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Thread: GDMFX - Weekly Commentary

  1. #181
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    dynamo - First and lasp post every thread AXITrader aff
    WEEKLY ANALYSIS: US DOLLAR FALTERS AGAIN, NON-FARM PAYROLLS EYED FOR NEXT BIG MOVE


    EUR/USD


    Weekly Analysis: Last week the pair reached the highest level since January 2015 on the back of a hawkish speech delivered by ECB President Mario Draghi at the Jackson Hole Symposium. Key resistance was broken and now the uptrend is resumed.



    Technical Outlook

    After a choppy start of the week, price finally broke out and moved above 1.1875, fueled by Draghiís speech. Also, the market expected Fed Chair Yellen to be more hawkish but her speech at the Jackson Hole Symposium was disappointing and did not help the US Dollar.

    Given the current situation we expect to see a move into the key psychological level at 1.2000, followed possibly by 1.2040, which is a level that last acted as support in 2012 (thatís a long time ago so we donít know if the pair will react to it). A re-test of the recently broken level (1.1875) is very possible but the overall picture is clearly bullish.

    Fundamental Outlook

    The first notable release of the week is the CB Consumer Confidence, scheduled Tuesday. This is a survey of about 5,000 U.S. households that asks respondents to rate the overall level of economic conditions, both current and future. Consumer confidence is an early indicator of consumer spending so a higher number usually strengthens the US Dollar.

    Wednesday we take a look at German inflation with the release of the Preliminary German CPI and later in the day the greenback will be affected by the ADP Non-Farm Employment Change and the U.S. Preliminary Gross Domestic Product.

    Thursday the European Flash Estimate Consumer Price Index is released, showing changes in the price that consumers pay for the goods and services they purchase. This is the main gauge of inflation but its importance is dimmed by the fact that other EU member states have released inflation data earlier.

    Friday the U.S. Non-Farm Payrolls come out, showing changes in the number of employed people, excluding the farming industry. This is widely considered the most important jobs data in the United States and its impact is always very high so caution is advised.


    GBP/USD

    The US Dollar had a great start of the week against the Pound, moving the pair into the support at 1.2770 but Yellenís speech triggered a wave of US Dollar selling across the board and the pair climbed above 1.2850.



    Technical Outlook

    The bounce at 1.2770 support and the break of 1.2850 makes the short term bias bullish, anticipating a move into the 50 days Exponential Moving Average and the resistance at 1.2950. The way price behaves in that zone will decide the next direction: a bullish break will make 1.3050 the target and a bounce will probably take the pair back below 1.2850. The oscillators are moving up, coming from the lower levels and this increases the chance of a move into the 50 EMA.

    Fundamental Outlook

    Monday British banks will be closed due to Summer Bank Holiday and no economic data will be released. This will most likely affect volatility and price action.

    Wednesday the Net Lending to Individuals will show changes in the total credit issued to individuals but the indicator is not known to have a high impact. A more important indicator is released Friday: the Manufacturing PMI. This is a survey of purchasing managers that gauges their opinion regarding the state of the manufacturing sector and acts as a leading indicator of economic health. As always, the U.S. data released throughout the week will have a direct impact on the pairís movement.

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  3. #182
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    WEEKLY ANALYSIS: ECB INTEREST RATE AND PRESS CONFERENCE. SHOULD WE EXPECT A SURPRISE FROM DRAGHI?


    EUR/USD


    Weekly Analysis: After breaking above 1.2000 for the first time since 2015, the bulls failed to continue upside momentum in the latter part of last week and now the pair is trading close to support, ending the week with small losses.



    Technical Outlook

    The pair is still in a strong uptrend but it seems like it is about to enter a bearish phase. This is signaled by the very long wicks of the last few candles but also by the bearish divergence seen on the Daily chart above: price is making higher highs but the Relative Strength Index is only making lower highs.

    This makes us anticipate a drop into the confluence zone created by the 50 days Exponential Moving Average and the support near 1.1700. On the other hand, a bullish bounce from the current support level (1.1875) will make 1.2000 the first target, followed by last weekís high at 1.2070.

    Fundamental Outlook

    Monday U.S. banks will be closed, celebrating Labor Day and the Euro will not be affected by important economic data either, so we expect a rather slow and possibly ranging session. The only notable data released Tuesday will be the U.S. Factory Orders (shows changes in the value of orders placed with manufacturers) and Wednesday things remains slow, with the ISM Non-Manufacturing PMI being the only notable release.

    Action picks up Thursday when the European Central Bank will announce the interest rate (no change expected Ė currently 0.00%) and ECB President Mario Draghi will hold the usual press conference, which is known to create high volatility almost always. His attitude and answers will be carefully scrutinized by market participants but sometimes are misinterpreted and thatís when sudden changes of direction occur.

    Friday will be another day without major economic releases, so the technical aspect will prevail.


    GBP/USD

    The pair had a very choppy week, climbing multiple times above 1.2950 resistance and then dropping below the 50 days Exponential Moving Average. The balance of power shifted several times but the week ended close to where it started.



    Technical Outlook

    Last weekís price action shows indecision from both sides and offers very little clues about the next direction. Usually, after a period of indecision, price shoots strongly in one direction or the other so we can expect a breakout to be followed by an extended move in that direction. To the upside 1.3050 is the first target and to the downside 1.2770 is key support. Once price reaches one of these targets, we may see pullbacks.

    Fundamental Outlook

    The first notable release of the week is the British Construction PMI scheduled Monday and followed Tuesday by the Services PMI. Both are surveys of purchasing managers from the respective sectors that act as indicators of optimism, with a medium impact on the Pound.

    The last release of the week will be the Manufacturing Production, scheduled Friday. The indicator shows changes in the total value of goods produced by manufacturers and usually strengthens the Pound if it posts higher numbers.

  4. #183
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    WEEKLY ANALYSIS: US DOLLAR GOING DOWNHILL. LOOKING TO INFLATION AND RETAIL SALES DATA FOR A BOOST


    EUR/USD


    Weekly Analysis: The Euro continued to strengthen last week, fueled by a positive ECB outlook regarding economic expansion. The pair breached the previous high and created a new one at 1.2092 but retraced lower in the last day of the week.



    Technical Outlook

    Price is in a strong uptrend but at the same time, it looks overextended. This suggests that we will likely see a pullback or a consolidation period before the pair can make significant new advances. The first resistance is located at 1.2070, followed by 1.2100 but currently rejection is present (long upper wick of the last candle, RSI shows bearish divergence) so we expect to see a ranging phase, with price spending some time between 1.2000 and 1.1875.

    Fundamental Outlook

    The first part of the week will be very slow, without notable releases on either side of the Atlantic. The U.S. Producer Price Index (PPI) will be the first major data release of the week, scheduled Wednesday and action picks up even more Thursday with the release of the U.S. Consumer Price Index, which is the main gauge of inflation, showing changes in the price paid by consumers for the goods and services they purchase.

    Friday the U.S. Retail Sales numbers come out, showing changes in the total value of goods sold through retail outlets and later in the day the University of Michigan will release their Consumer Sentiment, which is a survey that gauges consumersí opinions about economic conditions. Higher numbers for any of the indicators released throughout the week have the potential to strengthen the greenback.


    GBP/USD

    The US Dollar suffered heavy selling last week and was surrounded by an overall negative sentiment, so it weakened against most of its counterparts. The Pound capitalized on this weakness and made substantial advances, taking the pair 300 pips higher.



    Technical Outlook

    Early in the week we will probably see a touch of the resistance at 1.3250 but soon after, we expect a pullback. The pair has traveled a long distance in a short period of time and this type of price action is usually followed by a retracement. Also, the Relative Strength Index and Stochastic are both overbought, thus increasing the probability of a move lower. If 1.3250 is surpassed, the next destination will be the long term resistance at 1.3450 but after said pullback will occur.

    Fundamental Outlook

    Tuesday the British Consumer Price Index will offer information about the state of inflation in the United Kingdom and Wednesday the Average Earnings Index will show changes in the price that employers pay for work. Both these indicators usually have a high impact and higher numbers are beneficial for the Pound.

    Thursday will be the busiest day as the Bank of England will announce the interest rate (currently 0.25%, no change expected) and will release a Monetary Policy Summary, outlining the reasons that determined the rate vote. As always, the U.S. data released throughout the week will have a direct impact on the pairís movement.

  5. #184
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    WEEKLY ANALYSIS: POUND BOOSTED BY RATE HIKE SPECULATION, US DOLLAR ON THE ROPES AHEAD OF FED MEETING


    EUR/USD


    Weekly Analysis: After failing to stay above 1.2070, the EUR/USD dropped and breached 1.1875 support, coming close to the 50 days Exponential Moving Average. The economic scene was calm for the Euro and the data for the US Dollar was mixed, with a better than expected CPI but disappointing Retail Sales.



    Technical Outlook

    It looks like the pair completed a retracement and is now bouncing at 1.1875 support, aiming for 1.2000 as immediate target. The uptrend is still in place but it has clearly lost some steam, so if the pair doesnít break 1.2070 decisively this week, we will probably see a drop through 1.1875 and into the 50 days Exponential Moving Average. An important role will be played by the FOMC Meeting scheduled this week and Fed Chairís press conference that follows.

    Fundamental Outlook

    The first release of the week is the Final version of the European Consumer Price Index, scheduled Monday. The CPI is the main gauge of inflation but the final version is the last in the series, so its impact is often muted by the earlier data.

    Tuesday the German ZEW Economic Sentiment will show the opinions of about 300 German investors and professional analysts about a 6-month outlook for the economy and on the US Dollar side the Building Permits will be the most notable release.

    Wednesday will be the most important day of the week as the FOMC will announce the interest rate, the economic projections and will release a rate Statement outlining the reasons that determined the rate decision. Half an hour later, Fed Chair Janet Yellen will hold a press conference discussing the rate outcome and answering journalistsí questions. This is when the US Dollar usually shows huge volatility, so caution is recommended.

    Thursdayís only notable event is the U.S. Unemployment Claims and the economic week ends Friday with the German Manufacturing and Services PMIs, which are surveys of optimism among purchasing managers from the respective sectors.


    GBP/USD

    The Pound had a tremendous week, climbing more than 450 pips on the back of hopes that a rate hike will come sooner than expected. Inflation in the United Kingdom has increased and this boosted expectations that the Bank of England might hike until the end of the year.



    Technical Outlook

    Itís clear that the Pound is enjoying a positive market sentiment, boosted by rate hike speculation. This is the highest point reached since the Brexit referendum but usually a move like the one seen last week will retrace before continuing higher. The first potential support is located at 1.3450 but this seems like a too distant target, given the Pound strength seen lately. However, we expect to see bearish moves (pullbacks) or a small period of consolidation before a stronger move can take place.

    Fundamental Outlook

    The Pound has a very slow economic week ahead, with the only major release being the British Retail Sales scheduled Wednesday. The indicator shows changes in the total value of sales made at retail level and usually has a high impact on the currency because retail sales represent a major part of consumer spending, which in turn accounts for a big part of overall economic activity.

  6. #185
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    FOREX NEWS: ECB PRESIDENT DRAGHI TESTIFIES. BEWARE OF SUDDEN VOLATILITY SPIKES


    EUR/USD


    Forex News: Friday the pair moved higher on the back of better than expected numbers for the European Purchasing Managersí Indexes but the key resistance at 1.2000 pushed the pair lower and erased all gains, so the session ended close to where it started.



    Technical Outlook

    Fridayís price action doesnít offer a lot of clues for the next move and overall the pair remains in a range, without clear direction. Strong resistance is located at 1.2000 and to the downside, if the pair can move below the 50 EMA, it might drop into 1.1900. Todayís price action will probably be affected by the German Federal Elections that took place Sunday, so the technical side will be secondary.

    Fundamental Outlook

    Today at 1:00 pm GMT, ECB President Mario Draghi will testify in Brussels before the European Parliament Economic and Monetary Affairs Committee, about monetary developments and the economy. This has the potential to be a high-impact event, so caution is recommended.

    The dayís other notable event is the release of the German IFO Business Climate, which is a survey derived from the opinions of about 7,000 businesses, focused on economic optimism and outlook for the next 6-months. The time of the release is 8:00 am GMT and the expected value is 116.0, a small increase from the previous 115.9.


    GBP/USD

    British Prime Minister May delivered a speech Friday in Florence, mentioning that the U.K. will be leaving the single market and the customs union. This was the main reasons for the weakening of the Pound but support wasnít breached.



    Technical Outlook

    The last 4-hour candle shows a long wick in its lower part, which is a sign of rejection. Also, price is bouncing off of the confluence zone created by the 50 period Exponential Moving Average and the horizontal support at 1.3450. Strictly from a technical point of view, all this suggests that price will probably bounce higher but the fundamental side (represented by Prime Minster Mayís stance) indicates that lower prices will follow. Look for a break of the confluence zone because if it occurs, more sellers will probably join.

    Fundamental Outlook

    The United Kingdom didnít schedule any important releases for today, thus the pairís direction will be mainly decided by the technical aspect.

  7. #186
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    WEEKLY ANALYSIS: US DOLLAR ON SHAKY GROUND AHEAD OF NON-FARM PAYROLLS

    EUR/USD


    Weekly Analysis: In the early part of last weekís trading session the US Dollar made substantial advances and reached the support at 1.1713. However, some of the greenbackís gains were erased and the pair climbed back into the 50 days Exponential Moving Average.



    Technical Outlook

    The pair is trapped between 1.1713 support and the 50 days Exponential Moving Average and this opens up two possible scenarios: if price moves above the 50 EMA, it will probably break through 1.1875 and head closer to 1.2000, trying to resume the uptrend. On the other hand, if the pair bounces lower at the 50 EMA, this will prove that the momentum is shifting towards the short side and will probably generate a break of 1.1713 Ė 1.1700 and a move closer to 1.1600. From a long term perspective the pair is still in an uptrend.

    Fundamental Outlook

    The first event of the week will be the release of the U.S. Manufacturing PMI, scheduled Monday. This is a survey that tries to gauge the opinions of purchasing managers regarding economic and business conditions in the Manufacturing sector and acts as a leading indicator of optimism, with a medium impact in the greenback.

    Tuesday German banks will be closed in celebration of German Unity Day and we donít have anything major on the US Dollar side either. Wednesday action picks up with a first look at U.S. jobs situation: the ADP Non-Farm Employment Change. The report tracks changes in the number of employed people, excluding Government and the farming industry and tries to mimic the NFP which comes out 2 days later.

    Thursday is a slow economic day for both the Euro and the US Dollar and the week ends Friday with the most important U.S. employment data: the Non-Farm Payrolls (NFP). The report shows changes in the number of employed people during the previous month, excluding the farming industry and is known to be a very strong market mover. Higher numbers usually strengthen the US Dollar because higher employment usually leads to increased consumer spending.

    GBP/USD

    US Dollar strength took the pair below 1.3450 support but momentum soon faded and price remained in a tight range for the rest of the week.



    Technical Outlook

    For the last 3 days the pair has been bouncing between 1.3350 support and 1.3450 resistance and this type of behaviour usually means that a strong breakout is in the making. From a longer term perspective the pair is in an uptrend and is trading above the 50 days Exponential Moving Average, so we favour a move up, through 1.3450. If the support at 1.3350 is broken, then the pair will likely move into the 50 days EMA and into the support at 1.3250.

    Fundamental Outlook

    The first release of the week is the British Manufacturing PMI, scheduled Monday, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. These are surveys that act as leading indicators of economic health, derived from the opinions of purchasing managers from the respective sectors but are not known to be strong market movers. However, higher numbers usually strengthen the Pound.


  8. #187
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    WEEKLY ANALYSIS: UNCERTAINTY IN THE U.K. TRIGGERS MASSIVE MOVES TO THE SOUTH. WHATíS NEXT FOR THE POUND?


    EUR/USD


    Weekly Analysis: Last week the pair remained in a relatively tight range, moving slightly below 1.1700 support but failing to break it. The Non-Farm Payrolls showed a disappointing figure, mostly because the storms that hit the U.S. had a bigger impact on the jobs market than anticipated.



    Technical Outlook

    As long as the bears cannot break the support at 1.1700 and price is trading below the 50 days Exponential Moving Average, the pair is in a range, without momentum to either side. This week we will most likely see a move outside one the two barriers and that will probably decide the next medium term direction. Our bias is mostly neutral until such a break occurs and after the break, the first downside barrier will become 1.1600, while to the upside 1.1875 is the first resistance.

    Fundamental Outlook

    The first two days of the week ahead lack major events on the economic calendar, so price action will be mostly decided by the technical aspect. Wednesday the FOMC will release the Minutes of their latest Meeting, a document which contains details about the reasons that influenced the latest rate decision but more importantly, it can contain hints about future increases.

    Thursday ECB President Draghi will speak in a panel discussion at the Peterson Institute for International Economics and Friday will probably be the busiest day, starting with the U.S. Consumer Price Index and the U.S. Retail Sales. Inflation and sales made at retail levels are some of the main price drivers, so higher numbers for any of those can strengthen the respective currency.

    The final release of the week will be the University of Michigan Consumer Sentiment, which is a survey that acts as a leading indicator of consumer spending.


    GBP/USD

    The pair ended the worst week in a year, dropping more than 350 pips. The move was generated by political uncertainty in the UK (rumors that Prime Minister May will be asked to step down) and worse than expected British economic data.



    Technical Outlook

    The current bias is definitely bearish, with a strong Dollar and a Pound affected by Brexit fears and political unease. We expect to see further downside movement but a 350 pips move is likely to generate some sort of retracement to the upside, possibly from the current support at 1.3050. If this is the case, we donít expect price to climb above the 50 days EMA and if that mark is reached, the pair will likely resume downside movement.

    Fundamental Outlook

    The first notable indicator for the Pound will be released Tuesday in the form of the British Manufacturing Production, which is a measure of the output generated by manufacturers. The same day the National Institute of Economic and Social Research (NIESR) will release their GDP Estimate; however, this is often overlooked by market participants mostly because it is just an estimate and is not released by the Government. As always, the U.S. economic data will have a direct impact on the pairís performance.

  9. #188
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    WEEKLY ANALYSIS: POUND REMAINS JITTERY AS BREXIT UNCERTAINTY CONTINUES


    EUR/USD


    Weekly Analysis: The pair climbed above the 50 days Exponential Moving Average last week, mostly due to concerns regarding inflation in the United States. However, the resistance at 1.1875 couldnít be broken and now some rejection is present.



    Technical Outlook

    After breaking the 50 days EMA, price hit the resistance at 1.1875 and dropped slightly lower but the week ended above the Moving Average. As long as the pair is trading between 1.1875 resistance and 1.1700 support the picture is unclear but early this week we expect to see a break of resistance or immediate support (50 EMA) and the direction of the break will decide the next move. A break of 1.1875 will open the door for 1.2000, while a break of the 50 EMA will probably take the pair into the support at 1.1700.

    Fundamental Outlook

    Monday we donít have any important indicators, so the first notable release will be German ZEW Economic Sentiment, scheduled Tuesday. However, this survey has a medium impact so we donít expect huge volatility at the time.

    Wednesday ECB President Draghi will deliver opening remarks in Frankfurt at the ECB conference and on the US Dollar side the U.S. Building Permits will be the only notable release. Thursday the Philly Fed Manufacturing Index will affect the US Dollar and the Euro will have a light economic calendar.

    Friday the Euro remains unaffected by economic data and on the US Dollar side we have the Existing Home Sales numbers; later in the day, Fed Chair Yellen will speak in Washington DC at the Herbert Stein Memorial Lecture; however, the late hour of the speech may translate into a low impact.


    GBP/USD

    Last week the pair erased a good chunk of the losses incurred a week before and moved again above 1.3250. The Pound was heavily affected by Brexit negotiations and showed erratic movement in the second part of the week.



    Technical Outlook

    The pair has broken to the upside the 50 days EMA and the important level at 1.3250. These are bullish signs but as we saw last week, the Pound is very vulnerable to Brexit talks and rumors, so the technical side will be overshadowed if this week we will get more Brexit news.

    Strictly from a technical standpoint, the last Daily candle is showing a long wick in its upper part, which is a sign of rejection, so we may see a move below 1.3250 but as long as price is trading above the 50 days EMA, the bias is slightly bullish.

    Fundamental Outlook

    The first important day of the week ahead will be Tuesday when Bank of England Governor Mark Carney will testify before the Treasury Select Committee. The same day the British Consumer Price Index will be released, showing changes in the price that consumers pay for the goods and services they purchase; this is the main gauge of inflation and has a high impact on the currency, so we expect to see strong movement.

    Wednesday the Average Earnings Index will show changes in the price that employers pay for labor and the last major release of the week is scheduled Thursday: the British Retail Sales, which account for the major part of consumer spending. Overall itís a busy week for the Pound and this will probably trigger high volatility.

  10. #189
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    WEEKLY ANALYSIS: EURO PREPARES FOR ECB MEETING, US DOLLAR SHOWS MODEST RECOVERY SIGNS


    EUR/USD


    Weekly Analysis: Last week the pair remained in a relatively tight range, moving above and below the 50 days Exponential Moving Average, which is flat thus confirming the lack of momentum.



    Technical Outlook

    The pair spent another week inside the horizontal channel created by 1.1875 resistance and 1.1700 support but Friday we saw that price approached the upper part of the channel and then bounced lower. This may be a sign that we are headed towards 1.1700 once again but overall the pair is range-bound and neither side is in clear control.

    Fundamental Outlook

    The first day of the week lacks major announcements for any of the two currencies and action picks up Tuesday with the release of the Eurozone Manufacturing and Services PMIs, which are surveys derived from the opinions of purchasing managers regarding business conditions in the respective sector.

    Wednesdayís highlight will be the release of the U.S. Durable Goods Orders, an indicator that shows changes in the total value of orders for goods with a life expectancy of more than 3 years. Thursday will be the most important day of the week for the Euro as the ECB will announce their interest rate and soon after, ECB President Mario Draghi will hold his usual press conference, which is known to be a major market mover.

    The trading week ends Friday with the release of the U.S. Advance Gross Domestic Product, which is the first version in a series of three and thus tends to have the strongest impact. The GDP is an economyís main gauge of overall performance, so higher numbers usually strengthen the currency.


    GBP/USD

    The pair continued lower after bouncing at 1.3350 resistance, mostly because British inflation data wasnít as good as some expected and BOE Governor Carney didnít show a hawkish stance.



    Technical Outlook

    Price descended below the 50 days Exponential Moving Average, which makes the bias bearish but the last daily candle is showing a long wick in its lower part, which is a sign of rejection. If the 50 days EMA and 1.3250 resistance can stop this upwards momentum, then we will probably see a touch of 1.3050 this week, otherwise the pair will be headed for 1.3350.

    Fundamental Outlook

    Only two notable releases will affect the Pound this week, both scheduled Wednesday: the Preliminary GDP (main gauge of economic performance as mentioned prior) and the Inflation Report Hearings, during which BOE Governor Carney will testify on inflation before Parliament's Treasury Committee. As always, the U.S. releases will have a direct impact on the pairís movement.

  11. #190
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    WEEKLY ANALYSIS: US DOLLAR AND BRITISH POUND SET FOR HUGE MOVES: NON-FARM PAYROLLS AND BOE POTENTIAL RATE HIKE


    EUR/USD


    Weekly Analysis: The European currency weakened after ECB President Draghi announced a QE taper on Thursday last week. From 2018 the monthly pace will run at 30 billion Euros, as opposed to the current 60 billion Euros.



    Technical Outlook

    The rejection at the 50 days Exponential Moving Average followed by the confident break of 1.1700 key support shows that the long term uptrend is coming to an end. The pair is likely to enter a bearish market, with the next support and target located at 1.1450 but itís also possible to see a bounce higher from the current support and a re-test of the recently broken level at 1.1700. If the level will turn into resistance, rejecting price lower, then the chances of a downtrend will increase.

    Fundamental Outlook

    The week starts with the release of the German Preliminary Consumer Price Index, scheduled Monday and continues Tuesday with the Eurozone CPI. These are the main gauges of inflation but often the German data has a bigger impact because it is released earlier and also because the German economy is one of the most important for the entire Eurozone.

    Wednesday the FOMC will release their Rate Statement, announcing the rate decision. Thereís no change expected but if the statement contains hints about the next hike, we will most likely see very strong movement. Thursday will be a slower day for the pair but the week ends Friday with the most important U.S. jobs data: the Non-Farm Payrolls, which is a report that shows changes in the total number of employed people in the U.S., excluding the farming industry. Higher numbers show increased economic activity and indicate that consumer spending is likely to pick up in the near future, thus strengthening the greenback.


    GBP/USD

    The pair completed another choppy week, with higher volatility than usual but it still remained between support and resistance and all strong moves in one direction were reversed.



    Technical Outlook

    The last move is bearish and the US Dollar is picking up pace across the board but for the time being the sellers are having difficulty breaking the support at 1.3050 and the 50 days Exponential Moving Average is still flat, indicating that the pair is in range-mode. This week we expect to see another attempt to break the mentioned support, which, if successful will open the door for an extended move lower, with 1.2950 and 1.2850 as targets. Otherwise, the 50 days EMA will become the first target.

    Fundamental Outlook

    The first major release for the Pound is scheduled Wednesday in the form of the British Manufacturing PMI and followed Thursday by the Construction PMI. These are surveys of purchasing managers that ask respondents to rate business conditions in their respective sectors; the impact is moderate but a greater number than expected usually strengthens the currency.

    Also Thursday the Bank of England will announce the interest rate, which is expected to change from 0.25% to 0.50%. If this does happen, we will most likely see huge movement on all Pound pairs, so caution is strongly advised. The same day the Bank of England will release the Inflation Report containing an outlook for inflation and economic growth for the next 2 years and BOE Governor Carney will hold a press conference discussing the Report.

    The final event of the week will be the Services PMI, scheduled Friday but this release will probably be overshadowed by the events that unfold Thursday.

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