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2014.03.24 Forex Technical Analysis: A potential weakening of the long-term uptrend

EUR/USD

Forex Technical Analysis: Last week the market finally came out of its indecision state and the bears took control of the pair on the back of a hawkish Fed Meeting. The US monetary stimulus program was cut by another 10 billion US Dollars and predictions were made about a potential Interest Rate increase, two factors which triggered US Dollar strength and a drop for the pair.

Technical Outlook
As we can see on the Daily chart above, the pair is in a long term uptrend and the latest drop looks like a retracement, not a reversal. However, a move below the important support located at 1.3710 would severely weaken the uptrend and would make 1.3480 the next target for the bears. Because the pair is trending up, a touch of 1.3710 may result in a bounce higher, especially if at the time, the Relative Strength Index will be in oversold territory.

Fundamental Outlook
The first major economic indicator of the week ahead is released Monday in the form of the German Manufacturing Purchasing Managers’ Index which acts as a leading indicator of economic health focused on the Manufacturing sector. The same indicator but for the US economy will also be released later in the day.

Tuesday’s main releases will be the German Ifo Business Climate and the US Consumer Confidence; these indicators are gauges of optimism among businesses and consumers respectively and usually have a hefty impact on the market. Wednesday the only important release is the US Durable Goods Orders which is a leading indicator of production because a higher number suggests that production will have to increase to fill those orders. The indicator also shows consumer optimism because durable goods require a larger investment and are often purchased when the consumer feels confident about the economic situation.

The last major release of the week is scheduled Friday and it’s the German Consumer Price Index, an indicator which usually has a great impact on the Euro and can strengthen it if higher than anticipated numbers are posted. A higher CPI indicates that inflation has increased and this may eventually determine the European Central Bank to adjust interest rates since the German economy represents the major part of the Euro Zone economy.

GBP/USD

The US Dollar strengthened against most of its counterparts as a result of the Fed decisions and the Pound was no exception. This strength seen throughout last week generated the much anticipated break of 1.6600 and as a result, almost the entire week was bearish.

Technical Outlook
Similar to the EUR/USD, this pair is in a long term uptrend so even if the bears are in control for now, moves north are a distinct possibility. If price starts to move up, the first resistance will be encountered at the recently broken level of 1.6600 and a move back above this level would indicate underlying bull strength. The first major support is located at 1.6250 and although we don’t anticipate a touch of this level to occur this week, a strong move towards it would show bear strength and a clear weakening of the uptrend. Keep an eye on the Relative Strength Index as it’s approaching oversold territory and can add bullish impulse if it will go below the 30 level and start to move up from there.

Fundamental Outlook
The Pound will be affected by two important releases this week: the Consumer Price Index and the Retail Sales. The first indicator comes out Tuesday and as mentioned before, it’s the main inflation gauge and is closely watched by the Bank of England because values outside a certain scale call for a rate adjustment. United Kingdom’s Retail Sales are released Thursday and usually have a high impact on the pair’s movement because the majority of consumer spending is represented by sales made at a retail level. Higher numbers are indicative of a thriving economy and potentially a stronger Pound. The pair’s movement throughout the week will be highly affected by the US economic indicators mentioned above.



Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

[pasfx]

2014.03.31 :Forex Technical Analysis: Euro Zone Interest Rate and U.S. Employment data – A tough week ahead

EUR/USD

Forex Technical Analysis: During last week, the US economy posted mostly better than anticipated data and the greenback strengthened as a result. The pair traveled south and touched main support which couldn’t be broken.

Technical Outlook
The support level located at 1.3710 was touched but the bears’ power wasn’t enough for a break; however, the subsequent bounce up doesn’t necessarily mean that higher prices will follow and we expect another encounter with support. If this new potential touch of 1.3710 will result in another failed break, it could mean that bulls are ready to take back control of the pair and take it above 1.3830. The Relative Strength Index on a Daily chart doesn’t indicate an extreme condition of the market and at the moment we are still in an uptrend (from a Daily chart perspective).

Fundamental Outlook
The first important event of the week is the release of the Euro Zone Consumer Price Index which shows fluctuations in inflation. A higher value is considered bullish for the Euro because the ECB may step in to adjust the Interest Rate if inflation becomes worrying. A speech of Fed Chairman Yellen is scheduled for the same day and can be a source of strong movement.

Tuesday the release of the US Manufacturing PMI is the only notable event while Wednesday, Automatic Data Processing Inc. will announce the US Employment Change numbers. This report is generated by a private company but it manages to offer hints about the Non Farm Payrolls which are released 2 days later and are regarded as the most important US employment indicator.

The most important event of the week is scheduled Thursday and it’s the ECB Press Conference which follows the Interest Rate decision. The Rate is not expected to change so Mario Draghi’s speech at the press conference will probably overshadow the rate decision release. He will also answer journalists’ questions and his attitude will most likely trigger sharp moves.

The last market-mover of the week comes out Friday in the form of the US Non Farm Employment Change (also known as Non Farm Payrolls or NFP) which is considered to be the main gauge of employment levels in the United States. Employment is closely related to consumer spending so a higher reading for the NFP usually strengthens the US Dollar.

GBP/USD

The bulls were in control of last week’s price action, taking the pair above the important level of 1.6600 on the back of a much better value of United Kingdom’s Retail Sales.

Technical Outlook
The pair is in a clear uptrend from a long term perspective and now bulls scored another victory by taking price back above 1.6600. The Relative Strength Index doesn’t show an overbought condition so price still has room to move to the upside, solidifying the control of the bulls; however, if price returns below 1.6600 early in the week, the uptrend line drawn from late 2013 will offer good support and a break of this line can trigger a continued move lower.

Fundamental Outlook
Monday Bank of England Governor Mark Carney will speak at a press conference in London and throughout the week, three Purchasing Managers’ Indexes will be released: the Manufacturing PMI, Construction PMI and Services PMI will come out Tuesday, Wednesday and Thursday respectively. These are leading indicators of economic health, each focused on a different sector and with the ability to strengthen the Pound if better numbers are posted. The important US events mentioned earlier will have a direct and strong impact on the pair as well.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

[pasfx]

2014.04.14 :Forex Technical Analysis: Easter approaches, bringing irregular movement

EUR/USD

Forex Technical Analysis: Last week the bulls scored a major victory and what appeared to be a break of support actually turned into a clear and strong bounce higher which took the pair close to the year’s high.

Technical Outlook
The trend line we mentioned last week, combined with the strength of 1.3710 support, generated an almost perfect bounce higher. The uptrend is intact and the bulls are in control of the market so we expect price to move higher, approaching or even breaking the year’s high located at 1.3965. Because price traveled a hefty distance in a single direction, we also expect bearish retracements before bulls can take price higher. The main levels to watch this week are 1.3965 as resistance and 1.3830 as support, followed by 1.3710; the trend line will also provide diagonal support if it’s touched again.

Fundamental Outlook
The week begins Monday with the release of an important US indicator in the form of Retail Sales. Being a major part of American consumer spending, sales made at a retail level can highly influence the pair’s direction and can strengthen the US Dollar if better numbers are posted. Tuesday the German ZEW Economic Sentiment is released, followed by the US Consumer Price Index which has inflationary implications and will probably be the day’s main event.

Wednesday it’s Euro Zone’s turn to release the Consumer Price Index. Its importance comes from the fact that ECB closely watches it when the Interest Rate decision is made, in an attempt to keep inflation between certain ranges (just below 2% is considered optimal).

The last event of the week is Thursday’s release of the Philly Fed Manufacturing Index which is a survey based on the opinions of about 250 manufacturers from the Philadelphia district. Friday most Banks will be closed in celebration of Good Friday so irregular movement and low liquidity will be present.

GBP/USD

The Pound strengthened significantly last week, on the back of positive economic data and this translated into a bullish rally above 1.6750 resistance.

Technical Outlook
The latest bullish move was stopped by the resistance located at 1.6820, a level which wasn’t visited by price since the year 2009. Now we can notice that a Double Top has formed; this chart pattern which is considered bearish is often seen at the end of an uptrend or before a major retracement. This makes us believe that price will slide towards 1.6600 but keep in mind that bulls are showing a lot of strength so moves north have a high probability of happening.

Fundamental Outlook
The British Consumer Price Index will be released Tuesday and will probably be the week’s main event for the Pound as the CPI is the prime measurement of an economy’s inflation. Higher values have the ability to strengthen the Pound, taking the pair higher. Wednesday the UK Claimant Count Change is announced, tracking changes in British unemployment and Friday Banks will be closed. Of course, the US events mentioned above will directly influence the pair throughout the week.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

[pasfx]

FOREX TECHNICAL ANALYSIS: A HISTORIC WEEK AHEAD – SCOTTISH INDEPENDENCE TAKES CENTER STAGE

EUR/USD

Forex Technical Analysis: The fundamental scene was slow during the week that just ended and as a result, price action lacked the volatility seen throughout the last period. Also, after 8 bearish weeks, we saw the first victory of the bulls, although it was a minor one.

Technical Outlook

The week ended with price being higher than it opened but the buyers couldn’t make substantial advances and the Relative Strength Index on a Weekly chart is still trading in oversold territory. Last week’s candle shows bullish pressure (long lower wick) and these facts make us believe that we will see a climb into 1.3000 or even 1.3100. To the downside, 1.2750 is a key level which acted as strong support in the past and is likely to stop bearish movement if it will be touched.

Fundamental Outlook

The German ZEW Economic Sentiment is the week’s first notable event. This survey, scheduled Tuesday, shows the opinions of about 275 German professional investors and analysts regarding the current economic situation and a 6-month outlook. The same day, the American Producer Price Index is announced, showing the change in prices charged by producers for their services and goods. The indicator has inflationary implications because a higher producer price will be eventually passed on to the consumer.

Wednesday the United States will take center stage as the FOMC will announce the Interest Rate, a Statement will be released and a Press Conference will take place. This cluster of events is likely to generate strong moves and high volatility so caution is recommended.

Thursday Fed Chair Janet Yellen will deliver a speech in Washington DC, via satellite but throughout the day, the world’s eyes will be focused on the Scottish Independence vote which will most likely generate irregular movement. Friday lacks major events and we are likely to have a slow, ranging day.

GBP/USD

Bearish momentum slowed down last week and the bulls finally managed to close the week higher than it begun. Price action was heavily influenced by the polls regarding the Scottish Independence, a matter that will be finally settled this week when the results of the referendum are released.

Technical Outlook

The pair is currently testing the important level at 1.6250. This level acted as both support and resistance in the past and it proved to be well respected by price but the latest gap generated a clear move below it. However, it will be hard for the pair to move past this level for the second time without some sort of rejection, stall or re-test (if broken). A clear move above will make 1.6460 the next bullish target while a bounce lower will open the door for a move into 1.5900 with the first barrier being last week’s low.

Fundamental Outlook

The main event for the Pound will be the Scottish Independence vote scheduled Thursday. If the Scottish people will decide in favor of a separation from the United Kingdom, the Pound will suffer and we are likely to see huge downside movement but no matter the result, volatility will be high and caution is recommended.
Other important events are the British CPI scheduled for release Tuesday, the MPC Meeting Minutes (Wednesday), which will show a breakdown of the members’ votes regarding the interest rate and the British Retail Sales scheduled Thursday. Overall, we expect a week with strong movement which will be heavily influenced by the Referendum; as always, the US events will have a direct impact on the pair’s direction.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: UNITED KINGDOM’S UNITY REMAINS INTACT

EUR/USD

Forex Technical Analysis: Last week the US Dollar was strengthened by a hawkish attitude of Fed Chair Yellen while the European Central Bank decided to set the target for their Long Term Refinancing Option (LTRO) at 82.6 Billion Euros, a fact which was perceived as bearish and triggered another selloff.

Technical Outlook

The week belonged to the bears as a new low was printed and the downtrend was resumed. The first level of importance to the downside is located at 1.2750 and it seems this level is the pair’s next destination now that 1.3000 was re-tested from below successfully. However, the Daily Relative Strength Index didn’t move clearly out of oversold territory for a long period and this increases the possibility of bullish moves but the pair is in a clear downtrend and we favor more downside movement overall.

Fundamental Outlook

Monday ECB President Mario Draghi will testify before the European Parliament’s Economic and Monetary Committee regarding monetary policy, an event which will be surrounded by volatility and possibly strong movement depending on his attitude and answers.

The French and German Flash Manufacturing PMIs will be Tuesday’s main events while Wednesday’s headlines are the German IFO Business Climate and the American New Home Sales. Traders’ attention will then shift to the US Durable Goods Orders (goods with a life expectancy of more than three years) which are released Thursday. At the same time the Core version (which excludes from calculation transportation items) is released. Better numbers for any of the versions may strengthen the US Dollar because they suggest future increased economic activity as producers will have to work harder to fill the extra orders.

Friday the United States will release the Final version of the Gross Domestic Product but this tends to have the lowest impact of the three versions (Advance, Preliminary and Final). However, since the GDP is an economy’s main performance gauge, the market will react to surprising numbers.

GBP/USD

The Scottish people voted “No” last week on a potential separation from the United Kingdom so the 307-year old union will remain intact for now. The result triggered Pound strength and was the week’s main British event.

Technical Outlook

The pair broke 1.6460 and came close to 1.6550 resistance on the back of Pound strength generated by the Scottish vote but soon after, the Dollar erased some of the gains. Overall we had a bullish week but if price will return below 1.6250, we are likely to see a move in close vicinity of 1.6060. To the upside, resistance still sits at 1.6460 followed by 1.6550 as these levels were just pierced and price failed to close above them.

Fundamental Outlook

The week ahead is characterized by a lackluster fundamental scene, a fact which makes us believe that we will see price slow down a bit, especially now that Scottish turmoil has settled. Tuesday the British Bankers’ Association will release the Mortgage Approvals numbers and Thursday the Confederation of British Industry will release a survey regarding Realized Sales. These are medium-impact indicators and we don’t expect them to create strong movement but the pair’s direction will be directly influenced by the US events mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: ALL EYES ON THE EUROPEAN CENTRAL BANK RATE AND AMERICAN EMPLOYMENT DATA
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week the US Dollar reached a 21-month high against the Euro, continuing to drag the pair lower on the back of strength generated by speculation that the Fed will move to raise interest rates before other Central Banks do.

Technical Outlook

An important support level was broken last week, showing the clear difference in strength between the Euro and the Dollar. The first support is now located at 1.2660, followed by 1.2280 but the Relative Strength Index on a Weekly chart shows a clear oversold condition and this increases the chance of bullish retracements. Keep in mind that the RSI is not a clear signal to go long as it can stay in oversold territory for a relatively long period and we may easily see another bearish week. To the upside, 1.2750 will probably turn into resistance.

Fundamental Outlook

We have an important week ahead, with the first major event being the release of the German Preliminary CPI scheduled Monday. As this is the main gauge of inflation and the German economy is a ####ar of the entire Euro Zone, we expect volatility at the time of the release. Euro Zone’s CPI Estimate will be released Tuesday and the same day a survey regarding American Consumer Confidence comes out.
Wednesday’s headline will be the ADP Non Farm Employment Change, a private report which tries to mimic the Government report issued 2 days later. Thursday will be the most important day of the week for the Euro as the ECB will announce the interest rate and Mario Draghi will hold a press conference discussing the rate decision and the economic situation of the Euro Zone. This is almost always a reason for strong and sometimes irregular movement so we recommend caution if trading during the Conference.
The US Dollar will be strongly influenced Friday by the Non Farm Employment report which is considered the most important data regarding the American job market and almost always generates big swings.

GBP/USD

The bears managed to take price lower last week, a behavior mostly generated by US Dollar strength, not by Pound weakness. An important level was touched and we expect some bullish reaction here.

Technical Outlook

During the previous weeks a bullish retracement was completed and it seems now the downtrend will continue. For that to happen, the current level at 1.6250 must be broken decisively; even if last week closed below it, the move cannot be considered a true break because price is still very close to the level and a retest was not seen. To the upside, the first barrier is located at 1.6460.

Fundamental Outlook

Three important indexes are released this week by the United Kingdom: the Manufacturing PMI comes out Wednesday, followed Thursday by the Construction PMI and finishing the week Friday with the Services PMI. For these indicators, purchasing managers from the manufacturing, construction and services sectors will be asked to give their opinions on the health of each sector. The surveys act as leading indicator of economic health and usually have a big impact on the Pound. As always, the pair will be directly influenced by the important US events mentioned earlier.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: PRICE ACTION SLOWS DOWN ON THE BACK OF A QUIET FUNDAMENTAL SCENE
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week’s price action made it clear that the European economy is in need of further stimulus while employment levels in the United States rose more than anticipated, adding fuel to an already strong US Dollar.

Technical Outlook

The current selloff is one of the longest seen in recent years as price is falling since July without even a slight retracement on the Weekly charts. It is true that some bullish retracements were seen on the daily charts, but nothing significant and this raises questions about where price will stop. The first support ahead is located at 1.2440 and the Relative Strength Index is deep in oversold territory so we might see some bull power here. However, last week we warned that another bearish week is possible even though the RSI is oversold and the market dropped; the same applies for this week but the fundamental scene lacks huge releases so we might be in for slower price action.

Fundamental Outlook

Monday there are no important American indicators and the Euro will only be affected by a medium-impact release: German Factory Orders. This is a leading indicator of production as more orders placed with manufacturers would suggest that activity will have to increase to fill these orders.
Tuesday we have another slow day in terms of economic releases for both the Euro and the Dollar but Wednesday we expect more action as the FOMC will release the Minutes of their latest Meeting. The document will offer insights into the reasons which influenced the members’ latest vote regarding interest rates and may also contain hints about a potential rate hike.
Thursday the G20 (Group of 20) meetings start and ECB President Mario Draghi will speak in Washington DC about the recent European situation. As always, his speeches are reasons for increased volatility and caution is recommended. Friday the G20 meetings will continue but other than that, no major economic or financial releases are scheduled.

GBP/USD

British economy showed signs of slowing down last week as economic data disappointed somewhat and the US Dollar continued to strengthen, resulting in a bearish week and broken support.

Technical Outlook

Now that 1.6060 is broken, the pair is heading towards the important zone around 1.5900 which acted as strong support in the past. For the entire 2014 the pair traded above 1.6000 and the move below this psychological support is an important victory for the bears but we must note the oversold condition of the Relative Strength Index which increases the chances of a bullish bounce if price will touch 1.5900. First major resistance sits at 1.6250 while immediate resistance is located at 1.6060.

Fundamental Outlook

British Manufacturing Production data will be released Tuesday and the same day a Gross Domestic Product estimate will be announced. Both indicators have the potential to strengthen the Pound if their value will be higher than forecast and vice versa for lower numbers. Thursday the Bank of England will announce their interest rate decision but no change is expected from the current 0.50% so we don’t expect a lot of volatility. Thursday and Friday the pair’s movement will be affected by the G20 Meetings.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: DOWNTREND LOSES STEAM. NEW LOWS STILL A DISTINCT POSSIBILITY
Posted → Weekly Commentary

EUR/USD

Forex Technical Analysis: Last week we had the first significant bullish move in a long time on the back of both technical and fundamental reasons. However, the second part of the week belonged to the bears as the US Dollar regained its strength.

Technical Outlook

Last week’s strong price action pierced through two resistance levels: 1.2660 and 1.2750 but the Weekly candle closed below these levels. At the moment we can see a long upper wick and this is a sign of rejection and underlying US Dollar strength. The Relative Strength Index is starting to move upwards, coming out of oversold territory, a thing which suggests that we might see more upside movement. The signals are pretty mixed but keep in mind we are in a downtrend and this increases the chances of a new low.

Fundamental Outlook

US banks will be closed Monday, celebrating Columbus Day and Europe doesn’t release any major indicators but the Eurogroup Meetings take place and this may be a reason of volatility. The German ZEW Economic Sentiment survey is Tuesday’s main event while Wednesday is a busier day: ECB President Mario Draghi will speak at a Conference organized by the European Central Bank and the US Retail Sales come out, together with the American Producer Price Index.
The Philly Fed Manufacturing Index is released Thursday while Friday’s main event will be a speech of Fed Chair Janet Yellen. The final event of the week is an American Consumer Sentiment survey released by the University of Michigan.

GBP/USD

Bank of England decided to keep the interest rate unchanged and the week was bullish but some downside action was seen during the last two days. The Pound is starting to gain against the greenback but a downtrend is still in place.

Technical Outlook

During the first part of the week price came close to the major resistance at 1.6250 but the bulls ran out of steam before this level could be seriously threatened. At the moment, downside movement is rejected by the support at 1.6060 and bullish divergence is present on a Daily chart (lower low on price – higher low on RSI). These factors increase the chances of a move into 1.6250 resistance but there is still a lot of US Dollar strength and a break of 1.6060 will make 1.5900 the next destination.

Fundamental Outlook

The British Consumer Price Index, which is the main inflation gauge, is released Tuesday, followed Wednesday by the Claimant Count Change which shows the change in the number of unemployed British people. These are the only notable events for the Pound this week but the pair’s direction will be influenced by the US releases as well.


Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: PRICE ACTION SHAPED BY EUROPEAN INFLATION AND AMERICAN MONETARY POLICY

EUR/USD

Forex Technical Analysis: The week that just ended was characterized by mostly bearish price action which was generated by technical reasons but also by a better than expected American CPI and speculation that ECB may implement more stimulus to spur economic growth.

Technical Outlook

Last week price started to move in line with the main trend, marking the end of a bullish retracement. The level at 1.2750 was broken to the downside and 1.2620 support was tested but managed to reject the first break attempt seen Thursday. However, this week we expect the downside pressure to prevail and the bears to break the mentioned support, taking price towards 1.2500. To the upside, first resistance is located at 1.2750 followed by the high created at 1.2886.

Fundamental Outlook

The European Banks stress test results made public Sunday will have an important impact on price action throughout the week but aside from that, the pair will be influenced by several other events. Monday the German IFO Business Climate survey, which uses a sample of 7,000 businesses in order to gauge optimism regarding current and future business conditions, will be released.

Tuesday the US Dollar will be affected by the US Durable Goods Orders and the Consumer Confidence survey (which acts as a leading indicator of consumer spending). Wednesday will probably be the most active day for the US Dollar as the US Federal Funds Rate is announced and the FOMC will release a statement outlining the economic and financial reasons which stood behind the decision.

Thursday two important indicators come out: the German Preliminary Consumer Price Index which has a hefty impact on overall European inflation and the US Advance Gross Domestic Product. Friday’s most notable event is the release of the European CPI Flash Estimate which is the main gauge of inflation in the Euro Zone and usually has a strong impact on the currency.

GBP/USD

The Pound had a mixed week as it was affected by a disappointing value of the British Retail Sales but some of the losses were erased Friday on the back of a value of the GDP which matched the forecast and was perceived as bullish.

Technical Outlook

The last weekly candle is a Doji (candle with long upper and lower wicks and a very small body), which suggests market indecision. Our bias is neutral from a technical perspective and we consider the fundamental aspect to be this week’s main price mover. The major levels to watch are 1.6250 as resistance and 1.5900 as support while minor resistance sits at 1.6180 and potential support at 1.6060.

Fundamental Outlook

The week ahead lacks major UK releases but the pair will be heavily influenced by the United States events. However, notable British events are the CBI Realized Sales released Monday and the Net Lending to Individuals, announced Wednesday.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: INTEREST RATES AND EMPLOYMENT DATA – INGREDIENTS FOR AN ACTION PACKED WEEK

EUR/USD

Forex Technical Analysis: The Fed ended their stimulus program last week and although this was anticipated, the event still generated huge US Dollar strength, putting the bears in control of the pair’s direction. An important role in last week’s descent was also played by the disappointing Euro Zone inflation numbers.

Technical Outlook

The pair remains under pressure and we expect the downside to prevail this week as well but we must note the oversold condition of the Relative Strength Index and the immediate support located at 1.2500. These factors could trigger moves to the upside, with 1.2620 being the first resistance. Even if the RSI is trading in oversold territory, it is angled downwards, suggesting that another push lower could be made this week; the next support is located at 1.2280 but a touch of this level will depend on the fundamental events scheduled this week.

Fundamental Outlook

The first notable event of the week is the Monday release of the American Manufacturing PMI, a survey of purchasing managers which acts as a leading indicator of economic health and optimism. Tuesday the US Trade Balance is released (difference between imported and exported goods) and Wednesday the first US employment data will come out in the form of the ADP Non Farm Employment Change which is a report released by a privately owned company.

The focus will shift towards the Euro Thursday for the Interest Rate decision and the ECB Press Conference. Although no change is expected for the Interest Rate, Mario Draghi’s comments and attitude will surely generate some volatility and strong movement.

The final event of the week is scheduled Friday and it’s the most important American employment data: the US Non Farm Employment Change (also known as Non Farm Payrolls). The report shows how many new jobs were created during the previous month and has a tremendous influence on the greenback as more jobs suggest that consumer spending may increase in the near future.

GBP/USD

The United Kingdom didn’t release major news last week but US Dollar strength generated by the Fed decision to end the QE program took the pair lower after a bounce at resistance.

Technical Outlook

Last week was bearish but the important support at 1.5900 may hinder further downside movement. Adding to this, the Relative Strength Index is hovering close to the 30 level on a Weekly chart, a thing which suggests oversold and thus increases the chances of bullish movement. Although there are some bullish signs, if 1.5900 support is broken, the move may extend into 1.5750 which is the next weekly support.

Fundamental Outlook

The British Manufacturing PMI is Monday’s main event for the Pound, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are leading indicators of economic health for their respective sectors thus higher numbers than anticipated will have a positive impact on the Pound. Thursday the Bank of England will announce the interest rate, with no change anticipated but any speculation about a possible change could greatly affect the pair so caution is recommended. Throughout the week price action will be directly affected by the US releases as well.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: OVERSOLD CONDITION CALLS FOR BULLISH MOVEMENT

EUR/USD

Forex Technical Analysis: The pair just finished another week controlled by the bears on the back of Euro weakness generated by Mario Draghi’s renewed commitment to use additional stimulus measures if the risk of deflation persists. On the other hand, the US Dollar was negatively affected by the NFP release and some of the pair’s losses were erased Friday.

Technical Outlook

During the week the pair broke 1.2500 support but Friday we saw bullish action and the weekly candle now has a long wick which suggests indecision. The Relative Strength Index on a weekly chart is below the 30 level, indicating an oversold condition but it is still pointing downwards and the pair is in a strong downtrend so we expect further bearish action. If the pair will remain below 1.2500, the first potential support is located at 1.2360 followed by 1.2280.

Fundamental Outlook

There are no important economic releases Monday and the same is true for Tuesday when US Banks are closed, celebrating Veterans Day. Euro Zone’s Industrial Production numbers are released Wednesday and Thursday the main event will be the American Unemployment Claims but this is often overlooked by market participants because it is an indicator which is released every week.

Friday a more important indicator is released by the United States: the Retail Sales. The importance of this indicator comes from the fact that sales made at a retail level account for a hefty part of the entire economic activity and a higher value suggests a thriving economy. The same day the Euro Zone Gross Domestic Product is announced, showing the overall performance of the European economy.

GBP/USD

The British economy posted worse than expected numbers overall and the Pound weakened against the US Dollar for another week. Price rebounded higher during the last day of the week on the back of US Dollar weakness.

Technical Outlook

The pair is headed towards the support at 1.5750 and we expect a bounce higher once and if price gets there. The Relative Strength Index is just crossing the 30 level downwards on a weekly chart but it has been hovering close to this level for a long while so a touch of support combined with an oversold condition of the indicator will probably push the pair higher.

Fundamental Outlook

Wednesday is the busiest day for the Pound as the Claimant Count Change is announced and Bank of England Governor Mark Carney will hold a press conference discussing the Inflation Report released the same day. This Report contains the Bank of England’s economic outlook and inflation forecast for the next 2 years and usually has a high market impact so caution is recommended. As always, the US events will have a direct impact on the pair’s movement throughout the week.


Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: OVEREXTENDED PRICES CALL FOR BULLISH RETRACEMENTS

EUR/USD
Forex Technical Analysis: Last week was characterized mainly by indecision and sideways price action and the pair traded inside a horizontal channel for most of the time. A breakout only occurred during the last day of the week, marking the end of the ranging period.

Technical Outlook
Although the pair broke resistance, the main trend is still bearish and we anticipate further downside movement after a bullish retracement is completed. An important area is located around 1.2620 as we have three types of resistance there: diagonal resistance represented by the bearish trend line seen on the chart above, dynamic resistance represented by the 50 day Exponential Moving Average and horizontal resistance represented by the level at 1.2620. If this zone can be broken to the upside, it will be an indication of bull strength and price is likely to travel towards 1.2750; otherwise, 1.2360 will be the week’s target.

Fundamental Outlook
Monday ECB President Mario Draghi will testify on Monetary Policy before the Committee on Economic and Monetary Affairs. This event is likely to generate a strong market response since all Draghi’s public speeches are important but this appearance holds extra importance due to the fact that monetary policy will be discussed. The German ZEW Economic Sentiment survey is released Tuesday, showing the level of optimism among German analysts and professional investors and the same day the American Producer Price Index comes out, tracking changes in prices charged by producers.
Wednesday’s main event is the release of the FOMC Meeting Minutes which will contain insights into the reasons that stood behind the latest Fed decision regarding monetary policy and interest rates. Thursday the focus remains on the United States for the announcement of their Consumer Price Index and the economic week finishes Friday with another Mario Draghi speech at the 24th European Banking Congress, in Frankfurt.

GBP/USD
The Pound weakened throughout the week that just ended as the British economy showed signs of slowing down and inflation expectations dropped. Support was broken and the pair printed another low of the year.

Technical Outlook
The downtrend is strong and further bearish price action is expected but the pair is overextended as shown by the oversold condition of the Relative Strength Index on a Weekly chart. Support sits at 1.5590 but we favor bullish retracements before the downside can prevail. The resistance at 1.5750 is the first bullish target, followed by 1.5900 and the Daily chart shows bullish divergence (price is printing lower lows while the RSI shows higher lows), supporting this upside bias.

Fundamental Outlook
The main gauge of British inflation is released Tuesday: the Consumer Price Index. Inflation is highly correlated with the Pound’s strength and weakness will likely be seen if the CPI value will be lower than anticipated. Another important event is the announcement of the Monetary Policy Committee’s votes on interest rate, scheduled Wednesday. This is a good opportunity to see if some of the members are changing their stance regarding a change of the interest rate and usually volatility is present only if one or more members changed their vote. Thursday the British Retail Sales come out and this is another reason for increased volatility and Pound fluctuation. As always, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: OVEREXTENDED PRICES CALL FOR BULLISH RETRACEMENTS

EUR/USD
Forex Technical Analysis: Last week was characterized mainly by indecision and sideways price action and the pair traded inside a horizontal channel for most of the time. A breakout only occurred during the last day of the week, marking the end of the ranging period.

Technical Outlook
Although the pair broke resistance, the main trend is still bearish and we anticipate further downside movement after a bullish retracement is completed. An important area is located around 1.2620 as we have three types of resistance there: diagonal resistance represented by the bearish trend line seen on the chart above, dynamic resistance represented by the 50 day Exponential Moving Average and horizontal resistance represented by the level at 1.2620. If this zone can be broken to the upside, it will be an indication of bull strength and price is likely to travel towards 1.2750; otherwise, 1.2360 will be the week’s target.

Fundamental Outlook
Monday ECB President Mario Draghi will testify on Monetary Policy before the Committee on Economic and Monetary Affairs. This event is likely to generate a strong market response since all Draghi’s public speeches are important but this appearance holds extra importance due to the fact that monetary policy will be discussed. The German ZEW Economic Sentiment survey is released Tuesday, showing the level of optimism among German analysts and professional investors and the same day the American Producer Price Index comes out, tracking changes in prices charged by producers.
Wednesday’s main event is the release of the FOMC Meeting Minutes which will contain insights into the reasons that stood behind the latest Fed decision regarding monetary policy and interest rates. Thursday the focus remains on the United States for the announcement of their Consumer Price Index and the economic week finishes Friday with another Mario Draghi speech at the 24th European Banking Congress, in Frankfurt.

GBP/USD
The Pound weakened throughout the week that just ended as the British economy showed signs of slowing down and inflation expectations dropped. Support was broken and the pair printed another low of the year.

Technical Outlook
The downtrend is strong and further bearish price action is expected but the pair is overextended as shown by the oversold condition of the Relative Strength Index on a Weekly chart. Support sits at 1.5590 but we favor bullish retracements before the downside can prevail. The resistance at 1.5750 is the first bullish target, followed by 1.5900 and the Daily chart shows bullish divergence (price is printing lower lows while the RSI shows higher lows), supporting this upside bias.

Fundamental Outlook
The main gauge of British inflation is released Tuesday: the Consumer Price Index. Inflation is highly correlated with the Pound’s strength and weakness will likely be seen if the CPI value will be lower than anticipated. Another important event is the announcement of the Monetary Policy Committee’s votes on interest rate, scheduled Wednesday. This is a good opportunity to see if some of the members are changing their stance regarding a change of the interest rate and usually volatility is present only if one or more members changed their vote. Thursday the British Retail Sales come out and this is another reason for increased volatility and Pound fluctuation. As always, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

 

[pasfx]

FOREX TECHNICAL ANALYSIS: CONCERNS OF LOW INFLATION WEAKEN THE EURO

EUR/USD

Forex Technical Analysis: Last week the pair had mixed up and down movement until the final trading day when Mario Draghi’s speech triggered substantial Euro weakness and a sharp drop. The ECB President commented that inflation expectations reached “excessively low” levels and the market impact was immediately seen.

Technical Outlook

For this week we expect further downside movement generated by Mario Draghi’s comments and by the overall negative sentiment surrounding the Euro. The first lower barrier is located at 1.2360, followed by 1.2280 but the Relative Strength Index is moving below its 30 level. This suggests that bullish retracements can occur but in strong trends the indicator can remain oversold or overbought for a long time without price reversing. If the pair starts to move north, the first resistance is located at 1.2620.

Fundamental Outlook

The first important event of the day is scheduled Monday: the German IFO Business Climate Survey which is derived from the opinions of about 7,000 businesses and acts as a leading indicator of economic health. The American Preliminary Gross Domestic Product will be released Tuesday and because this is the main gauge of an economy’s performance, better than expected numbers will most likely strengthen the US Dollar.

Wednesday we have the American Durable Goods Orders and Thursday US Banks will be closed, celebrating Thanksgiving Day. This will generate irregular volume and mixed volatility thus caution is highly recommended. Friday’s main event will be the European CPI release which is the main gauge of inflation. Considering how strong the Euro moves whenever inflation is discussed, this event will probably have high market impact.

GBP/USD

Although the British economy showed a higher CPI and better than expected Retail Sales, the pair just finished another bearish week. However, the downside momentum is fading away and the US Dollar didn’t make significant advances.

Technical Outlook

Last week ended lower than it begun but the weekly candle shows long wicks on both its upper and lower parts. This is a sign of indecision which combined with the oversold condition of the Relative Strength Index can trigger upside movement. If this is the case, the first resistance is located at 1.5750; if 1.5590 support can be broken, the door will be open for the next level, located at 1.5420.

Fundamental Outlook

Governor Mark Carney will speak Tuesday in London, at Parliament’s Treasury Select Committee hearing. This is expected to be an event with high market impact so use caution if trading during the speech. The other important event of the week is scheduled Wednesday in the form of the British Second Estimate Gross Domestic Product. Although this version is not as important as the Preliminary, it still has the potential to affect the Pound strongly. As always, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

 

[pasfx]

2014.12.09 :Forex Technical Analysis: Price action affected by the approaching of the Winter Holidays

EUR/USD

Forex Technical Analysis: The ECB Press Conference and the American Non Farm Payrolls were last week’s high impact events and each one of them strengthened their respective currency. Mario Draghi mentioned the ECB is not going to add further stimulus at their latest meeting and the US Dollar benefited from improved employment data.

Technical Outlook
The latest economic data favors the greenback and the pair’s bearish impulse is likely to continue throughout the week that has just begun. The support at 1.2280 rejected price the first time it was touched last week but now the bears are trying to break it again; if this attempt doesn’t result in a clear break, the pair is likely to enter a ranging period, considering the fact that the Winter Holidays are approaching and volume might drop. A break of 1.2280 would open the door for a move into the next major support located at 1.2040.

Fundamental Outlook
We have a light week ahead of us in terms of economic data but here are some of the events with potentially high impact: Monday the Eurogroup meetings take place, followed Tuesday by the ECOFIN meetings (attended by finance ministers from the EU member states). Wednesday no major events are scheduled but Thursday will be the busiest day of the week as the ECB will announce the total value of money they will create and use to provide loans to Eurozone banks. The US Retail Sales are released the same day and this can have a strong market impact as sales made at a retail level represent a hefty part of overall economic activity.

Friday the focus remains on the United States for the release of the American Producer Price Index, an indicator which shows changes in the price charged by producers for their goods and services, This indicator has inflationary implications because a higher price charged by producers will be eventually passed on to the consumer. The same day the University of Michigan will release their Consumer Sentiment survey; this is a leading indicator of consumer spending because a consumer that is confident in economic and financial conditions is likely to spend more.

GBP/USD

The pair ranged for the most part of last week but US employment numbers which came out much better than anticipated, strengthened the US Dollar and helped the bears to finish the week below support.

Technical Outlook
The support at 1.5590 was broken during the last day of last week but before we can consider this a true break and a resumption of the downtrend, we need to see a retest from below of the broken level. If it occurs, this retest will most likely be seen on the lower time frame charts like hourly or four hours. From a daily perspective the Relative Strength Index doesn’t show an extreme condition so bearish movement can continue. Bullish retracements may find support at 1.5750 while next support is located at 1.5420.

Fundamental Outlook
Similar to the Euro and US Dollar, the Pound has a slow news week ahead. Tuesday the British Manufacturing Production comes out, showing the change in the total value of output produced by manufacturers and the same day, the NIESR Gross Domestic Product Estimate is revealed. Although this is just an estimate, the impact can be a big one, considering that GDP is an economy’s main gauge of performance. As always, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

[pasfx]

2014.12.15 :Forex Technical Analysis: Last full economic week ahead of Christmas Holidays

EUR/USD

Forex Technical Analysis: Last week was mostly controlled by the bulls after the bears made another attempt to break 1.2280 support. The single bearish day was Thursday when the US Dollar strengthened on the back of a better than anticipated reading of the US Retail Sales.

Technical Outlook
Price is likely to continue on an upward path until the 50 period Exponential Moving Average on a daily chart is touched. We expect some bearish movement to happen there as the moving average will probably offer resistance. A move past this line will make 1.2600 the immediate target for the pair, while a bounce lower will take price back into 1.2360 support. The winter holidays are approaching and volume is likely to drop, making price action irregular and harder to anticipate.

Fundamental Outlook
The French and German Flash Manufacturing PMIs are released Tuesday, showing the opinions of purchasing managers from the manufacturing sector regarding business and economic conditions. The same day the German ZEW Economic Sentiment Survey is released; the indicator is derived from the opinions of German professional investors and analysts regarding economic health and usually has a high impact on the Euro.

Wednesday is the week’s most important day for the US Dollar as the US Consumer Price Index is released, followed later in the day by the Fed Interest Rate which will be accompanied by a FOMC Statement and a FOMC Press Conference. Almost always this cluster of events creates strong moves so caution is recommended.

The German IFO Business Climate, another report focused on economic conditions, is Thursday’s main event while Friday will be a slow day in terms of economic releases

GBP/USD

Similar to the Euro, the Pound gained against the greenback and the pair had a bullish week following a failed attempt to break support. The week was lackluster in terms of economic releases for the Pound.

Technical Outlook
The support at 1.5590 was tested several times but the bears failed to break it decisively. This shows that we are dealing with a very strong level which may push price higher for a stronger retracement. However, the resistance at 1.5750 is also strong and it can push price lower, especially considering the fact that we are still in a downtrend. If price moves above resistance without any more tests or bounces, it will probably continue upwards for an encounter with the 50 period Exponential Moving Average.

Fundamental Outlook
Bank of England Governor Mark Carney is scheduled to speak Tuesday during a Press Conference focused on the BoE Stability Report released earlier the same day. The conference will be followed by the release of the British Consumer Price Index which is the main gauge of inflation and holds a great importance to short and medium term price action.

Wednesday the result of the Monetary Policy Committee votes is made public, showing if the members’ stance regarding the interest rate has changed. The Claimant Count Change is released the same day, showing how many people applied for social help related to unemployment. The last important event of the week is the British Retail Sales, scheduled Thursday and as always, the US events will have a strong and direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

[pasfx]

Forex Technical Analysis: Christmas Week is here, bringing irregular volatility

EUR/USD

Forex Technical Analysis: The US Dollar headed for gains last week as Fed Chair Janet Yellen hinted that next year a rate hike is likely to happen. Support levels were broken after a bounce off of the daily 50 period Exponential Moving Average.

Technical Outlook

Price action is likely to become irregular due to the Christmas Holiday, but the important levels to watch this week are 1.2280 and 1.2360. These levels represented support and the recent break could turn them into resistance if price will climb to touch them again. Price is in a clear downtrend, trading below the 50 period Exponential Moving Average and below resistance, with the first major support now sitting at 1.2040 (visible on a weekly chart); however, we don’t believe this level will be touched this week.

Fundamental Outlook

As expected, the week ahead will be governed by the Christmas Holiday and will lack major economic activity. Tuesday is the busiest day of the week, with the focus being on the American Durable Goods Orders (goods with a life expectancy of more than three years) and the New Home Sales. Wednesday no major announcements are made while Thursday and Friday most banks around the world will be closed in celebration of Christmas.

GBP/USD

Last week British CPI disappointed while Retail Sales surged and this created mixed price action, with the pair confined between support and resistance.

Technical Outlook

During this month price moved two times below the support at 1.5590 and both times the bulls quickly stepped in, taking the pair above the level. This shows that we are dealing with strong support which may push the pair higher, into the first resistance which is located at 1.5750. On the other hand, a break of 1.5590 followed by a successful re-test will most likely trigger a move towards 1.5420 which is the next support.

Fundamental Outlook

Tuesday the British Bankers’ Association will announce the Mortgage Approvals which is a leading indicator of demand for the house market and could strengthen the Pound if the value will exceed analysts’ expectations. Other than this, the week is calm and no major indicators are released; Thursday and Friday UK Banks will be closed, celebrating Christmas.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

 

[pasfx]

2014.12.29 :Forex News: Forex Technical Analysis: The week between years comes with low volume and scarce economic releases

EUR/USD

Forex Technical Analysis: Last week price action was heavily influenced by the Christmas Holiday and the market was paused during the 25th of December. All week price suffered from low volume and irregular movement.

Technical Outlook
The irregular price action seen last week is likely to continue this week as the New Year will be the main concern of most traders around the world. The pair is in a downtrend, trading below the 50 days Exponential Moving Average and below the resistance at 1.2280. The first support is located at 1.2040 but probably we won’t see a break this week as the market will be thin for most of the period. Our bias is neutral considering that this week the year changes and all pairs will be affected.

Fundamental Outlook
As expected we have very few economic releases this week; here are the most important: Tuesday the US Consumer Confidence survey is released, showing the opinion of about 5,000 American households about current economic conditions, but also their expectations for the near future.

Wednesday German Banks will be closed in observance of the New Year’s Eve and the US Unemployment Claims will be the day’s single notable event. Thursday is the first day of 2015 and the market will be closed, price will come to a stop and no economic indicators will be released, while Friday is another slow day with the only important event being the release of the US Manufacturing Purchasing Managers’ Index.

GBP/USD

Last week was mostly controlled by the bears on the back of disappointing British economic data but soon Christmas made its presence known, volume dropped and the pair came to a stop Thursday, while Friday’s trading session lacked strong movement.

Technical Outlook
Some movement is likely to be seen throughout the week but we don’t expect any substantial advances as the New Year will take center stage and volume will probably remain low. The important levels to watch this week are located at 1.5590 (resistance) 1.5485 (support), while price behavior at the current level (1.5540) will probably determine the next direction. Our bias is neutral for this pair as well, and we expect to see irregular movement; keep in mind that Thursday the market will be closed.

Fundamental Outlook
The only noteworthy British release is the Manufacturing Purchasing Managers’ Index, scheduled Friday. The indicator is a survey of purchasing managers focused on the business conditions in the manufacturing sector and higher numbers are beneficial for the Pound.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​

 

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2015.01.12 :Forex News: Forex Technical Analysis: Bears still in control but bullish pressure increases

EUR/USD

Forex Technical Analysis: Last week belonged to the bears on the back of lower inflation numbers posted by the European economy and a hawkish Fed that hinted towards a potential rate hike during the first part of the year.

Technical Outlook

The pair moved below 1.1875, creating the fourth consecutive bearish week. Both the Relative Strength Index and the Stochastic are oversold on a Daily chart and are starting to move upwards, while on a Weekly chart there is still no sign of bullish movement of the two indicators. The most important levels for this week’s price action are 1.1875 and 1.2040 to the upside and the low at 1.1750 followed by 1.1640 to the downside; the picture remains bearish, although retracements are still due.

Fundamental Outlook

Monday and Tuesday are calm days for the Euro and US Dollar as no major indicators are released. Wednesday the U.S. Retail Sales numbers come out and the Dollar is likely to be strongly affected as the indicator is the main gauge of consumer spending which in turn is a vital part of the economy.

Thursday the American Producer Price Index is released; this indicator shows changes in the price charged by producers for their goods and has inflationary implications. The same day the Philly Fed Manufacturing Index comes out; this is a leading indicator of economic health derived from the opinions of about 250 manufacturers from the Philadelphia district. Friday’s main event is the release of the American Consumer Price Index which is the main gauge of inflation and usually has a hefty impact on the Dollar. The same day, the University of Michigan will release a Preliminary version of their Consumer Sentiment survey.

GBP/USD

The pair remained in a strong downtrend as price moved below support and the bears maintained their control for the fourth week in a row. The British economy posted worse than expected numbers and this contributed to the drop.

Technical Outlook

During the week ahead we expect a move into the recently broken level at 1.5260. A bounce there would make 1.5035 the immediate target, followed by the psychological and technical support at 1.5000. A break of 1.5260 would open the door for a bullish retracement close to the 50 period Exponential Moving Average.

Fundamental Outlook

This week lacks major British announcements and the only important indicator comes out Tuesday in the form of the Consumer Price Index which is the main gauge of inflation. As always, the pair will be directly influenced by the U.S. data released throughout the week.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

 

[pasfx]

2014.01.19 :Forex Technical Analysis: ECB to decide the next direction of the shared currency

EUR/USD

Forex Technical Analysis: Last week the markets were shaken by Swiss National Bank’s sudden and unexpected decision to remove the EUR/CHF floor which caped the pair at 1.20. As a result the Swiss Franc appreciated tremendously against its peers and the market showed unprecedented volatility.

Technical Outlook
On Daily and Weekly charts, both the Relative Strength Index and the Stochastic are indicating an oversold condition of the pair, but considering the latest developments, the technical side is less important than the fundamental. The next potential support is located at 1.1380 but the pair last visited this level in 2003 so the importance of this level cannot be assessed. As for resistance, the first level of interest is 1.1640, followed by 1.1875. The environment remains strongly bearish, with retracements expected.

Fundamental Outlook
Monday U.S. Banks will be closed in observance of Martin Luther King Day and no major indicators are scheduled. Tuesday’s main event is the release of the German ZEW Economic Sentiment, a survey derived from the opinions of about 275 German analysts and investors regarding their 6-month economic outlook.

Wednesday is a slow day as far as U.S. and European economic releases are concerned but Thursday will probably be the week’s most volatile day due to the ECB Meeting. The interest rate decision will be announced and more importantly, the ECB will announce whether they will start a government-bond buying program or not. The market already expects the ECB to introduce such a stimulus and if this proves wrong, the reaction will be mixed.

Friday the French and German Manufacturing PMIs are released, offering insights into the state of the manufacturing sectors in these countries.

GBP/USD

The Pound – US Dollar pair wasn’t affected strongly by Swiss National Bank’s decision and for the entire week, price action was mixed, without a lot of directional movement.

Technical Outlook
The pair is caped to the upside by 1.5260 resistance and to the downside by 1.5035 support. This week we expect a breakout which could take price into the next support located at 1.4830 or into the resistance offered by the 50 period Exponential Moving Average. Both the Stochastic and the Relative Strength Index are hovering near their oversold levels, a fact which could help the bulls if they attempt to break resistance.

Fundamental Outlook
Wednesday the British Claimant Count Change is released, showing how many people applied for unemployment related welfare. A higher number indicates increased levels of unemployment and is usually detrimental for the currency. The same day the votes on the latest BoE interest rate decision are made public but this event usually creates strong movement only if one or more MPC members have changed their stances regarding the need for a rate adjustment. The final British event of the week is the release of the Retail Sales scheduled Friday. Since sales made at a retail level represent a big part of overall economic activity, higher numbers are viewed as beneficial for the currency.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Source of article from the best forex broker.

Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com​