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GDMFX - Weekly News
#61
FOREX TECHNICAL ANALYSIS: ALL EYES ON THE EUROPEAN CENTRAL BANK RATE AND AMERICAN EMPLOYMENT DATA

EUR/USD


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

[Image: 2014.09.29-2014.10.05-All-eyes-on-the-Eu...24x481.png]

Technical Outlook

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

Fundamental Outlook

We have an important week ahead, with the first major event being the release of the German Preliminary CPI scheduled Monday. As this is the main gauge of inflation and the German economy is a pillar of the entire Euro Zone, we expect volatility at the time of the release. Euro Zone’s CPI Estimate will be released Tuesday and the same day a survey regarding American Consumer Confidence comes out.

[b]Wednesday’s[/b] headline will be the ADP Non Farm Employment Change, a private report which tries to mimic the Government report issued 2 days later. Thursday will be the most important day of the week for the Euro as the ECB will announce the interest rate and Mario Draghi will hold a press conference discussing the rate decision and the economic situation of the Euro Zone. This is almost always a reason for strong and sometimes irregular movement so we recommend caution if trading during the Conference.

The US Dollar will be strongly influenced Friday by the Non Farm Employment report which is considered the most important data regarding the American job market and almost always generates big swings.


GBP/USD

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

[Image: 2014.09.29-2014.10.05-All-eyes-on-the-Eu...24x481.png]

Technical Outlook

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

Fundamental Outlook

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


Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#62
FOREX TECHNICAL ANALYSIS: DOWNTREND LOSES STEAM. NEW LOWS STILL A DISTINCT POSSIBILITY

EUR/USD


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

[Image: 2014.10.13-2014.10.19-Downtrend-loses-st...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

The Philly Fed Manufacturing Index is released Thursday while Friday’s main event will be a speech of Fed Chair Janet Yellen. The final event of the week is an American Consumer Sentiment survey released by the University of Michigan.


GBP/USD

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

[Image: 2014.10.13-2014.10.19-Downtrend-loses-st...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#63
FOREX TECHNICAL ANALYSIS: THE US DOLLAR IS STARTING TO LOSE ITS APPEAL

EUR/USD


Forex Technical Analysis: Last week was dominated by the bulls on the back of a disappointing value of the US Retail Sales which showed the American economy may be losing steam. The US Dollar suffered the consequences and the pair traveled upwards, breaking resistance.

[Image: 2014.10.20-2014.10.26-The-US-Dollar-is-s...l-pic1.png]

Technical Outlook

The resistance at 1.2750 was broken decisively last Wednesday but price returned for a re-test during the next two days and the week closed near the mentioned level which turned into support. The pair created a weekly high at 1.2886 which will act as resistance in the future but if the current level at 1.2750 is broken to the downside, the next target will be represented by 1.2620. Given the huge distance traveled to the downside by the pair during the last months, we might see a longer retracement to the upside but on the other hand, a downtrend is still in place and we could see a move below 1.2750.

Fundamental Outlook

The first notable event of this week is the release of the US Existing Home Sales scheduled Tuesday. The indicator shows the annualized number of houses sold during the last month and usually it has a medium impact on the US Dollar. Probably the most important event for the Dollar will be the release Wednesday of the American Consumer Price Index which is a measure of overall inflation. The CORE version, which excludes food and energy from calculation, is released at the same time and this is sometimes considered more important because food and energy can fluctuate a lot, thus distorting the main data.

The French and German Manufacturing Purchasing Managers’ Indexes are released Thursday; these act as leading indicators of economic health and can have a positive impact on the Euro if better numbers are posted. The last event of the week is the release of the US New Home Sales, scheduled Friday. The indicator usually has a higher impact than the Existing Home Sales but this depends a lot on the difference between forecast and actual.


GBP/USD

British inflation dropped more than anticipated last week and this weakened the Pound severely but soon after, disappointing US Retail Sales data took the pair north on the back of Dollar weakness.

[Image: 2014.10.20-2014.10.26-The-US-Dollar-is-s...l-pic2.png]

Technical Outlook

Last Tuesday the important support at 1.5900 was touched and price soon bounced higher, moving above 1.6060 resistance so we can notice the bulls are starting to make their presence known. However, because we are in a downtrend, it is very possible to see another attempt to break 1.5900 but as long as the pair remains above 1.6060, we believe there are strong chances of a move close to 1.6250.

Fundamental Outlook

The Bank of England will announce Wednesday the breakdown of the votes on the latest Interest Rate decision. This is a good way of seeing if some of the members of the Monetary Policy Committee have changed their stance regarding a potential rate hike and usually volatility is created only if the forecast doesn’t come true.

Thursday the British Retail Sales are announced and we saw what a tremendous impact this indicator can have on a currency so caution is recommended. The last major Pound affecting event comes Friday: the release of the Preliminary Gross Domestic Product which is considered the most important version of the three (Preliminary, Second Estimate and Final). As always, the pair will be directly affected by the US events scheduled during the week.


Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#64
FOREX TECHNICAL ANALYSIS: PRICE ACTION SHAPED BY EUROPEAN INFLATION AND AMERICAN MONETARY POLICY

EUR/USD


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

[Image: image0013-1024x479.png]

Technical Outlook

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

Fundamental Outlook

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

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

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


GBP/USD

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

[Image: image0033-1024x479.png]

Technical Outlook

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

Fundamental Outlook

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

Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#65
FOREX TECHNICAL ANALYSIS: OVERSOLD CONDITION CALLS FOR BULLISH MOVEMENT

EUR/USD


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

[Image: 2014.11.10-2014.11.16-Oversold-condition...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: 2014.11.10-2014.11.16-Oversold-condition...24x479.png]

Technical Outlook

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

Fundamental Outlook


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


Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#66
FOREX TECHNICAL ANALYSIS: OVEREXTENDED PRICES CALL FOR BULLISH RETRACEMENTS

EUR/USD


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

[Image: 2014.11.17-2014.11.23-Overextended-price...24x481.png]

Technical Outlook

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

Fundamental Outlook

Monday ECB President Mario Draghi will testify on Monetary Policy before the Committee on Economic and Monetary Affairs. This event is likely to generate a strong market response since all Draghi’s public speeches are important but this appearance holds extra importance due to the fact that monetary policy will be discussed. The German ZEW Economic Sentiment survey is released Tuesday, showing the level of optimism among German analysts and professional investors and the same day the American Producer Price Index comes out, tracking changes in prices charged by producers.

Wednesday’s main event is the release of the FOMC Meeting Minutes which will contain insights into the reasons that stood behind the latest Fed decision regarding monetary policy and interest rates. Thursday the focus remains on the United States for the announcement of their Consumer Price Index and the economic week finishes Friday with another Mario Draghi speech at the 24th European Banking Congress, in Frankfurt.


GBP/USD

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

[Image: 2014.11.17-2014.11.23-Overextended-price...24x481.png]

Technical Outlook

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

Fundamental Outlook

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


Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
Need help? Click here to talk to our customer support
Site: http://www.gdmfx.com
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#67
FOREX TECHNICAL ANALYSIS: CONCERNS OF LOW INFLATION WEAKEN THE EURO

EUR/USD


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

[Image: 2014.11.24-2014.11.30-Concerns-of-low-in...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

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


GBP/USD

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

[Image: 2014.11.24-2014.11.30-Concerns-of-low-in...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

Written by: Bogdan Giulvezan

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

Source of article from the best forex broker.
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#68
OREX TECHNICAL ANALYSIS: PRICE ACTION AFFECTED BY THE APPROACHING OF THE WINTER HOLIDAYS


EUR/USD


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


[Image: 2014.12.08-2014.12.14-Price-action-affec...24x479.png]


Technical Outlook

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


Fundamental Outlook


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


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




GBP/USD


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

[Image: 2014.12.08-2014.12.14-Price-action-affec...24x479.png]


Technical Outlook

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


Fundamental Outlook

Similar to the Euro and US Dollar, the Pound has a slow news week ahead. Tuesday the British Manufacturing Production comes out, showing the change in the total value of output produced by manufacturers and the same day, the NIESR Gross Domestic Product Estimate is revealed. Although this is just an estimate, the impact can be a big one, considering that GDP is an economy’s main gauge of performance. As always, the US events will have a direct impact on the pair’s movement.
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#69
FOREX TECHNICAL ANALYSIS: LAST FULL ECONOMIC WEEK AHEAD OF CHRISTMAS HOLIDAYS


EUR/USD

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

[Image: 20141215-20141221-Last-full-economic-wee...24x479.png]

Technical Outlook

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

Fundamental Outlook

The French and German Flash Manufacturing PMIs are released Tuesday, showing the opinions of purchasing managers from the manufacturing sector regarding business and economic conditions. The same day the German ZEW Economic Sentiment Survey is released; the indicator is derived from the opinions of German professional investors and analysts regarding economic health and usually has a high impact on the Euro.
Wednesday is the week’s most important day for the US Dollar as the US Consumer Price Index is released, followed later in the day by the Fed Interest Rate which will be accompanied by a FOMC Statement and a FOMC Press Conference. Almost always this cluster of events creates strong moves so caution is recommended.

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


GBP/USD

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

[Image: 20141215-20141221-Last-full-economic-wee...24x479.png]

Technical Outlook

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

Fundamental Outlook

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

Wednesday the result of the Monetary Policy Committee votes is made public, showing if the members’ stance regarding the interest rate has changed. The Claimant Count Change is released the same day, showing how many people applied for social help related to unemployment. The last important event of the week is the British Retail Sales, scheduled Thursday and as always, the US events will have a strong and direct impact on the pair’s movement.
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#70
FOREX TECHNICAL ANALYSIS: CHRISTMAS WEEK IS HERE, BRINGING IRREGULAR VOLATILITY


EUR/USD



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

[Image: 20141215-20141221-Last-full-economic-wee...24x479.png]

Technical Outlook

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

Fundamental Outlook

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


GBP/USD

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

[Image: 20141215-20141221-Last-full-economic-wee...24x479.png]

Technical Outlook

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

Fundamental Outlook

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