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GDMFX - Weekly News
WEEKLY ANALYSIS: ECB DECISION CREATES A PRICE STORM, FED RATE MEETING IS NEXT


EUR/USD



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

[Image: P2o2okl.jpg]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: 3NZY4sh.jpg]

Technical Outlook

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

Fundamental Outlook

Two major economic releases will affect the Pound this week: the first is the Claimant Count Change released Wednesday, which shows the change in the total number of people who asked for unemployment related benefits. The second event is the Bank of England rate announcement, scheduled Thursday and accompanied by a statement which will outline the reasons behind the rate decision. Other than that, the Pound has a slow week but the pair will be directly affected by the U.S. events mentioned above.
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WEEKLY ANALYSIS: KEY RESISTANCE AHEAD. US DOLLAR POISED FOR A COMEBACK?


EUR/USD



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

[Image: zGvkcGP.jpg]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: K5aG4Fe.jpg]

Technical Outlook

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

Fundamental Outlook

The week ahead is slow, with the main event being the British Consumer Price Index scheduled for release Tuesday. This is the main gauge of inflation and usually a higher number is beneficial for the Pound, especially since the current value is considered too low. Thursday the Pound will be affected by the British Retail Sales release and Friday UK banks are closed, celebrating Good Friday. As always, the U.S. events released throughout the week will directly affect the pair’s behavior.
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WEEKLY ANALYSIS: EASTER HOLIDAY, AMERICAN NON-FARM PAYROLLS TO TRIGGER ERRATIC MOVEMENT


EUR/USD



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

[Image: MvwncBW.jpg]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: Moq1bIW.jpg]

Technical Outlook

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

Fundamental Outlook

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

Friday the British Manufacturing Purchasing Managers’ Index is released, showing the state of the manufacturing sector according to the opinions of purchasing managers from said sector. Better numbers usually strengthen the Pound but the impact is sometimes muted. Throughout the week, the pair will be directly affected by the U.S. indicators, mainly the NFP.
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WEEKLY ANALYSIS: BULLS’ STRENGTH FADES, BEARISH PRESSURE BUILDS UP


EUR/USD


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

[Image: WXbkCjh.jpg]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: EzsHC78.jpg]

Technical Outlook

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

Fundamental Outlook

The week opens Monday with the release of the British Construction PMI, followed Tuesday by the Services PMI. Both are surveys of purchasing managers which offer insights into the state of the respective sector and can have a positive impact on the Pound if better numbers are posted. The other important event of the week ahead is scheduled Friday in the form of the Manufacturing Production, an indicator that shows changes in the total value of output produced by the manufacturing sector. Same as with the other 2 indicators, a higher number is beneficial for the Pound and as always, the U.S. events will have a direct impact on the pair’s movement.
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WEEKLY ANALYSIS: FED HOLDS UNEXPECTED MEETING. BREAKOUTS AHEAD!


EUR/USD


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

[Image: xImT10Y.jpg]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: XU0trJg.jpg]

Technical Outlook

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

Fundamental Outlook

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

The second and last notable event of the week is the Bank of England interest rate decision scheduled Thursday. No change is anticipated for a relatively long period but the announcement can create volatile movement on Pound related pairs. At the same time BoE will release a summary of the Monetary Policy meeting, showing the reasons that determined the rate decision and also a breakdown of the members’ votes on the rate. This cluster of events is likely to generate irregular movement, thus we recommend caution.
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WEEKLY ANALYSIS: US DOLLAR TURNS UP THE HEAT. FULL SCALE REVERSAL IN THE MAKING?


EUR/USD

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

[Image: YqlAe3n.jpg]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: QmdfI3H.jpg]

Technical Outlook

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

Fundamental Outlook

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

Wednesday the Claimant Count Change comes out, showing changes in the number of people who applied for unemployment related benefits during the previous month. A higher number shows that more people are unemployed and has a negative influence on the Pound, weakening it. The last important event of the week is the release of the British Retail Sales scheduled Thursday. Higher numbers for this indicator usually bring Pound strength but the impact is sometimes mild.
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WEEKLY ANALYSIS: THE US DOLLAR BUCKLES UP FOR STRONG MOVES. IT’S FED RATE WEEK!


EUR/USD


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

[Image: Exe6vly.jpg]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: 0zlXdG0.jpg]

Technical Outlook

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

Fundamental Outlook

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


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


EUR/USD


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

[Image: C3FoqEd.jpg]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: Izo2EIe.jpg]

Technical Outlook

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

Fundamental Outlook

Monday UK banks are closed in observance of May Day and no major announcements are made; the first indicator of the week is the Manufacturing PMI, scheduled Tuesday and followed Wednesday by the Construction PMI. Thursday the Services PMI comes out and this is the last important economic indicator of the week, for the Pound. All three indicators are surveys of purchasing managers from their respective sectors and act as leading indicators of economic health. Higher numbers usually benefit the Pound but often the impact is mild. Of course, the U.S. jobs data will be a market mover for the pair.
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WEEKLY ANALYSIS: UPTREND STILL INTACT, US DOLLAR FIGHTS FOR CONTROL


EUR/USD


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

[Image: s8dcDba.jpg]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: vZzp5b4.jpg]

Technical Outlook

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

Fundamental Outlook

Wednesday the British Manufacturing Production comes out, showing changes in the total value of output generated by the manufacturing sector but the most important day of the week will be Thursday when the Bank of England will release their Inflation Report, the interest rate decision and a Rate Statement. The inflation report shows BoE’s projection regarding economic growth and inflation for the next 2 years and later in the day Governor Mark Carney will hold a press conference, discussing the contents of the report. As for the rate, this is not expected to change but volatility is usually generated by the event.
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WEEKLY ANALYSIS: THE US DOLLAR STRIKES BACK, BEARS THREATEN THE UPTREND


EUR/USD


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

[Image: wIgBoBH.jpg]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: qVhQwhb.jpg]

Technical Outlook

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

Fundamental Outlook

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

The last major event of the week is the release of the British Retail Sales, scheduled Thursday. This kind of sales represents a big chunk of the entire consumer spending which in turn accounts for a major part of the entire economic activity, thus higher numbers usually strengthen the Pound.
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