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GDMFX - Weekly News
WEEKLY ANALYSIS: RANGING CONDITIONS STILL ACTIVE AHEAD OF U.S. RETAIL SALES AND INFLATION DATA


EUR/USD



Weekly's Analysis: Last week the pair picked up speed and moved to the upside with more determination on the back of soft economic data coming out of the United States. The Fed didn’t offer clear clues that a hike is due this year, contributing to a weak US Dollar.

[Image: vXoETfT.jpg]

Technical Outlook

The resistance at 1.1215 was clearly broken and the bulls are making a run for 1.1450. Both oscillators are moving upwards, without being overbought so the chances of an encounter with the key resistance at 1.1450 are higher now than they’ve been before but keep in mind we are still in a raging market, without clear direction. A break of 1.1450 would bring in additional buyers and would mark a possible end to the ranging market. To the downside, the pair is supported by a bullish trend line, the 50 period Exponential moving Average and 1.1215.

Fundamental Outlook

Monday U.S. banks are closed, celebrating Columbus Day and Europe didn’t schedule major announcements so we expect a slow grinding day. Tuesday the German ZEW Economic Sentiment survey comes out, showing the opinions of about 275 German professional investors and analysts about a 6-month economic outlook.

Wednesday action picks up as the United States Retail Sales numbers come out but things on the European side are slow. Thursday the U.S. Consumer Price Index is released and the impact on the market is likely to be strong especially because the Fed takes inflation into consideration when deciding whether to raise rates or not. Later in the day the Philly Fed Manufacturing PMI comes out, offering insights into the health of the manufacturing sector in the Philadelphia district.

The week ends Friday with the release of the European Final CPI, which has a medium impact on the market, mainly because the German Prelim CPI and CPI Flash Estimate are already released. Later in the day the University of Michigan will release a Consumer Sentiment survey which is important for the US Dollar because increased levels of confidence among consumers suggest that an increase in retail sales will soon follow.


GBP/USD

The Pound had a bullish week, mostly because its counterpart, the dollar, suffered from mixed sentiment and signals from the Fed.

[Image: N5RtyTy.jpg]

Technical Outlook 

Although the pair made substantial advances last week, important resistance sits in front of further upside movement: price bounced Thursday and Friday at the 50 days Exponential Moving Average and 1.5330 horizontal resistance is not clearly broken. If this confluence zone can be broken during the first days of the week, we are likely to see a move close to 1.5500 but otherwise the zone around 1.5170 – 1.5200 is the next target.

Fundamental Outlook

The main events for the Pound are the release of the British Consumer Price Index (main gauge of inflation) scheduled Tuesday and the Claimant Count Change which comes out Wednesday The second indicator shows how many people applied for unemployment related help and a higher number is detrimental for the economy because people without jobs spend less, thus a slowdown of consumer spending is likely to follow.
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WEEKLY ANALYSIS: MAJOR TURNING POINTS AHEAD. ECB INTEREST


EUR/USD



Weekly Analysis: Last week the economic data was mixed and we witnessed an important event for medium term movement: a false break of key resistance (1.1450). This is likely to influence future price action and can be considered a major turning point.

[Image: E6x4tuO.jpg]

Technical Outlook

Although recent movement was choppy, the pair had a bullish bias but a lot of bearish pressure was also present. Now it’s time to see if the bulls really have what it takes to establish clear control and they could do this only if 1.1450 is broken early in the week. The last 2 days of the previous week belonged to the bears and the fact that 1.1450 rejected price is a clear sign of bull weakness but the beginning of a medium term downtrend must be confirmed by a break of the bullish trend line seen on the daily chart above (the moving average and 1.1215 support are also important for this scenario).

Fundamental Outlook

The first notable event of the week is the release of the U.S. Building Permits, scheduled Tuesday. The indicator shows the annualized number of permits issued for the beginning of residential building during the previous month. A higher value is usually beneficial for the greenback because it shows increased construction activity but the impact is often mild.

Wednesday the calendar is light and Thursday the most anticipated event of the week takes place: the ECB announces the interest rate and ECB President Mario Draghi holds a press conference, discussing the rate decision. Journalists ask questions and this is usually the most important part of the day, with strong moves for the euro.

The economic week ends Friday with the release of the German and French Manufacturing PMIs; both are leading indicators of economic health derived from the opinions of purchasing managers from the manufacturing sector and higher numbers bring euro strength.


GBP/USD

The Pound showed great strength last week and pushed the pair into 1.5500 resistance although the British economy is not at its best. U.S. data was also pretty weak, contributing to the pair’s climb.

[Image: llYJORE.jpg]

Technical Outlook

After touching 1.5500 resistance, the pair paused for two days and retraced slightly lower. This could be a sign of buyer weakness but could also be just a consolidation generated by traders closing their positions at this important level. If the latter is true, we will probably see a move towards 1.5675 this week but keep in mind that the daily Stochastic is touching its overbought level; this is not an extreme condition but further climbs can be slowed down, especially if the Relative Strength Index will enter overbought too.

Fundamental Outlook

Only two important events will affect the Pound this week: Tuesday, Bank of England Governor Mark Carney will testify before the Treasury Select Committee about the BOE Bill and Thursday the British Retail Sales numbers are announced. Both events can bring increased volatility so caution is recommended.
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WEEKLY ANALYSIS: DOLLAR GAINS MOMENTUM AHEAD OF FED’S RATE MEETING


EUR/USD



Weekly Analysis: Last week price movement was very slow before the speech of the ECB President Mario Draghi but his comments about more stimulus and even a possible decrease of the deposit rate triggered euro weakness and brought the pair out of the small range.

[Image: VqqZBea.jpg]

Technical Outlook

An important bullish trend line was broken last week, together with the 50 period Exponential Moving Average and the horizontal support at 1.1100. This puts the sellers in clear control and prepares us for a medium term bearish market but does not exclude a bullish pullback. Price is likely to stall around 1.1000 before continuing towards 1.0820 which is key support for medium term price action; first resistance is located at 1.1100.

Fundamental Outlook

The first event of the week is the release Monday of the German IFO Business Climate which is a survey with a large sample of about 7,000 businesses. Tuesday the focus shifts on the U.S. economy for the release of the Durable Goods Orders and the CB Consumer Confidence survey. Lately the impact of these indicators has been lower than usual but strong movement is still a distinct possibility.

Wednesday the Fed will announce their decision on the interest rate and a FOMC Rate Statement will be released, showing the reasons behind the decision. Unlike in September, a rate hike is not expected (currently <0.25%) but caution is recommended throughout the day.

The German Preliminary Consumer Price Index is scheduled Thursday; because it’s an important gauge of inflation, higher numbers can positively affect the euro. The same day the US Dollar will be heavily influenced by the U.S. Advance Gross Domestic Product. The week ends Friday with the release of the German Retail Sales and Eurozone Consumer Price Index; both can have a big impact if the actual numbers differ substantially from the analysts’ forecast.


GBP/USD

Despite strong British Retail Sales numbers, the Pound lost ground against the US Dollar last week, after another attempt to break 1.5500 resistance. The week was clearly bearish and it offered important clues about future direction.

[Image: vXdqH6m.jpg]

Technical Outlook

The resistance at 1.5500 generated a heavy bounce lower and by doing so, it also showed the importance of this level for future price action. The pair is still trading above the bullish trend line seen on the chart but the level at 1.5330 has been breached and the momentum is bearish so we expect a move below this diagonal support. If this scenario comes true, the next area of interest is 1.5200 – 1.5170 but on the other hand, a bounce at the trend line will probably generate another encounter with 1.5500.

Fundamental Outlook

Only one major event will influence the Pound this week: the British Preliminary Gross Domestic Product. This is the main gauge of an economy’s overall performance and the Preliminary version is the most important out of the three (Preliminary, Second Estimate and Final). The release is scheduled Tuesday and higher values normally strengthen the Pound; of course, the U.S. events will have a direct impact on the pair, as always.
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WEEKLY ANALYSIS: ALL EYES ON U.S. NON-FARM PAYROLLS. JOBS TIGHTLY CORRELATED WITH END-OF-YEAR RATE HIKE


EUR/USD



Weekly Analysis: Last week the US Dollar strengthened on speculation that a December rate hike is still on the table but most of the gains were erased Friday and the pair moved above resistance.

[Image: l0FAA3O.jpg]

Technical Outlook

Although price retraced higher, the downside still prevails and a clear sign is the rejection seen Friday when the bulls pushed above 1.1000 but then failed to close the week above the level. During the first days of this week we are likely to see a struggle for control around 1.1000, with the result influencing the rest of the week. If the bears regain control, we are likely to see a move into the support at 1.0820 and otherwise, we expect a break of 1.1100

Fundamental Outlook

The first important release of the week is the U.S. Manufacturing PMI which is scheduled Monday and acts as a leading indicator of economic health with focus on the manufacturing sector. Tuesday ECB President Mario Draghi will speak in Frankfurt and Wednesday we take a first look at U.S. employment with the release of the ADP Non-Farm Employment Change. The same day Fed Chair Janet Yellen will testify on bank regulation before the House Financial Services Committee.

The last and probably most important event of the week is the release of the U.S. Non-Farm Payrolls, scheduled Friday. This is always a huge market mover but more so now, because at their latest meeting the Fed mentioned that a rate hike is tightly correlated with jobs and inflation. Look for strong movement and use caution at the time of the release.


GBP/USD

The Pound showed surprising strength during the last trading day of last week and managed to reverse the previous bearish momentum, moving the pair above several resistance areas.

[Image: mi2qy4O.jpg]

Technical Outlook

Although the pair broke a bullish trend line early last week, the downside momentum proved short lived and price returned above the trend line as well as above 1.5330 and the 50 period Exponential Moving Average. This makes 1.5500 the first destination but recently we saw this level reject price several times so it will provide strong resistance once touched. We expect a bearish bounce at the mentioned level but on the other hand, a break would show the bulls have enough strength to retake overall control.

Fundamental Outlook

The week ahead is busier for the Pound than usual: Monday, Tuesday and Wednesday the Manufacturing PMI, Construction PMI and Services PMI come out respectively, but the most important day is Thursday when the BOE will announce their decision on the interest rate. A monetary Policy Summary is released at the same time, together with a breakdown of the votes and the Inflation Report which will offer BOE’s projections on inflation and economic growth for the next 2 years. Soon after, BOE Governor Mark Carney will hold a press conference, discussing the Inflation Report.

Friday morning the British Manufacturing Production numbers come out and later in the day, NIESR will release a British GDP Estimate. As always, the U.S. announcements made throughout the week (especially the NFP) will have a direct impact on the pair.
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WEEKLY ANALYSIS: U.S. RATE HIKE SPECULATION FUELS ANOTHER BEARISH WEEK


EUR/USD



Weekly Analysis: For the entire last week the bears maintained their control over the pair, capitalizing on a much better than expected NFP value. The probability of the Fed raising rates in December has increased substantially and this will probably contribute to further downside movement.

[Image: pXDlcPZ.jpg]

Technical Outlook

The support at 1.0820 was broken last week and this represents a major turning point for medium term direction. The next destination is most likely 1.0500 but before it can be reached, price needs to retrace higher in order to clear the oversold condition of the oscillators and possibly to re-test 1.0820 from below, confirming it as resistance. The overall bias is negative so expect continued downside movement, with 1.0660 as minor support.

Fundamental Outlook

The first two days of the week are relatively light in terms of news announcements, with the only important events being the Eurogroup Meetings (Monday) and the ECOFIN Meetings (Tuesday). Wednesday U.S. banks will be closed in observance of Veterans Day so it’s possible to see irregular volatility during the New York session. The same day, at ECB President Mario Draghi will speak at the Bank of England Open Forum; caution is recommended because his speeches always have the potential to strongly impact the single currency.

Thursday is again a slow day but Friday the action picks up with the release of the German Preliminary Gross Domestic Product, the U.S. Retail Sales and the University of Michigan Consumer Sentiment survey. All three are considered high-impact releases so the pair’s direction will probably be heavily influenced by the results.


GBP/USD

The pair suffered last week from a disappointing Inflation Report as the BOE lowered their economic growth and inflation expectations. The NFP release strengthened the greenback so the pair finished the week considerably lower.

[Image: 757zVzh.jpg]

Technical Outlook

We expect the downside price action to continue now that the zone around 1.5170 – 1.5200 is broken and the balance is clearly tilted in favor of the bears. However, such a drop is usually followed by a counter move, thus early during this week we anticipate a move higher, which should be treated like a retracement, not a reversal. The oscillators are not oversold but the pair has traveled a long distance in a short while, which makes a move up more probable.

Fundamental Outlook

The most important event of the week for the Pound is the release of the Claimant Count Change scheduled Wednesday. The indicator tracks changes in the number of total people who applied for unemployment related aid and usually affects the Pound strongly, with higher numbers being detrimental. The same day BOE Governor Mark Carney will hold a press conference with the main topic being the Inflation Report. This is another possible reason for high volatility so caution is recommended. The rest of the week lacks major economic announcements for the Pound.
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WEEKLY ANALYSIS: ALL EYES ON U.S. INFLATION. FED RATE HIKE STILL ON THE TABLE


EUR/USD



Weekly Analysis: The pair had a choppy week and most of the moves in one direction were quickly reversed. The speeches of European and U.S. key bankers added more confusion and overall the market reversed all directional moves.

[Image: Lxm5dY0.jpg]

Technical Outlook

The resistance at 1.0820 proved strong last week and rejected price lower so we may see downwards price action but it is important to note that the candles corresponding to the last four days have long wicks in their lower side. This is a sign of bullish pressure and on top of that, the Stochastic is oversold for a relatively long time; also the Relative Strength Index is just exiting oversold territory. These signs suggest that bullish price action will soon follow, with the first barrier being 1.0820; to the downside support is still located at 1.0660, followed by 1.0500.

Fundamental Outlook

Monday the Final version of the European Consumer Price Index (CPI) is released, showing fluctuations in inflation across the Eurozone and the same day, ECB President Mario Draghi will deliver a speech in Madrid. Tuesday the German ZEW Economic Sentiment survey comes out but the highlight of the day will be the release of the U.S. CPI and CORE version of the same indicator. Since the Fed made it clear that inflation is crucial in their decision regarding the interest rate, the release will probably have a stronger impact than usual, with higher numbers strengthening the US Dollar. 

Wednesday’s main event is the release of the FOMC Meeting Minutes which will offer insights into the Fed’s latest meeting and into the reasons that made them keep the interest rate unchanged. Thursday the greenback will be affected by the Philly Fed Manufacturing Index and the European calendar is light, but the trading week ends Friday with another speech of the ECB President Draghi, this time in Frankfurt, at the Euro Finance week. As always, these speeches should be treated with caution because strong and often irregular movement can occur.


GBP/USD

The Pound started last week strong but bullish momentum faded towards the end of the week; however, the pair is now trading above previous resistance and the bears have lost short term control.

[Image: pgdkHz2.jpg]

Technical Outlook

The pair is still moving below the 50 days Exponential Moving Average and the last two candles have wicks in their upper and lower parts which suggests indecision but also that bulls are starting to fade away. On the other hand, the oscillators are starting to move up so we may see further upside action which can take price into the 50 EMA where a bounce lower is likely to occur.

Fundamental Outlook

Two very important announcements will affect the Pound this week: Tuesday the British Consumer Price Index is released, offering a status of inflation in the United Kingdom and Thursday the Retail Sales come out. Considering that sales made at retail levels account for a major part of overall economic activity, higher numbers usually strengthen the Pound. Throughout the week the pair will be affected by the U.S.
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WEEKLY ANALYSIS: THANKSGIVING WEEK – IRREGULAR VOLATILITY, CHOPPY MOVEMENT POSSIBLE


EUR/USD



Weekly Analysis: The pair just completed another bearish week, with price closing lower than it started; however the question whether the Fed will or will not raise rates this year still creates a lot of speculation and back and forth movement.

[Image: q2HztUc.jpg]

Technical Outlook

After a brief retracement to the upside, the bears made another attempt to break 1.0660 support and they’ve managed to close the week below it. It seems the US Dollar has regained control but we have to pay attention to the Stochastic and the Relative Strength Index because both have spent a lot of time near their respective oversold levels and this is a warning sign that a retracement higher will soon follow. We may see another drop before a pullback but be careful with shorts this week.

Fundamental Outlook

The week ahead is slow in terms of economic announcements, with the first event being the release of the French and German Manufacturing PMIs, Monday morning. Tuesday the German IFO Business Climate survey comes out but the more important release is the Preliminary version of the U.S. Gross Domestic Product, which as we know is the most important gauge of overall economic performance. Later in the day a U.S. Consumer Confidence survey comes out but the impact is often low if the actual figure matches analysts’ forecast.

Wednesday’s most important event is the release of the U.S. Durable Goods Orders (goods with a life expectancy of at least 3 years) and Thursday the United States celebrate Thanksgiving Day so banks will be closed and volatility might be irregular. This effect is likely to extend through Friday when no major indicators are released by either the U.S. or Europe.


GBP/USD

The Pound was weakened by disappointing data released last week and erased all gains accumulated previously, but support was not broken.

[Image: Uhs0KgJ.jpg]

Technical Outlook 

The latest impulse is bearish and strong rejection was seen at 1.5330. This move confirmed that 1.5330 is good resistance and opened the door for a break of 1.5200 – 1.5170 support zone. A break would mean a major victory for the bears because this support is key for medium term direction so we anticipate further downside price action once 1.5170 is clearly broken. After that, the first target is 1.5030 where we expect a bullish bounce. As an alternate scenario, a break of 1.5330 will make 1.5500 the first target.

Fundamental Outlook

The United Kingdom will only release one major economic indicator this week: the Second Estimate Gross Domestic Product, scheduled Friday. The rest of the week only low impact indicators are released, so we expect a period when the US Events and the technical aspect will dictate direction.
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WEEKLY ANALYSIS: PREPARING FOR A WILD WEEK: ECB RATE ANNOUNCEMENT, HUGE U.S. NON-FARM PAYROLLS RELEASE


EUR/USD



Weekly Analysis: Last week’s price action was affected by Thanksgiving Holiday and price action was choppy, volatility was irregular but with a downwards bias.

[Image: XQK4xs6.jpg]

Technical Outlook

The main levels to watch this week are 1.0660 as resistance and the zone around 1.0500 as support. Price will most likely touch both of them as the week is full of major data releases but from a strictly technical point of view, we expect retracements to the upside. This is based on the fact that the Daily candles are showing long wicks (both upper and lower), which is a sign of indecision and the oscillators are long time oversold. The bearish momentum is starting to fade but keep in mind that we are still in a medium term downtrend.

Fundamental Outlook

The week opens with Monday with the German Retail Sales, followed by the German Preliminary Consumer Price Index, both very important events for the single currency, mainly because the German economy plays a major role in the overall health of the Eurozone. Tuesday the United States will release Manufacturing data in the form of the Purchasing Managers’ Index and Wednesday we take an early look into U.S. employment with the release of the ADP Non-Farm Employment Change. Later the same day, Fed Chair Yellen will talk about the economic outlook at The Economic Club, in Washington.

Thursday is the most important day of the week for the euro as the ECB announces the interest rate (not expected to change from the current 0.05%) and later ECB President Mario Draghi will deliver a speech at the usual Press Conference that accompanies the rate announcement. Journalists will ask questions and as always, this is a time when the euro can behave erratically so we recommend caution until the conference is over. Later in the day, Fed Chair Yellen will testify before the Joint Economic Committee, with the topic being monetary policy so we expect a day with strong movement.

Probably the most important data of the week is released Friday in the form of the Non-Farm Payrolls which is considered the most important jobs related indicator for the United States. It shows how many new jobs were created in the previous month with higher numbers suggesting a thriving economy and contributing to a rate hike this year.


GBP/USD

The pound-dollar pair moved lower for almost the entire last week on the back of comments made by BOE Governor Mark Carney that rates will remain low in the near future. Talks about increased chances of a Fed rate hike also contributed to the fall.

[Image: 28it7QV.jpg]

Technical Outlook

The pair moved below the key support zone between 1.5200 – 1.5170 and stopped right on the level at 1.5030. We expect the down move to make its way into the area around 1.4970 where it will probably pause or retrace higher. Movement throughout this week will be determined by the data released and the technical side will be secondary, with the main levels to watch being 1.5170 as resistance and 1.4970 as support.

Fundamental Outlook

Tuesday Bank of England’s Governor Mark Carney will testify on the Inflation Report and on the Bank Stress Test results released earlier the same day; the impact on the Pound depends a lot on the results of the stress test and of course on the attitude of the Governor. The same day the Manufacturing PMI comes out, offering insights into the health of the British Manufacturing sector. The rest of the week is rather slow for the Pound, with the only notable events being the release of the Construction PMI scheduled Wednesday and the Services PMI programmed for Thursday.
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WEEKLY ANALYSIS: POSITIVE U.S. JOBS DATA BRINGS A RATE HIKE CLOSER. US DOLLAR STRENGTH LIKELY TO FOLLOW


EUR/USD



Weekle Analysis: Last week we saw huge euro strength at the time of the ECB Press Conference. The pair soared, erasing the losses incurred over several previous weeks. The NFP report, although better than anticipated, didn’t manage to bring the pair back down.

[Image: ldKIa1K.jpg]

Technical Outlook

Price pushed through the resistance at 1.0825 and through 50 days Exponential Moving Average, bouncing lower at 1.0980. This level will now act as short term resistance but we are likely to see another push above it. Once the level is broken, the pair will head towards the next target, which is 1.1100. Keep in mind that sometimes after such a huge move, the market moves sideways for a while or even retraces lower; if this occurs, the first barrier is 1.0825.

Fundamental Outlook

After a wild week such as the one that just ended, this week the economic calendar is light and we will probably see less movement. Monday the Eurogroup Meetings take place, followed Tuesday by the ECOFIN Meetings, attended by finance ministers from the Eurozone member states. Wednesday is a slow day for both Europe and the United states, while Thursday the only notable event is the release of the US Unemployment Claims.

Friday action picks up as the U.S. Retail Sales are released, together with the Producer Price Index and followed by the University of Michigan Consumer Sentiment survey which acts as a leading indicator of consumer spending. However the impact is often mild and depends on how big is the difference between actual and forecast.


GBP/USD

The pair dropped earlier during the week, just to climb back up Thursday, giving us a difficult to trade period. The U.S. jobs data didn’t have the anticipated high impact, probably because the pair had already moved strongly earlier in the week.

[Image: 6C8Z1dI.jpg]

Technical Outlook

Although the NFP report didn’t create the volatility we are used to, the effects will probably extend to this week and we will see US Dollar strength. Price stopped at 1.5160 but this could be just because the week ended, not because a move lower is next, so the first day of the week will be important for short term price action. If the pair can climb above 1.5160 and turn this level into support, we will likely see further upside movement, possibly into 1.5330 resistance; of course, for that to happen, the 50 days Exponential Moving Average must be broken first. From a medium term perspective, we don’t have a higher high so the downtrend is intact.

Fundamental Outlook

Monday BOE Governor Mark Carney will testify before the Committee on Economic and Monetary Affairs of the European Parliament and Tuesday the Manufacturing Production numbers come out, showing the change in the total output generated by the manufacturing sector. Later in the day, NIESR will release an Estimate of the British Gross Domestic Product; this estimate is usually pretty accurate so we are likely to see some volatility at the time of the release.

Another important day of the week is Thursday, when the Bank of England will announce the interest rate and members’ votes. The rate is not expected to change but a statement will be released, outlining the reasons behind the decision and this document can contain clues about future rate changes, thus creating volatility.
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WEEKLY ANALYSIS: HOW WILL CHRISTMAS WEEK AFFECT THE US DOLLAR?


EUR/USD



Weekly Analysis: Last week the most anticipated Fed meeting of the year took place and we witnessed a rate hike to <0.50% from the previous <0.25%. The change did not have the immediate effect which most market participants expected but US Dollar strength is probably going to extend to the near future.

[Image: GXmvYUR.jpg]

Technical Outlook

Price action throughout the week will be affected by the Christmas Holidays and we are likely to get irregular movement so we recommend caution throughout the week. The pair is currently testing the support zone created around 1.0825 and we expect small bounces to the upside before the level can be broken. However, note the position of the Daily stochastic which is just exiting overbought, a fact which favors extended moves to the downside; Fed’s decision to raise the rate will probably contribute to a stronger move south as well.

Fundamental Outlook


The week ahead will be influenced by Christmas and economic news are scarce. Monday no major events are scheduled and Tuesday the Final version of the U.S. Gross Domestic Product comes out, alongside the Existing Home Sales. Wednesday we have the U.S. Durable Goods Orders and the New Home Sales, while Thursday is Christmas Eve and the only notable indicator is the U.S. Unemployment Claims. However, the effect of this release is hard to anticipate due to the low liquidity which will most likely be present.

Friday is Christmas Day thus most banks and brokerages all over the world will be closed so price action will be irregular and without clear direction.


GBP/USD


The US Dollar performed better against the Pound than it did against the Euro and we saw strong movement south despite better than anticipated economic data released by the United Kingdom last week.

[Image: bWU0Zxk.jpg]

Technical Outlook


The bears are having difficulties breaking the support zone around 1.4895 but we expect this barrier to fall and price to head into 1.4600. However, this distance is not likely to be traveled this week. The first target after a potential break of 1.4895 will become 1.4830 (better seen as support on a Weekly chart), but as mentioned earlier, price action during the entire week will be affected by the Christmas Holidays, thus we recommend extra caution.

Fundamental Outlook


The British Current Account is released Wednesday, showing the difference between the value of imported and exported goods. A higher than expected number is beneficial for the Pound but the effect is often mild and probably more so this time because we are getting close to Christmas. The same day, United Kingdom’s Final Gross Domestic Product is released; this is the main gauge of overall economic performance but the Final version usually has the lowest impact. Friday British Banks will be closed, celebrating Christmas Day.
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