 1.6600 resistance and 1.6550 support. The Relative Strength Index is moving close to the 50 level and doesn’t show an extreme condition of the market, thus it doesn’t offer a lot of hints about the next move and we maintain our view that a clear breakout, followed by a retest of the broken level, will generate an extended move in that direction.

Fundamental Outlook
The Nationwide Building Society will announce today the change in the selling price of UK homes purchased with mortgages provided by this Society. The indicator acts as a measure of house market inflation and it’s a leading gauge of health for the housing industry. The release is scheduled at 6:00 am GMT, with an anticipated change of 0.0% while the previous was 0.1%; higher values usually strengthen the Pound, driving the pair higher.

[GDMFX]

FOREX NEWS: IRREGULAR VOLATILITY DUE TO AMERICAN BANK HOLIDAY. POUND AFFECTED BY MANUFACTURING DATA

EUR/USD
Forex News: Friday’s main event was the release of the Euro Zone CPI which slowed down from 0.4% to 0.3%, just how analysts anticipated. The drop weakened the Euro and the pair finished the week with the bears in control.

Technical Outlook
Now that price surpassed 1.3150, we anticipate a move closer to 1.3100 after a potential retest of the recently broken level. However, the pair has been on an extended move to the south and the Relative Strength Index is oversold on a Daily chart, signaling that bullish pullbacks are a probable scenario. If this is the case, the first major barrier is 1.3200 which has now turned into resistance.

Fundamental Outlook
American banks will be closed today due to Labor Day and no economic indicators are scheduled for release today. As a result, the New York session might suffer from low liquidity and irregular movement. There are no major European releases either, so we may experience slow and ranging price action during the day.


GBP/USD
The Pound had another slow day Friday and no special developments took place. Price remained confined in a tight range and the anticipated breakout didn’t occur.



Technical Outlook
The resistance at 1.6600 and the support at 1.6550 managed to contain price for longer than anticipated and this was mostly due to the lack of major economic releases last week. Today the probability of a breakout is greatly increased but the direction depends mostly on the manufacturing data released by the United Kingdom.

Fundamental Outlook
At 8:30 am GMT the British Manufacturing PMI is released. The indicator is a measure of optimism among purchasing managers from the manufacturing sector and also acts as a leading indicator of economic health. The expected value is 55.1 and a higher number is usually beneficial for the Pound.

[GDMFX]

FOREX NEWS: PRICE ACTION AFFECTED BY PURCHASING MANAGERS’ INDEXES

EUR/USD
Forex News: The Euro climbed yesterday, moving towards 1.3150 but price action lacked momentum as no major economic news came out and the market suffered from low volatility due to the fact that US banks were closed.

Technical Outlook
The bears slowed down their momentum but the downtrend is intact and a touch of 1.3150 is expected before we can see more downside movement. If 1.3150 is surpassed, the next resistance is located at 1.3200 but we might experience slow and ranging movement until the ECB meets this week. The first level of interest to the south is 1.3100.

Fundamental Outlook
The main event of the day will be the release of the American Manufacturing PMI scheduled at 2:00 pm GMT. This is a survey of about 400 purchasing managers from the manufacturing sector who are asked to rate economic and business conditions; the anticipated value is 57.0 and higher numbers usually strengthen the greenback as they suggest that optimism among purchasing managers is increasing.


GBP/USD
The Pound strengthened earlier in the day but the disappointing value of the British Manufacturing PMI stopped further bullish advances and erased some of the Pound’s gains.

Technical Outlook
The current bullish move can be considered just a retracement in a rather strong downtrend so we expect downside movement and another close encounter with 1.6550 support. The Relative Strength Index is approaching the overbought level for the first time in a long while and bearish divergence is present, a fact which favors another move south. If the pair continues upwards, it will encounter the first resistance at 1.6700.

Fundamental Outlook
AT 8:30 am GMT the British Construction PMI is released and anticipated to drop from last month’s 62.4 to 61.5. Since this is a measure of optimism among purchasing managers from the construction sector, it acts as a leading indicator of economic health and higher than anticipated numbers are beneficial for the Pound. As always, the US events will directly affect the pair as well.

[GDMFX]

FOREX NEWS: DOWNTREND RESUMED, MAJOR SUPPORT AHEAD

EUR/USD
Forex News: Speculation that the Fed will raise interest rates sooner than anticipated boosted the US Dollar and allowed it to climb versus its main counterparts. This affected our pair as well, but the impact was not tremendous and major support was not touched.

Technical Outlook
If 1.3100 support is touched, we expect bullish pullbacks into 1.3150 – 1.3200 resistance. On a Daily chart the trend has been moving straight down for an extended period and the Relative Strength Index is deep in oversold territory. These factors call for a “breather” in the form of a retracement north but the pair’s direction may be affected by the economic indicators that are released today.

Fundamental Outlook
The European Retail Sales numbers come out at 9:00 am GMT and a negative change is expected from the previous 0.4% to -0.3%. Although Retail Sales are usually a high impact indicator, this release is likely to have a muted impact because Germany and France have already released their consumer spending indicators, but higher than anticipated numbers will most likely add some strength to the Euro.


GBP/USD
The Pound weakened drastically against the US Dollar as a survey showed increased support for Scotland’s independence which will be decided through a referendum later this month. The release of the British Construction PMI was mostly overlooked by market participants.

Technical Outlook
Now that 1.6550 is clearly broken, the first support and target for the pair is located at 1.6460. The downtrend is resumed and the ranging period is hopefully over but we might see moves close to 1.6550 before 1.6460 is touched. If such a scenario occurs and 1.6550 will turn into resistance, the chances of a touch of 1.6460 will increase.

Fundamental Outlook
The UK Services PMI is released today at 8:30 am GMT and it’s expected to drop from last month’s 59.1 to 58.6, a fact which would be detrimental for the Pound. The indicator is a measure of optimism among purchasing managers from the British Services sector and also acts as a leading indicator of economic health.

[GDMFX]

FOREX NEWS: INTEREST RATES AND AN EARLY LOOK INTO AMERICAN EMPLOYMENT LEVELS SET THE STAGE FOR A WILD DAY

EUR/USD
Forex News: A cease-fire agreement between Russia and Ukraine strengthened the single currency and triggered a move up. Market participants overlooked the disappointing value of the European Retail Sales and the pair experienced a bullish day.

Technical Outlook
From a purely technical point of view, a bounce off of the current level at 1.3150 is very likely. If this bounce occurs, the next destination is 1.3100 support, but Mario Draghi’s speech and the ECB interest rate decision will decide the day’s direction and the technical aspect will be secondary.

Fundamental Outlook
At 11:45 am GMT the ECB will make public their decision regarding the interest rate which is not expected to change from the current 0.15%. A Press Conference will follow at 12:30 pm GMT and during this conference the highest volatility of the day will probably be seen. There has been a lot of talk about additional measures adopted by the ECB to stimulate economic growth and during the press conference ECB President Mario Draghi will probably answer questions on the matter. His attitude will be closely watched by market participants and will trigger sharp moves.

A privately owned company will release an early version of the US Non Farm Employment Change at 12:15 pm GMT. This data tries to mimic the government issued indicator which is released Friday and usually has a hefty impact on the market. The anticipated number is 216K and higher values usually strengthen the US Dollar but Friday’s indicator normally has a higher impact.


GBP/USD
The pair retraced higher yesterday with the help of a better than expected value of the Services PMI but bears regained control later in the day and a new low was printed.

Technical Outlook
The pair reached the important support located at 1.6460 but now it shows clear signs of slowing down. We can see multiple candles which suggest indecision and the Relative Strength Index reached oversold territory. This makes it harder for the bears to push the pair further down and increases the chances of bullish retracements but price action will be influenced by the fundamental aspect.

Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the interest rate but no change is expected (currently 0.50%). Because a Statement is issued only in the case of a rate change, today we will probably not have any information about the reasons that stood behind the rate decision and this diminishes the impact of the event. However, surprises can happen and we recommend caution if trading at the time. The US events will have a direct impact on the pair’s movement throughout the day.

[GDMFX]

FOREX NEWS: ECB SURPRISES THE MARKET WITH ANOTHER RATE CUT. FOCUS SHIFTS ON NON FARM PAYROLLS

EUR/USD
Forex News: The ECB unexpectedly decided to cut the interest rate to 0.05% (previously 0.15%) and Mario Draghi announced that a form of Quantitative Easing will be introduced in order to stimulate the economy. He also mentioned that other measures might be implemented if needed.

Technical Outlook
The surprise offered by the ECB drastically weakened the Euro and the effect was a massive drop of almost 200 pips. The selloff broke 1.3100 and brought the pair into the psychological support at 1.3000, solidifying the control of the bears and renewing the downtrend. Today’s direction will be heavily affected by the US Non Farm Payrolls but strictly from a technical point of view, we expect a small bounce followed by a trend continuation.

Fundamental Outlook
The day’s main event will be the release of the Non Farm Payrolls which is scheduled at 12:30 pm GMT; the expected number is 226K, an increase from last month’s 209K. Higher numbers show that more jobs were created and usually this strengthens the greenback because employment is closely correlated with consumer spending which in turn is a major part of the economy. The NFP release is known to be a huge market mover thus caution is recommended if trading at the time.


GBP/USD
The Bank of England left the rate unchanged and the event didn’t have a huge impact on the pair’s movement but US Dollar strength generated a clear break of 1.6460 support.

Technical Outlook
The downtrend is resumed and 1.6460 is clearly broken. This level will probably turn into resistance and will reject any bullish moves that may come close to it. The first major support is now located at 1.6250 (visible on a Daily chart) and the Relative Strength Index continues to move in oversold territory, a fact which favors moves to the north in the form of small retracements. The day’s direction will be heavily influenced by the American NFP release which will overshadow the technical side.

Fundamental Outlook
The United Kingdom doesn’t release major economic indicators today and all eyes will be turned towards the American employment report.

[GDMFX]

FOREX NEWS: THE CALM AFTER THE STORM. THE MARKET SLOWS DOWN

EUR/USD
Forex News: Friday’s price action was heavily influenced by the worse than expected value posted by the American Non Farm Payrolls, a fact which allowed the pair to climb. However, the Euro bulls weren’t strong enough to sustain the move and some of the gains were erased.

Technical Outlook
The last two days of last week were heavily influenced by the fundamental environment and the moves generated were huge. Such movement is often followed by sideways price action and we believe the pair will range between the low at 1.2920 and the potential resistance at 1.3000. Usually Mondays are slow days unless major news comes out and today the schedule is pretty light.

Fundamental Outlook
The only noteworthy indicator released today is the German Trade Balance which shows the difference in value between imported and exported goods. The expected figure is 17.3B compared with last month’s 16.2B and higher numbers will most likely strengthen the Euro but the indicator has a mild impact on price action unless surprising values are posted. The time of the release is 6:00 am GMT.


GBP/USD
Similar to the Euro, the Pound briefly gained on the back of the worse than expected value of the US employment report but overall Friday was slow compared to the previous days.

Technical Outlook
First major support is located at 1.6250 and will probably attract price like a magnet since it is very close and it is considered a key level for medium term price action. The first lower barrier is represented by Friday’s low located at 1.6280 which is considered minor support. We expect a rather slow day based on the fact that no important economic or financial indicators are released.

Fundamental Outlook
As mentioned above, the fundamental scene is calm and price action will be governed by the technical aspect.

[GDMFX]

FOREX TECHNICAL ANALYSIS: SLOW ECONOMIC SCENE TRANSLATES INTO RANGING PRICE ACTION.

EUR/USD
Forex Technical Analysis: The huge surprise offered by the ECB in the form of a new rate cut triggered a major selloff which was definitely last week’s central event and will probably influence this week’s price action as well. The weekly candle was strong bearish and a new yearly low was printed.

Technical Outlook
As seen in the picture above, the Relative Strength Index on a Weekly chart shows that the pair is trading in oversold territory. Daily and four-hour charts show the same condition and this makes us believe that pullbacks are a high-probability scenario. If this comes true, the first level which could act as major resistance is located at 1.3100 since 1.3000 was a less important support before being broken. The next major support is located around 1.2750 but before (and if) it is touched, a retracement must occur.

Fundamental Outlook
The week ahead is slow in terms of economic releases and this makes us believe that we won’t see massive moves similar to last week’s price action. Monday’s only notable indicator is the German Trade Balance which shows the difference in value between imported and exported goods but usually has a mild impact on the Euro unless surprising numbers are posted. Tuesday we have another slow day when only the French Trade Balance can trigger some volatility but the indicator is known to be even less important than the German one.

Wednesday no major indicators are released and Thursday the German Final CPI comes out. The “Final” version is far less important than the “Preliminary” version but considering the lack of events this week, it could generate some volatility.

Friday will be the busiest day of the week as the US Retail Sales numbers are released. Sales made at a retail level represent the main part of consumer spending which in turn accounts for about two thirds of overall economic activity, thus the event is considered a huge market mover. Later in the day the University of Michigan will release a survey with regard to consumer sentiment which is a leading indicator of future consumer spending.


GBP/USD
The Pound continued to weaken last week and the bears gained momentum on the back of US Dollar strength. Also, a poll showed increased support for Scottish independence and a possible separation from the United Kingdom.

Technical Outlook
Price is nearing the key level at 1.6250 and if this level is touched, we anticipate a bounce higher. The bears had a tremendous run and clearly controlled the pair for an extended period of time; this control is likely to continue but profit taking combined with the oversold condition of the Relative Strength Index and the importance of the support ahead are likely to push the pair higher. The first potential resistance is located at 1.6460 but a break of support could bring in more sellers.

Fundamental Outlook
Tuesday the British Manufacturing Production is released and BOE Governor Mark Carney will speak publicly in Liverpool. Better than expected manufacturing data and a hawkish Carney will probably set the stage for bullish moves. Later the same day, an estimate of the British Gross Domestic Product is released and can generate strong moves as this is the main gauge of an economy’s performance.

Wednesday the Inflation Report Hearings take place. BOE Governor Mark Carney and other Monetary Policy Committee members will testify on inflation and economic outlook before the Treasury Committee of the Parliament. Strong moves are expected, depending on Carney’s attitude and answers, thus caution is recommended. As always, throughout the week, price action will also be influenced by the American releases.

[GDMFX]

FOREX NEWS: THE POUND DROPS AS SCOTTISH INDEPENDENCE BECOMES A DISTINCT POSSIBILITY

EUR/USD
Forex News: The German Trade Balance showed improved numbers but overall the day lacked strong movement and the pair traded inside a 30 pip range for almost the entire duration of the day.

Technical Outlook
The day ahead is likely to be characterized by ranging movement, similar to the one experienced yesterday. The pair is capped to the downside by the low located at 1.2920 and we might see another attempt to break it but the Relative Strength Index is making its way up, coming from oversold territory and this suggests that price may revisit the zone around 1.3000 as a stronger bullish retracement is still anticipated. However, keep in mind that control belongs to the bears and a break of the low can easily occur.

Fundamental Outlook
The French Trade Balance is announced at 6:45 am GMT. The indicator shows the difference in value between imported and exported goods but it is known to have a mild impact on price action. The expected value is -5.0B while the previous was -5.4B and higher numbers are usually beneficial for the Euro.


GBP/USD
A poll regarding a potential separation of Scotland from the United Kingdom showed that for the first time the number of people who are pro-independence exceeded the number of people who still want to be a part of the United Kingdom.

Technical Outlook
The poll result triggered a massive downside gap which made the pair open below the key level at 1.6250. A potential separation of Scotland from the United Kingdom will severely damage the Pound and until the 18th of September (the day when Scottish people will express their view through a referendum), we are likely to see irregular and hard to predict price action. For now the first minor support is located at 1.6100 while potential resistance sits in the 1.6250 zone.

Fundamental Outlook
At 8:30 am GMT, Bank of England Governor Mark Carney will deliver a speech in Liverpool. Considering the latest developments, this speech is likely to have a higher impact than usual but it all depends on his attitude and matters discussed. At the same time the British Manufacturing Production change is announced and the expected value is 0.3%, same as last month. Because Manufacturing is an important part of the entire British Industrial Production, today’s release is considered a high-impact one and higher values will most likely strengthen the Pound.

At 2:00 pm GMT an unofficial estimate of the British Gross Domestic Product is released. This estimated value is calculated using statistical projection techniques and has an impact similar to the one of the official release. The previous estimate was 0.6% and higher numbers will most likely strengthen the Pound.

[GDMFX]

FOREX NEWS: BULLISH PRESSURE MOUNTS AS RETRACEMENTS ARE STILL EXPECTED

EUR/USD
Forex News: The economic scene lacked major developments and the pair moved lower just to return higher later in the day. Yesterday’s low was broken before the bullish move and a new yearly low was printed.

Technical Outlook
Currently the pair is testing the recently broken level of 1.2920 but the downtrend doesn’t show signs of slowing down thus there’s a high probability that price will bounce lower, turning the previous support into resistance. The next major support is located at 1.2750 (better seen on a Daily chart) and the first resistance sits at 1.3000.

Fundamental Outlook
The day ahead has a lackluster news scene for the Euro and US Dollar and price action will be mostly influenced by the technical aspect.


GBP/USD
Mark Carney’s speech was postponed for a few hours yesterday but the bullish effect created by the Governor’s attitude was soon dampened by the sellers’ pressure.

Technical Outlook
The pair moved above and below the level at 1.6100 and the day was pretty volatile but neither side made any major advances. The Relative Strength Index continues to trade deep into oversold territory and the possibility of bullish moves has increased but the Pound cannot seem to recover, mostly due to the Scottish independence issue which continues to be a major influence. Minor support sits at 1.6060 while first resistance is located at 1.6160.

Fundamental Outlook
Bank of England Governor alongside members of the Monetary Policy Committee will testify on economic outlook and inflation today at 1:45 pm GMT, before the Parliament’s Treasury Committee. Their speeches will most likely have a strong impact on the Pound but the direction will be determined by their answers and attitude. Volatility will probably be high and caution is recommended.

[GDMFX]

FOREX NEWS: SHORT TERM RESISTANCE HOLDS. THE PROBABILITY OF NEW LOWS INCREASES

EUR/USD
Forex News: Yesterday the pair showed mixed price action with both the bulls and the bears battling for control. No major indicators were released and price couldn’t break minor resistance but the sellers didn’t manage to threaten support either.

Technical Outlook
Price action established the zone around 1.2960 as short term resistance and this will be the first barrier in front of higher prices. Yesterday we saw another rejection off of this level but further bullish movement is not out of the question and a break of the mentioned level will most likely bring in additional buyers. To the downside, the first level of interest sits at 1.2860 and a break would show that bears still have some steam left and that price will continue to move south, towards 1.2750.

Fundamental Outlook
The day’s direction will be influenced by Mario Draghi’s speech scheduled at 7:00 pm GMT. The ECB President will speak in Milan at the Eurofi Financial Forum 2014 and any reference regarding the current Euro Zone situation will most likely trigger a response in the market. Keep in mind that the relatively late hour of the speech may be a reason why impact could be mild; however, if Draghi’s position will be straightforward, the market impact will be strong so we recommend caution.


GBP/USD
After a touch of support, the pair headed north yesterday on the back of a hawkish attitude shown by Bank of England Governor Mark Carney during the Inflation Report Hearings.

Technical Outlook
Although we had some bullish action yesterday, the pair didn’t manage to break the short term resistance located at 1.6160. This might be a sign that downside movement is next, aiming for 1.6060 support, but we must note the position of the Relative Strength Index which is now coming out of oversold territory for the first time in a long period, a fact which favors the bulls. However, bearish price action is anticipated, considering the strong downtrend the pair is in.

Fundamental Outlook
The United Kingdom didn’t schedule important news releases for the day so price direction will be influenced by the technical factors.

[GDMFX]

FOREX NEWS: TODAY’S HEADLINE – THE AMERICAN RETAIL SALES

EUR/USD
Forex News: The Euro had a bullish day yesterday but price remained between support and resistance for almost the entire duration of the trading session.

Technical Outlook
Today we expect a break of either the resistance at 1.2960 or the support at 1.2860 but the direction will be mainly influenced by the outcome of the American Retail Sales which will have a strong impact on the greenback. Major support sits at 1.2750 and we expect this level to be touched in the near future but not necessarily today.

Fundamental Outlook
As mentioned above, the American Retail Sales are released today and the outcome could influence the US Dollar heavily. The scheduled time is 12:30 pm GMT and the expected change is 0.3%, better than last month’s 0.0%. Sales made at a retail level represent the major part of the economy and the release is considered a major market mover; at the same time, the Core version of this indicator (which excludes automobiles from calculation) is released. For both versions, higher values normally strengthen the US Dollar.


GBP/USD
The Pound continues to be heavily influenced by speculation regarding Scottish independence and yesterday we saw bullish movement on the back of a new poll which showed that more people wish that Scotland remains a part of the United Kingdom.

Technical Outlook
Lately the technical aspect was overshadowed by the Scottish independence issue and this is likely to be a reason for speculation until the referendum result will be posted next week. For the time being, we can see some sort of rejection off of the resistance at 1.6750 and bearish divergence is present, so we anticipate a move lower which will probably find support at 1.6160 but a break of the current level could generate additional movement north.

Fundamental Outlook
There are no major news releases for the Pound today, thus price direction will be influenced by the US events and the technical aspect.

[GDMFX]

FOREX NEWS: DOWNTREND REMAINS INTACT AS RESISTANCE STILL HOLDS

EUR/USD
Forex News: The US Retail Sales didn’t have a major impact on the US Dollar although better than expected values were posted. Friday was mostly controlled by the Euro bulls but short term resistance couldn’t be broken.

Technical Outlook
Lately the level at 1.2960 is becoming more important because we already saw three failed attempts to break it. Last week ended with price very close to the mentioned level and today we expect a move away from it, possibly to the downside since we are still in a clear downtrend and the bears still have underlying strength. The year’s low at 1.2860 will be the first target but we don’t expect it to be reached within a day; on the other hand, a clear bullish break of 1.2960 will invalidate our scenario, making 1.3000 the pair’s next destination.

Fundamental Outlook
The scene is pretty calm today, with the only notable indicator being the US Industrial Production released at 1:15 pm GMT. The indicator shows the change in the value of total industrial output compared with the previous month but for today’s release no change is anticipated from the previous 0.4%. Usually, higher than expected values are beneficial for the greenback and push the pair lower.


GBP/USD
Friday the pair moved in a narrow range close to the level at 1.6250 and no substantial advances were made by either side as the American Retail Sales failed to trigger strong moves.

Technical Outlook
Price action reached a 50 period Exponential Moving Average which combined with the level at 1.6250 creates a confluent resistance zone that will be tough to break. This increases the chances of bearish price action for the day but a move above the confluence zone will probably trigger additional bullish momentum. First support sits at 1.6160 but a touch of this level is less probable to happen today even if price will resume downwards movement.

Fundamental Outlook
The United Kingdom didn’t schedule any important news releases for today and price action will be mainly influenced by the technical aspect and by the American release mentioned earlier.

[GDMFX]

FOREX NEWS: GERMAN ZEW AND BRITISH INFLATION NUMBERS DRIVE PRICE ACTION

EUR/USD
Forex News: During the first part of yesterday’s trading session, the pair begun to move south but later on, a disappointing reading of the American Industrial Production weakened the US Dollar and allowed the Euro to push higher.

Technical Outlook
The resistance situated at 1.2960 managed to reject price once more and to stop bullish momentum. As long as the pair remains below the 50 period Exponential Moving Average and below resistance, the downtrend is intact and there are high chances of more downside movement, with the first important target being located at 1.2860.

Fundamental Outlook
An important German survey is released today at 9:00 am GMT: the ZEW Economic Sentiment. The importance of this survey comes from the fact that it is based on the opinions of German institutional investors and analysts who are well informed on the economic situation due to the nature of their jobs. The expected value is 5.2 and better than expected numbers will benefit the Euro.

At 12:30 pm GMT the American Producer Price Index is released and expected to remain unchanged at 0.1%. The indicator shows the change in prices charged by producers for their goods and services and usually, higher values strengthen the greenback.


GBP/USD
For almost the entire day the pair moved above and below the level at 1.6250, without any substantial developments. The US release went almost unnoticed and overall we had a ranging day.

Technical Outlook
We expect a day with stronger movement today and potential downtrend resumption if the bulls cannot break the confluence zone created by the 50 period Exponential Moving Average and the resistance at 1.6250. The first minor support is located at 1.6160 but today’s direction will be influenced by the fundamentals.

Fundamental Outlook
The British Consumer Price Index is released today at 8:30 am GMT and another small drop is expected, from the previous 1.6% to 1.5%. Although British inflation is not really a matter of concern at the moment because it stayed in an acceptable range, lower numbers are perceived as bearish and might drive the pair south.

[GDMFX]

FOREX NEWS: FOMC CLUSTER OF EVENTS SETS THE STAGE FOR STRONG MOVEMENT

EUR/USD
Forex News: The German ZEW survey showed that optimism among professional investors and analysts increased but the value was still lower than the previous month and price ranged for the most part of the day.

Technical Outlook
The pair is still trading very close the 50 period Exponential Moving Average and below resistance so the downtrend remains intact for the time being. However, the bearish momentum slowed down considerably and moves to the upside are possible but the day’s direction will be influenced by the afternoon US events and the technical side will be secondary.

Fundamental Outlook
At 12:30 pm GMT the US Consumer Price Index is released but no change is expected from last month’s 0.1%; however, higher values can benefit the US Dollar and take the pair lower. At 6:00 pm GMT a cluster of American events will most likely shake the market: the US Federal Funds Rate, the FOMC Rate Statement and Economic Projections, followed half an hour later by a FOMC Press Conference. Caution is recommended during these events as direction will depend on their outcome.


GBP/USD
The British CPI declined as analysts predicted, weakening the Pound, but later during yesterday’s trading session the US Dollar declined and the Pound erased all losses, managing even to climb higher than the opening of the day.

Technical Outlook
Yesterday’s climb was mostly based on US Dollar weakness rather than Pound strength and the major resistance at 1.6250 is still not broken decisively so the picture remains fuzzy until we see a clear move above resistance, followed by a re-test of the broken level. Keep in mind that yesterday the pair almost touched 1.6160 support and immediately bounced higher, a fact which shows bull strength. Just like in the case of the Euro, today’s price direction will be heavily influenced by the fundamental side.

Fundamental Outlook
United Kingdom’s Claimant Count Change is released today at 8:30 am GMT. The indicator shows the change in the number of jobless people who apply for social help related to their unemployed condition and lower numbers than the anticipated -29.7K are usually beneficial for the Pound. At the same time a breakdown of the latest MPC votes on the interest rate will be released, showing the members’ position regarding a future rate change. Of course, the US events mentioned earlier will have a direct and probably strong impact on the pair.

[GDMFX]

FOREX NEWS: SCOTTISH INDEPENDENCE VOTE – AN EVENT WITH HISTORICAL IMPLICATIONS

EUR/USD
Forex News: The US Dollar strengthened yesterday on the back of Yellen’s hawkish comments as she noted that economy is continuing to make progress towards goals but the FOMC outlook didn’t offer too many surprises and movement was far from smooth on the lower time frames.

Technical Outlook
It seems like the bears are gathering strength for another push towards the support at 1.2860. Although 1.2960 was briefly broken and 1.3000 was almost touched, the bulls couldn’t sustain the move and this shows their lack of power, thus increasing the chances of more downside movement. The day ahead is full of market-shaking events and a prediction based solely on technical factors cannot be very accurate.

Fundamental Outlook
The European Central Bank will announce today the Targeted LTRO (Long Term Refinancing Option) which is the amount of money the Central Bank will create and loan to European banks. This is the first month of the program and the effects are hard to anticipate since market participants still don’t know exactly what is too much or too little, thus we recommend caution for this release. The scheduled time is 10:15 am GMT.

At 12:45 pm GMT Fed Chair Janet Yellen will deliver a speech at a Conference in Washington DC but the effects are likely to be mild considering that she will speak via satellite and audience questions are not expected. The Philly Fed Manufacturing Index is announced at 2:00 pm GMT and is expected to drop from the previous 28.0 to 22.8, a fact which would weaken the US Dollar and drive the pair higher.


GBP/USD
Better than expected unemployment data helped the Pound climb during the first part of yesterday but the US events brought the pair back down, erasing the previous gains.

Technical Outlook
After yesterday’s initial climb above 1.6250 and above the 50 period Exponential Moving Average, the pair returned to the broken zone and this type of price action can have two outcomes. A move below the mentioned zone would suggest downtrend continuation and possibly a touch of 1.6160 support, while a bounce higher means that the strength of the bears is starting to fade and the Pound is ready to recover.

Fundamental Outlook
Today the Scottish people will express their opinion regarding Scottish Independence through a vote. Irregular movement is anticipated throughout the day because a potential separation of Scotland from the United Kingdom would have tremendous historical implications and would drastically weaken the Pound. It is uncertain when the vote results will come out and a high level of caution is recommended.

The British Retail Sales come out at 8:30 am GMT and are expected to increase by 0.4% while last month’s change was 0.1%. This would strengthen the Pound but the market will be affected by the Scottish vote which may overshadow any other events.

[GDMFX]

FOREX NEWS: BULLS MAKE THEIR PRESENCE KNOWN BY THREATENING RESISTANCE

EUR/USD
Forex News: After an unsuccessful attempt to break support, the pair bounced higher and continued to move in this direction for the entire day. The LTRO value was set at 82.6 Billion Euros but the time of the release was changed, taking traders by surprise.

Technical Outlook
The support zone around 1.2860 was pierced yesterday but price bounced higher soon after; however, the pair is still trading below the 50 period Exponential Moving Average and we saw a new low yesterday so the current bullish move must be considered just a simple retracement in a downtrend. A break above the 50 EMA and above 1.2960 would weaken the downtrend and open the door for a stronger move to the upside.

Fundamental Outlook
The day ahead lacks any notable economic or financial releases and we expect price action to be driven by technical factors.


GBP/USD
At the time of writing, the official results regarding the Scotland’s Independence Vote were not released but polls and surveys showed that Scottish people favored a “No” vote and probably the United Kingdom will remain with its current structure.

Technical Outlook
After the initial break of 1.6250, price re-tested the level from above and bounced higher on optimism that Scotland will remain a part of the United Kingdom. This bullish movement is likely to continue until 1.6460 is reached but if this occurs, we expect some sort of bearish reaction as probably the Relative Strength Index will enter oversold territory and the sellers still have underlying strength.

Fundamental Outlook
After a week filled with important events, the fundamental scene calms down a bit as no major events are scheduled for release.

[GDMFX]

FOREX NEWS: ECB PRESIDENT TESTIFIES – VOLATILITY ALMOST GUARANTEED

EUR/USD
Forex News: For almost the entire duration of Friday’s trading session the US Dollar gained and the pair moved south, ending the week below support. No major news came out but Euro weakness combined with Dollar strength triggered a 100 pip drop.

Technical Outlook
The bears took back control of the pair and drove price all the way down to 1.2860. The level was broken Friday but we are likely to see moves above it today, with the first resistance being represented by the 50 period Exponential Moving Average. To the downside, support is located at 1.2750 but we don’t expect this level to be touched today.

Fundamental Outlook
At 1:00 pm GMT, ECB President Mario Draghi will testify on monetary policy and this will be the day’s main event. He will speak in Brussels, before the European Parliament’s Economic and Monetary Committee and his attitude will be closely watched by traders around the world; high volatility is expected and caution is recommended.


GBP/USD
Similar to the Euro, the Pound gave back some of the previous gains and dropped for more than 200 pips Friday after climbing against the Dollar on the back of the Scottish referendum vote.

Technical Outlook
The bears’ underlying strength was made clear Friday and the break of 1.6460 resistance couldn’t be sustained by the buyers, a fact which indicates that more downside movement will follow. The first barrier in front of the sellers is located at 1.6250 support and today we are likely to see a touch of this level. However, we don’t expect a break or any other major developments as the day lacks British economic and financial releases.

Fundamental Outlook
The US Existing Home Sales are released at 2:00 pm GMT with an expected value of 5.21M. Higher numbers suggest a thriving economy and can add to the strength of the US Dollar. As already mentioned, the United Kingdom didn’t schedule any news releases today thus price action will be driven by the American events and by technical factors.

[GDMFX]

FOREX NEWS: EUROPEAN MANUFACTURING DATA IN THE SPOTLIGHT

EUR/USD
Forex News: Mario Draghi’s speech didn’t create the expected volatility although he mentioned the fact that additional stimulus may be implemented if the current measures are not enough to fend off the risk of deflation.

Technical Outlook
The comments made by the ECB President weakened the Euro and the pair bounced lower after successfully testing 1.2860 from below. The next major target remains the support at 1.2750 and for the time being resistance is represented by 1.2860. The Relative Strength Index doesn’t show an extreme reading and price is still trading below the 50 period Exponential Moving Average so for now the downtrend is intact.

Fundamental Outlook
The French Flash Manufacturing PMI is released today at 7:00 am GMT and expected to change to 47.1. Half an hour later the German indicator with the same name will come out with an anticipated value of 51.3. Both indicators are gauges of optimism among purchasing managers from the manufacturing sector and better than expected numbers will most likely strengthen the Euro since these surveys are also leading indicators of economic health.


GBP/USD
The Pound showed some bullish behavior yesterday but for the most part it traded in a range, without any major developments taking place.



Technical Outlook
We are still expecting a touch of 1.6250 from above and even a potential break as the bears still have a lot of underlying strength. If the pair will bounce higher once this potential touch occurs, we are likely to see an extended move north, probably into the zone around 1.6460, but such a distance will not be traveled in one day unless a surprising event takes place.

Fundamental Outlook
The main Pound affecting event is the release of the Mortgage Approvals by the British Bankers’ Association, scheduled at 8:30 am GMT. The indicator offers insights into the health of the British house-market because usually a home is purchased with a mortgage, thus higher numbers than the forecast 42.9K will be beneficial for the Pound.

[GDMFX]

FOREX NEWS: MIXED PRICE ACTION AHEAD OF GERMAN BUSINESS CLIMATE SURVEY AND AMERICAN HOUSING DATA

EUR/USD
Forex News: The first part of yesterday’s trading session was controlled by the bulls and the pair climbed comfortably above resistance but during the second part of the day we saw the sellers take control and push price back into the broken level.

Technical Outlook
Currently the price is hovering near 1.2860 level which was previously resistance. If the pair cannot move back below this level and instead we see rejection here, we are likely to witness an extended move north, into the resistance located at 1.2960. A move below 1.2860 would probably reignite the bears’ willingness to move the pair into 1.2750 key support.

Fundamental Outlook
At 8:00 am GMT the German IFO Business Climate survey will be released with an anticipated change from the previous 106.3 to 105.9. The importance of this survey comes from its large sample size of about 7,000 businesses; the representatives of these businesses are asked to offer their opinion regarding the current economic and business conditions as well as a 6 month outlook. Under normal conditions, higher numbers than forecast strengthen the Euro.
The American New Home Sales will be released at 2:00 pm GMT and expected to increase to 432K from the previous 412K, a fact which would be considered bullish for the US Dollar and may take the pair lower.


GBP/USD
The British Mortgage Approvals disappointed but the Pound moved higher in the beginning of the day; however, it gave back some of the previous gains and price action was rather mixed.

Technical Outlook
Yesterday’s movement doesn’t offer a lot of hints about future direction but the pair is approaching 1.6460 resistance and this level will probably act as a magnet to price. If we are going to see a touch of the mentioned level, a bounce-or-break scenario will unfold: a breakout would open the door for a touch of 1.6550 and a potential trend reversal while a bounce would most likely draw in more sellers and renew the downtrend.

Fundamental Outlook
The United Kingdom didn’t schedule any major news releases today thus price direction will be mainly influenced by the US events and by the technical aspect.

[GDMFX]

FOREX NEWS: BEARS RENEW THE DOWNTREND AND THREATEN KEY SUPPORT

EUR/USD
Forex News: The pair tumbled during the first part of yesterday without any apparent reason other than the technical aspect and later in the day, the surprisingly better value of the US New Home Sales added more steam to the US Dollar, renewing the downtrend.

Technical Outlook
The pair found resistance at the 50 period Exponential Moving Average and quickly moved below 1.2860. More sellers joined once the US housing data was released and now the pair is most likely headed for the key support at 1.2750. Once this level is reached we are likely to see a retracement in the form of a move north or at least some ranging price action.

Fundamental Outlook
The day’s main event is the release of the American Durable Goods Orders scheduled at 12:30 pm GMT. These types of goods (with a life expectancy or at least 3 years) are usually purchased in times of economic expansion and an increased value suggests that people are confident in the overall economic situation. It also means that producers will have to increase their activity to satisfy demand. The expected change is -17.7%, a huge drop from the previous 22.6%; such a drastic value would most likely weaken the greenback.


GBP/USD
The bears made their presence known yesterday and managed to take the pair lower, a behavior mostly attributed to the better than expected value of the US New Home Sales.

Technical Outlook
Price came very close to the 50 period Exponential Moving Average which is the first barrier for the bears before 1.6250 can be reached. If the pair will move below this short term dynamic support, we are likely to see an extended move lower; otherwise the bulls will take price into the resistance located at 1.6460.

Fundamental Outlook
At 10:00 am GMT the Confederation of British Industry will announce the Realized Sales survey which is based on opinions of wholesalers and retailers regarding the current level of sales volume. The anticipated value is 34, a drop from last month’s 37 and we may see Pound weakness if this forecast comes true; however, the indicator usually has a medium impact.

Later in the day, at 12:40 pm GMT, BOE Governor Mark Carney will speak at a Conference in Wales. Huge moves are not expected but the chances of sudden, strong moves increase whenever a head of a Central Bank speaks so caution is recommended.

[GDMFX]

FOREX NEWS: AMERICAN GROSS DOMESTIC PRODUCT – THE LAST RELEASE OF A VOLATILE WEEK

EUR/USD
Forex News: The bears scored a major victory and broke key support yesterday on the back of US Dollar strength generated by a positive forecast made by Morgan Stanley, Bank of America and Corp. and Morgan Stanley based on speculation of a near-future rate increase.

Technical Outlook
The break of 1.2750 is indeed an important development which will probably bring in more sellers but for the time being, the pair is likely to show some sideways movement or even small retracements to the upside. For today we expect price to remain rather close to 1.2750, moving above and below it, with the first downside barrier being yesterday’s low at 1.2696.

Fundamental Outlook
The day’s main event is the release of the Final version of the American Gross Domestic Product, scheduled at 12:30 pm GMT. The expected change is 4.6% compared with the previous 4.2% and although this version has the lowest impact out of the three (Advance, Preliminary and Final), strong movement might occur if the value will surprise in any way.


GBP/USD
US Dollar strength took the pair slightly lower but our predicted target at 1.6250 was not touched and throughout the day price action was mixed and mostly ranging.

Technical Outlook
The pair moved below the 50 period Exponential Moving Average and 1.6250 support is very close to current price. This makes us still believe that 1.6250 will be touched today or in the near future; if the bulls can take the pair higher, this level is a place where they could show their willingness. A break of the level mentioned above would suggest that lower prices will follow and the next support will be located at 1.6160.

Fundamental Outlook
Today the United Kingdom didn’t schedule any important news announcements and price action will be influenced by the American GDP and by technical factors.

[GDMFX]

FOREX NEWS: GERMAN INFLATION DETERMINES TODAY’S BIAS

EUR/USD
Forex News: Friday the bears were in control for the entire day and managed to break minor support by taking the pair to new lows. The Final version of the American GDP came out with the anticipated value which was better than the previous, a fact which contributed to US Dollar strength.

Technical Outlook
Although the downtrend is at full strength, the Relative Strength Index is in oversold territory on hourly, four-hour and daily charts, a thing which makes a bullish pullback very probable. The zone around 1.2695 will probably act as resistance while support is located at 1.2660 and today’s direction will be mainly influenced by German inflation data.

Fundamental Outlook
At 12:00 pm GMT the German Preliminary Consumer Price Index will be released; this is the main inflation gauge for the German economy and has a hefty influence on European inflation. Today’s expected change is -0.1%, lower than last month’s 0.0% and this negative change will probably weaken the Euro.


GBP/USD
After a brief bullish move which found resistance at the 50 period Exponential Moving Average, the pair dropped for the rest of the day and the bears finished last week in control.

Technical Outlook
Our predicted target at 1.6250 was reached and now a bounce-or-break scenario is in effect (for the time being 1.6250 is not considered clearly broken). A break of the level would make 1.6160 the next destination while a bounce higher will probably find resistance at the 50 period Exponential Moving Average. The Relative Strength Index has reached the 30 level on an hourly chart but on a four hour chart it still has room to move down so we cannot consider this a clear oversold condition.

Fundamental Outlook
The Bank of England will reveal the value of the Net Lending to Individuals today at 8:30 am GMT; the indicator shows the change in value of credit approved towards consumers and usually higher values suggest optimism. Today’s expected value is 3.1B, a drop from last month’s 3.4B.

[GDMFX]

FOREX NEWS: UNDERLYING US DOLLAR STRENGTH DRIVES PRICE LOWER

EUR/USD
Forex News: The Euro bulls managed to take the pair higher yesterday on the back of better than expected German inflation. Support was briefly touched but no serious attempts to break it were made.

Technical Outlook
The support at 1.2660 sits in front of the pair’s descent but the US Dollar continues to have respectable strength and we believe that a break of the mentioned level will occur in the near future. The downtrend is intact and going strong so yesterday’s bullish move must be regarded as a simple retracement or pullback against the trend.

Fundamental Outlook
Euro Zone’s CPI Flash Estimate is today’s main event for the Euro; this indicator is the main gauge of inflation and as we know, inflation is a major concern of the ECB’s because the current level is considered too low. The time of release is 09:00 am GMT and the expected value is 0.3%, a drop from last month’s 0.4%, a fact which will affect negatively the Euro if it comes true.

At 2:00 pm GMT the US Consumer Confidence survey is released. The forecast is 92.2, a slight decrease from last month’s 92.4. Since confidence among consumers is closely correlated with consumer spending, a higher number for today’s release will most likely generate more Dollar strength.


GBP/USD
The Net Lending to Individuals was close to the anticipated value and the release didn’t create a lot of movement. For the entire day the pair remained below 1.6250 and movement was ranging.

Technical Outlook
Although the bears weren’t very convincing yesterday and the pair mostly ranged near 1.6250, we anticipate a more serious descent today. The US Dollar is surrounded by a positive sentiment lately, gaining against almost all of its counterparts and from a technical point of view, 1.6250 combined with the 50 period Exponential Moving Average creates a confluence zone which acts as resistance.

Fundamental Outlook
United Kingdom’s Current Account is announced today at 08:30 am GMT and it’s anticipated to change from the previous -18.5B to -16.9B. The indicator represents the difference between imported and exported goods and higher values suggest that currency demand is increasing. Price action today will be influenced by the American Consumer Confidence as well.

[GDMFX]

FOREX NEWS: NEW LOWS REACHED. THE PROBABILITY OF RETRACEMENTS HAS INCREASED

EUR/USD
Forex News: The Euro was negatively affected yesterday by inflation that continues to decline and this fact, coupled with underlying US Dollar strength, generated another strong move south.

Technical Outlook
The support at 1.2660 was broken decisively yesterday and the Euro is heading for a 2 year low against the Dollar. It is clear that bears are in control of the pair but a bullish pullback against the main trend is expected, considering the fact that the downtrend is overextended and the Relative Strength Index is trading in oversold territory on more than one time frame. The first support is located at 1.2570 (yesterday’s low), while potential resistance sits at 1.2660.

Fundamental Outlook
Today at 12:15 pm GMT, Automatic Data Processing will release their version of the US Non Farm Employment Change which is anticipated to remain almost unchanged (206K) from last month’s 204K. This privately owned company releases an early employment report which tries to mimic the Government data which will be announced Friday and the impact differs from month to month but higher numbers are considered beneficial for the US Dollar.


GBP/USD
United Kingdom’s Current Account posted a disappointing value, weakening the Pound and driving the pair lower, in close vicinity of support.

Technical Outlook
Price is capped to the upside by the resistance at 1.6250 while to the downside support sits at 1.6160. The pair’s last encounter with this support generated a strong bullish move and the same is possible now, but a lot depends on the British Manufacturing data and American Employment. The Relative Strength Index doesn’t show an extreme reading but the 50 period Exponential Moving Average is angled downwards, increasing the chances of another push lower.

Fundamental Outlook
United Kingdom’s Manufacturing PMI is released today at 8:30 am GMT but the anticipated change is very small: 52.6 from last month’s 52.5. This is a survey based on the opinions of purchasing managers from the Manufacturing sector and acts as a leading indicator of economic health, thus higher numbers lead to a stronger Pound.

[GDMFX]

FOREX NEWS: THE MARKET PREPARES FOR THE ECB PRESS CONFERENCE

EUR/USD
Forex News: Yesterday’s price action was difficult to trade as the ADP Employment data posted better than expected values, causing the US Dollar to strengthen but later in the day it was weakened by a worse than expected value of a Manufacturing survey.

Technical Outlook
Price moved up and down yesterday without clear direction but we can notice the 50 period Exponential Moving Average is still providing good resistance on an hourly chart. It seems like bearish momentum is starting to fade away or at least to decrease in intensity but this can be easily changed by today’s ECB decision regarding the interest rate. The main levels to watch are 1.2660 as resistance and 1.2570 as support but the technical aspect will be secondary.

Fundamental Outlook
At 11:45 am GMT the European Central Bank will announce the Interest Rate which is not expected to change from the current value of 0.05% but we saw before that surprises can happen so we recommend caution at the time of the release and during the Press Conference which follows 45 minutes later. During the Conference, President Mario Draghi will read a prepared speech and afterwards will answer journalists’ questions. This second part of the Press Conference is known to generate strong volatility and often irregular movement, depending on the President’s answers and attitude.


GBP/USD
The British Manufacturing data disappointed and the Pound weakened as a result but later in the day price climbed to touch resistance.

Technical Outlook
The touch of 1.6250 resistance resulted in a bounce lower and overall we had a day which was tough to trade on the lower time frames. The important levels for today still remain 1.6160 as support (which was touched yesterday but price couldn’t break it) and 1.6250 as resistance (which combined with the 50 period Exponential Moving Average creates a confluence zone).

Fundamental Outlook
The British Construction PMI will be released today at 8:30 am GMT with an expected decrease from last month’s 64.0 to 63.7. This is a survey based on the opinions of about 170 purchasing managers from the Construction sector, regarding the current business conditions and acts as a leading indicator of economic health, thus a higher value is usually beneficial for the Pound.

[GDMFX]

FOREX NEWS: AMERICAN NON FARM PAYROLLS SET THE STAGE FOR A VOLATILE FRIDAY

EUR/USD
Forex News: The ECB Press Conference and Mario Draghi’s attitude generated mixed reactions and a lot of whipsaws. The interest rate remained unchanged and for the time being resistance is holding.

Technical Outlook
The irregular movement generated by Mario Draghi’s speech took price above 1.2660 resistance but soon after, the Euro weakened and the pair returned below the mentioned level. If the bears will take back control, this is a good place to do so and the first target will be 1.2570. Important US Employment data is released today and this will strongly affect the Dollar, making the technical aspect secondary.

Fundamental Outlook
Today the most important American jobs related indicator is released: the Non Farm Employment Change (also known as Non Farm Payrolls). The report tracks changes in the number of employed people and higher numbers suggest a thriving economy; an increase is also indicative of future growth in the retail sales sector. Today’s release is scheduled at 12:30 pm GMT and the expected number is 216K, a hefty rise from last month’s 142K.


GBP/USD
Although British Construction data posted a better value than expected, US Dollar strength took the pair lower for almost the entire day and short term support was broken yesterday.

Technical Outlook
The current move is likely to extend into the zone surrounding 1.6060 now that previous support was broken and may turn into resistance (1.6160). The pair is trading below the 50 period Exponential Moving Average and below resistance, without being oversold so we are likely to see lower prices especially if the American NFP will show a good reading.

Fundamental Outlook
The British Services PMI is released today at 8:30 am GMT and the forecast is 59.1, a drop from last month’s 60.5. If the forecast comes true or lower numbers are posted, the Pound will be negatively affected and the pair may descend further.

[GDMFX]

FOREX NEWS: SCARCE ECONOMIC DATA SLOWS DOWN PRICE ACTION

EUR/USD
Forex News: Friday we saw tremendous US Dollar strength generated by a better than expected value of the Non Farm Payrolls: forecast 216K; actual 248K. The US economy is continuing to post good numbers and this fuels speculation the Fed will increase interest rates before its counterparts.

Technical Outlook
The downtrend is very strong and the Dollar is surrounded by an overall positive sentiment, thus we expect to see the pair go even lower in the near future. The first barrier and possible target is located at 1.2440 but before it can be reached, we are likely to see price visit 1.2570 once again. Today we expect slow movement as no major indicators are released.

Fundamental Outlook
The only notable indicator released today is the German Factory Orders. The scheduled time is 6:00 am GMT and the expected value is -2.4%, a drop from last month’s 4.6%. Higher values suggest increased economic activity and have the potential to strengthen the Euro but the indicator usually has a low-to-medium impact.


GBP/USD
The US Dollar strengthened across the board Friday and this was felt by the Pound as well. The pair dropped to break support and the downtrend resumed, creating a new low.

Technical Outlook
Lately the Dollar breaks support levels with ease and the downtrend is going strong, with the next target being 1.5900. The Relative Strength Index is traveling in oversold territory and pullbacks against the main trend are likely to happen before the next support is reached. Potential resistance is located at 1.6060 but today we anticipate a slow day based on the fact that no economic indicators are released.

Fundamental Outlook
The United Kingdom didn’t schedule major indicator releases for the day, thus the technical aspect will influence price direction.

[GDMFX]

FOREX NEWS: FOCUS SHIFTS TOWARDS THE POUND FOR MANUFACTURING DATA RELEASE

EUR/USD
Forex News: Overall the Euro had a bullish day although the German Factory Orders came out with a disappointing value. Price action was mainly affected by the technical aspect and the bears still have a lot of underlying strength.

Technical Outlook
The oversold condition indicated by the Relative Strength Index materialized in a bullish pullback against the main trend. However, we consider this just normal market behavior as the downtrend is intact and further descent is likely to occur during the days to come. The current level at 1.2570 may become resistance if we see a bounce lower and the first support is located at 1.2440.

Fundamental Outlook
Today Europe and the United States didn’t schedule any major economic releases thus price direction will be influenced mainly by the technical aspect.


GBP/USD
The pair had a slow day, a fact also generated by the lackluster fundamental scene. Neither support nor resistance was threatened but price retraced slightly higher.

Technical Outlook
Price action was slow but bullish nonetheless and this is a fact which we expect to change today and price to make another attempt to reach the important support located at 1.5900. It’s possible to see a touch of 1.6060 before price will make a run for support, considering the position of the Relative Strength Index which is coming out of oversold territory.

Fundamental Outlook
The British Manufacturing Production is released at 8:30 am GMT with an expected change of 0.2% compared with last month’s 0.3%. Considering that manufacturing is an important part of United Kingdom’s economy, higher values can lead to a stronger Pound.
At 2:00 pm GMT an estimate of the British Gross Domestic Product is released. Last month’s value was 0.6% and anything above that will most likely strengthen the Pound.

[GDMFX]

FOREX NEWS: FOMC MEETING MINUTES MAY SPUR SPECULATION ABOUT A RATE HIKE

EUR/USD
Forex News: The pair moved above short term resistance, mostly because a stronger retracement was needed taking into consideration the tremendous drop seen throughout last months. A report regarding German Industrial Production showed disappointing figures, slowing the pair’s ascension.

Technical Outlook
The resistance at 1.2660 was touched several times yesterday but the bulls lacked the strength to break it, a fact which shows the underlying strength of the bears and makes us believe that price will resume downwards motion if today resistance is not broken. The first support is located at 1.2580 while the next resistance (if 1.2660 is broken) sits at 1.2750.

Fundamental Outlook
Europe doesn’t didn’t schedule any important news releases but the US Dollar will he highly affected by the FOMC Meeting Minutes which are made public at 6:00 pm GMT. The document will contain insights into the reasons which influenced the members’ votes regarding monetary policy and interest rate but more importantly, it may contain hints about a future rate increase. Such hints would fuel speculation about the US Dollar’s next direction and would influence the pair’s movement in a spectacular fashion.


GBP/USD
Similar to the Euro, the Pound slowly climbed above short term resistance. British Manufacturing Production disappointed but we attribute yesterday’s movement to trend exhaustion and to technical factors, not to fundamentals.

Technical Outlook
The resistance at 1.6060 was broken but now an important confluence zone sits in front of rising prices. This zone is represented by the level at 1.6160 and the 50 period Exponential Moving Average; a move above both these types of resistance would show that bulls may be preparing to reverse the downtrend. The US Dollar and consequently the pair will be heavily influenced by the FOMC Meeting Minutes.

Fundamental Outlook
The United Kingdom didn’t schedule major economic or financial indicators for today and we expect mixed movement ahead of the FOMC release.

[GDMFX]

FOREX NEWS: RESISTANCE THREATENED. WHAT IS THE ANSWER OF THE BEARS?

EUR/USD
Forex News: Trading was pretty slow ahead of the FOMC Meeting Minutes but the Dollar weakened considerably once the Minutes showed the Fed sees global economic slowdown as a threat to the US economic recovery.

Technical Outlook
The pair quickly climbed at the time of the FOMC release and 1.2750 resistance was reached. Now price is trading above the 50 Period Exponential Moving Average for the first time in a long while but this important level acts as a strong barrier. A break of 1.2750 would deal a big blow to the downtrend and we might see an extended move north. If price will have trouble breaking the level, the next destination is 1.2660 and the 50 period EMA.

Fundamental Outlook
The G20 Meetings start today and ECB President Mario Draghi will speak at 3:00 pm GMT in Washington DC. The main subject of the speech will be the latest European developments and, as always, volatility is expected and caution recommended because the Euro can be strongly affected by Draghi’s attitude.


GBP/USD
Similar to the Euro, the Pound couldn’t break resistance before the FOMC release but Dollar weakness allowed the pair to move swiftly up and to break resistance.

Technical Outlook
Currently the pair is trying to move above 1.6160 after breaking 1.6060 in a decisive manner. The market perceived the Meeting Minutes as very bearish for the greenback so we might see more upwards movement today but overall we are still trading in a market with a strong Dollar. Bearish activity is not out of the question although the momentum is in favor of the bulls and we consider a move below the 50 period Exponential Moving Average a sign of underlying US Dollar strength which may lead to a touch of 1.6060.

Fundamental Outlook
At 11:00 am GMT the Bank of England will announce the Interest Rate decision. The current value is 0.50% and an increase would add massive strength to the Pound; however, such an increase would be a tremendous surprise considering the fact that Bank of England didn’t offer any hints so far about a rate hike.

[GDMFX]

FOREX NEWS: CORRECTION OVER. DOWNTREND RESUMPTION AHEAD

EUR/USD
Forex News: The Euro bulls managed to take price higher during the early stages of yesterday but the climb couldn’t be sustained and price returned below resistance. Mario Draghi’s dovish attitude and comments weakened the Euro further and added more fuel to the downside.

Technical Outlook
The move that started at 1.2500 is considered a bullish correction to the main downtrend and it looks like it may have ended. The Relative Strength Index reached overbought territory in a strong downtrend and bulls failed to keep price above 1.2750; these factors combined with the prevailing downtrend make us believe that today we will see a break of 1.2660 which is first potential support. If this occurs, the next level of interest is located at 1.2580.

Fundamental Outlook
At 6:45 am GMT the French Industrial Production change is released and a drop from last month’s 0.2% to -0.2% is expected. The indicator usually has low or medium impact on the Euro but nonetheless, better numbers can strengthen the Euro.


GBP/USD
As forecast, the Bank of England didn’t change the Interest Rate and the event went almost unnoticed by market participants. The bears dragged the pair lower yesterday after the bulls failed to touch major resistance.

Technical Outlook
Price is very close to the 50 period Exponential Moving Average but if a clear break occurs the next target will become 1.6060 support. A new move above 1.6160 would suggest that bulls have enough strength to take price into the major level at 1.6250; however the Relative Strength Index was close to overbought before yesterday’s drop and this increases the chances of a bigger move to the downside.

Fundamental Outlook
United Kingdom’s Trade Balance is released today at 8:30 am GMT and the forecast is -9.6B. Since this indicator represents the difference between imports and exports, higher values are beneficial for the Pound.

[GDMFX]

FOREX NEWS: TODAY’S HEADLINES – GERMAN ZEW AND UNITED KINGDOM’S INFLATION

EUR/USD
Forex News: Yesterday Euro bulls managed to take price above first resistance although no major economic or financial indicators were released. The move was mainly technical and it’s not backed by strong fundamentals.

Technical Outlook
Price moved above 1.2660 resistance and above the 50 period Exponential Moving Average but we can notice the fact that momentum is starting to become neutral as the Moving average is almost flat on a four-hour chart. On an hourly chart we can see that yesterday’s price action created minor resistance at the psychological level of 1.2700 and this will be the first barrier in front of rising prices; a break would make 1.2750 the next target while a bounce lower would take us back into 1.2660.

Fundamental Outlook
The day’s main event is the release of the German ZEW Economic Sentiment scheduled at 9:00 am GMT, with an expected value of 0.2, a major drop from last month’s 6.9. This survey is based on the opinions of about 275 German professional investors and analysts and acts as a leading indicator of optimism and economic health. Under normal circumstances, a higher than expected number strengthens the Euro and takes the pair higher.


GBP/USD
The pair’s movement was rather mixed yesterday and we saw the bulls take price higher just to be reversed in the second part of the day. No major news came out and direction was influenced by technical factors.

Technical Outlook
On a four hour chart it’s clearly visible how the pair found resistance at the 50 period Exponential Moving Average and now it’s struggling to break 1.6060 support. Although the bears still have a lot of steam left, the downtrend is definitely weaker than before so it’s not very clear if this level can be broken and the answer will probably be offered by the British inflation numbers released today.

Fundamental Outlook
The British Consumer Price Index is released today at 8:30 am GMT. This is the main gauge of inflation and although the current value is not a reason for concern, if inflation will continue to drop, this will become a worrying issue. Today’s expected change is 1.4%, lower than last month’s 1.5%; if this forecast comes true we might see lower prices on the back of Pound weakness.

[GDMFX]

FOREX NEWS: VOLATILITY TONING DOWN AFTER YESTERDAY’S STORM

EUR/USD
Forex News: Yesterday’s price action offered us a huge surprise in the form of a 250 pips rise followed by a massive drop of more than 120 pips. The disappointing numbers posted by the US Retail Sales triggered US Dollar weakness and the initial climb, while the move south that followed is mainly attributed to technical reasons.

Technical Outlook
Under normal circumstances the massive climb could bring in more buyers but the long wick of the candle signifies rejection and makes the picture unclear. For the moment we recommend caution as the pair’s next direction is uncertain. Yesterday’s high at 1.2886 will act as the first resistance while the level at 1.2750 could provide some support but can also turn into resistance if price moves below it. In this latter case, 1.2660 will become first support.

Fundamental Outlook
At 2:00 pm GMT the Philly Fed Manufacturing Index is released and expected to decrease from last month’s 22.5 to 19.9. This is a leading indicator of economic health based on the opinions of about 250 manufacturers from the Philadelphia district and higher than expected numbers usually strengthen the US Dollar.


GBP/USD
British unemployment data was worse than anticipated but the main event of the day was without a doubt the US Retail Sales release which triggered tremendous volatility.

Technical Outlook
The pair touched 1.6060 resistance and immediately dropped, creating a major whipsaw. For the time being, the downtrend is still in place as we don’t have a higher high but a lower low was printed. For today we expect the pair to remain between 1.6060 resistance and 1.5900 support, but given the latest strong movement, a breakout is possible as well.

Fundamental Outlook
The United Kingdom didn’t schedule major news releases for the day so focus will be shifted towards the United States and the technical aspect.