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GDMFX - Weekly News
WEEKLY ANALYSIS: FRENCH PRESIDENTIAL ELECTION: ROUND TWO


EUR/USD


Weekly Analysis: Last week the Fed decided to keep the rate unchanged as expected, they didn’t give strong hints about a June hike. The employment data released Friday was better than anticipated but the previous number was revised lower and overall the US Dollar weakened, allowing the pair to climb.

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Technical Outlook

The previous week ended with price right on the psychological level at 1.1000. Usually the market reacts to big, round numbers and the Relative Strength Index is very close to overbought, so all this increases bearish pressure and might generate a move lower in the form of a pullback. However, it must be noted that the pair is in an uptrend, which was just renewed by the break of the previous high at 1.0945. If the psychological resistance at 1.1000 is broken easily, we expect the upside to prevail and the pair to move towards the next resistance, located at 1.1120.

Fundamental Outlook

Monday French banks will be closed in observance of Victory Day but the rest of Europe will do business as usual. The most important release of the day will be the German Factory Orders, an indicator that shows changes in the value of purchase orders placed with manufacturers. Keep in mind that Sunday the second round of the French Presidential Election takes place and we expect price action to be heavily affected throughout the beginning of the week.

Tuesday and Wednesday there are no notable releases on the schedule but action picks up a little Thursday with the U.S. Producer Price Index, an indicator that tracks changes in the price charged by producers for their goods. It has inflationary implications because a higher producer price ultimately leads to a higher consumer price, but the impact is not always notable.

Friday is a busy day for the US Dollar, with three important releases: the U.S. Consumer Price Index (a key gauge of inflation), the Retail Sales and the University of Michigan Consumer Sentiment, a survey that shows the opinions of about 500 consumers regarding economic and business conditions. Also Friday the G7 Meetings start, attended by central bankers from the 7 member states.


GBP/USD

Most of last week’s price action was ranging, with the pair trading closely above 1.2850. The strongest movement was seen Friday, on the back of U.S. employment data.

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Technical Outlook

The previous resistance at 1.2850 was tested from above and price bounced higher, thus we can now consider this level support. The pair is making higher highs and higher lows, indicating that it is currently in an uptrend, so we expect to see a touch of the next level of importance, located at 1.3050; 1.3000 is also important because it is a big, round number. The pair is likely to retrace lower when one of these levels is touched, but after said retracement, the uptrend will probably continue if key support is not broken.

Fundamental Outlook

The Pound has a lackluster week ahead, except for Thursday when the Bank of England will release their Inflation Report but will also announce the Official Bank Rate, the rate votes of the MPC members and the Monetary Policy Summary, outlining the reasons behind the votes. There’s no change expected for the rate (currently 0.25%) but this cluster of events is likely to trigger increased volatility. UK representatives will attend the G7 Meetings that start Friday.
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WEEKLY ANALYSIS: UPTRENDS LOSE MOMENTUM. US DOLLAR BACK ON TRACK?


EUR/USD


Weekly Analysis: Last week started strong for the bears, who managed to take the pair into 1.0850 support but most of the US Dollar gains were erased Friday on the back of disappointing U.S. data and rumors that the ECB may start to taper its quantitative easing.

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Technical Outlook

This week we will probably see another test of 1.1000 zone, as current momentum seems to belong to the bulls. If this resistance area can be surpassed, the next destination will become 1.1100 – 1.1120 but we have a slow economic week ahead and this may generate ranging movement, without major advances to either side. To the south, the first notable zone of support is the confluence between 1.0800 level and the 50 days Exponential Moving Average. A break of this zone may trigger an extended move down.

Fundamental Outlook

The first notable event of the week is the release of the Eurozone Flash version of the Gross Domestic Product, scheduled Tuesday and followed later in the day by the U.S. Building Permits. Wednesday we take a look at Eurozone inflation with the release of the Final version of the Consumer Price Index, which although is the least important of the three versions, can still generate strong movement.

Thursday we take a look at the U.S. Unemployment Claims, showing the number of people who asked for unemployment benefits during the previous week, but because this is a weekly indicator, it tends to have a low-to-medium impact. Friday is yet another slow day, without major economic releases, similar to the rest of the week.


GBP/USD

Price action was choppy last week, with a bearish bias that took the pair into the support at 1.2850. The Bank of England kept the rate unchanged and did not signal a hike in the near future.

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Technical Outlook

The move up started in March is overextended and in need of a deeper retracement. If 1.2850 support can be broken early in the week, we expect a quick move into 1.2770 and possibly into the 50 days Exponential Moving Average but it must be noted that an uptrend is in place as long as the pair is trading above 1.2770 and the Moving Average. The first major upper barrier is represented by the level at 1.3050.

Fundamental Outlook

The Pound will be affected by three important releases this week: Tuesday the British Consumer Price Index comes out, showing changes in the price that consumers pay for the goods and services they purchase. The indicator acts as the main inflation gauge and usually has a strong impact on the Pound.

Wednesday’s highlight is the Average Earnings Index, an indicator that shows changes in the price that businesses pay for labor and the last release of the week is the British Retail Sales, scheduled Thursday. Overall, we have a rather slow fundamental week all around but this doesn’t necessarily mean that volatility will be low.
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WEEKLY ANALYSIS: WHAT GOES UP MUST COME DOWN. IS THE BULL-RUN CLOSE TO AN END?


EUR/USD


Weekly Analysis: The pair showed massive bullish movement last week, broke several resistance levels and climbed for approximately 280 pips. US Dollar weakness seen across the board was the main catalyst behind the move.

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Technical Outlook

The immediate destination seems to be the resistance at 1.1240, where we expect to see a bounce lower, forming a retracement. However, we don’t expect this pullback to go below 1.1120 – 1.1100 and once support has been established, the chances of another push to the north will increase. If 1.1240 is broken, the next resistance is located 100 pips higher, at 1.1340. To the downside 1.1120 is the first support, followed by 1.1000 but currently the pair is in a clear uptrend so we favor the upside.

Fundamental Outlook

The pair has a slow start of the week, with the Eurogroup Meetings being Monday’s only notable event. Action picks up a bit Tuesday with the release of the German IFO Business Climate, a survey derived from a very large sample of about 7,000 businesses and focused on the respondents’ opinions on current business conditions as well as a 6-month outlook. On the US Dollar side we have the U.S. New Home Sales numbers, released later in the day.

Wednesday ECB President Mario Draghi will speak in Madrid at the First Conference on Financial Stability, organized by the Bank of Spain. Later that day the FOMC will release the Meeting Minutes, containing details of their last interest rate vote but also, possible hints about future rate hikes.

Thursday French and German banks will be closed in observance of Ascension Day and the trading week ends Friday with the U.S. Preliminary Gross Domestic Product, which is an economy’s main gauge of performance and an always-important indicator that can strongly affect the currency.


GBP/USD

The pair traded higher last week and climbed into 1.3050 resistance after a bounce off of 1.2850 support. The Pound benefited from positive economic data but also the US Dollar weakened against most of its counterparts and these facts combined generated the push into resistance.

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Technical Outlook

The first touch of 1.3050 triggered a fast bounce lower, which seemed to have 1.2850 as target; however, all the Pound losses were erased the next day and now the pair is testing 1.3050 again. A break of this important level would score another victory for the bulls and would open the door for a move into 1.3430. Keep in mind that we are talking about almost 400 pips so even if the target is reached, it probably won’t happen in a week unless surprising events take place. To the downside, 1.2850 is the first support, followed by 1.2770 and the 50 days EMA.

Fundamental Outlook

The Pound will only be affected by two major events this week. The first is the Inflation Report Hearing, scheduled Tuesday, when Bank of England Governor Mark Carney will testify on economic situation and inflation before the Parliament's Treasury Committee. The other event is the release of the British Second Estimate version of the Gross Domestic Product, scheduled Thursday.
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WEEKLY ANALYSIS: U.S. NFP DATA TO “MAKE OR BREAK” THE DOLLAR’S RECOVERY STARTED LAST WEEK


EUR/USD


Weekly Analysis: For the entire last week the pair consolidated below 1.1240 resistance and the bull run came to a halt, preparing the stage for a deeper move south. The economic scene didn’t present any market moving events and this contributed to the overall situation.

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Technical Outlook

Several Daily candles pierced 1.1240 resistance but failed to close above it, thus showing clear signs of rejection and making us anticipate a move lower, which will have 1.1120 – 1.1100 as first target. Despite the failure at 1.1240, it must be noted that the pair is still in an uptrend a significant low hasn’t formed yet. This means that a potential break of 1.1240 will probably take the pair into the next resistance, located at 1.1340.

Fundamental Outlook

Monday ECB President Mario Draghi will testify about the economy before the Economic and Monetary Affairs Committee. This is potentially a big mover for the Euro and will probably generate increased volatility. U.S. Banks will be closed, in observance of Memorial Day.

Tuesday the German Preliminary Consumer Price Index will be the highlight on the Euro side, while the US Dollar will be affected by the Consumer Confidence, a survey that acts as a leading indicator of consumer spending.

Wednesday we take a look at European inflation with the release of the Flash Estimate version of the Consumer Price Index and Thursday U.S. jobs data is released in the form of the ADP Non-Farm Employment Change, a report that shows changes in the number of employed people, excluding the farming sector and Government.

The week ends Friday with the most important U.S. jobs report: the Non-Farm Payrolls. Similar to the previous indicator, this one shows changes in the total number of employed people, excluding the farming sector but including Government jobs. Usually a number above expectations shows increased economic activity and strengthens the US Dollar.


GBP/USD

The Pound took a hit last week, dropping for more than 250 pips. Brexit concerns, including the approaching of the June 8 election and the ability of British Prime Minister May’s party to win that election, seem to be the main reason behind the drop.

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Technical Outlook

After failing to break 1.3050 key resistance, the pair dropped into the 50 days Exponential Moving Average and into the support at 1.2770. The way price behaves here will be very important for medium term direction because we are dealing with a confluence zone (two or more technical elements meet in the same place or close vicinity) and a break would show increased bearish pressure, making 1.2570 – 1.2550 the next destination. To the upside, 1.3050 remains the main resistance but a move into this level would have to be backed by strong fundamentals.

Fundamental Outlook

The Pound has a slow week ahead, which starts with the Spring Bank Holiday on Monday. No high-impact indicators will be released until Thursday when the Manufacturing PMI comes out, followed Friday by the Construction PMI. Both are surveys of purchasing managers from the respective sectors and act as leading indicators of optimism and economic health. Higher numbers usually strengthen the Pound but the impact is not always high if the actual number comes close to the forecast.
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WEEKLY ANALYSIS: A FULL WEEK AHEAD: BRITISH PARLIAMENTARY ELECTIONS, ECB RATE DECISION


EUR/USD


Weekly Analysis: Last week the bulls maintained control and managed to push the pair above 1.1240 resistance, helped also by a much worse than expected Non-Farm Payrolls reading.

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Technical Outlook

After a retracement and a perfect bounce at 1.1120, the pair moved back into 1.1240 resistance and this time the level was broken decisively. This means that the uptrend has resumed and price is on its way to the next resistance, located at 1.1340 – 1.1350. It must be noted that the Relative Strength Index and Stochastic have spent a lot of time in the upper part of their channels and although this is normal during an uptrend, it can also mean that a deeper pullback may soon follow. If price moves below 1.1240, it will encounter strong support at 1.1120.

Fundamental Outlook

French and German banks will be closed Monday in observance of Whit Monday, and this will probably affect volatility, generating choppy price action. On the US Dollar side we have the ISM Non-Manufacturing PMI, a survey of purchasing managers from outside the manufacturing sector, which acts as a leading indicator of economic health and optimism.

Tuesday and Wednesday are slow days for both currencies but action picks up Thursday when the ECB will announce their decision on where to set the interest rate and ECB President Draghi will hold the usual press conference, discussing the rate decision and answering journalists’ questions. Usually volatility surges during the press conference, especially if Draghi offers hints about future rate changes. The trading week will end with another day that lacks major releases on either side.


GBP/USD

The pair had a very choppy week but it showed that for the time being the US Dollar is not strong enough to break horizontal support or the 50 days Exponential Moving Average. The week lacked major economic releases and this contributed to the choppy action.

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Technical Outlook

Most of last week’s daily candles are small and with large wicks, which is a sign of indecision from both sellers and buyers. For the time being the 50 days Exponential Moving Average and the support at 1.2770 are holding, also the US Dollar was weakened by disappointing Non-Farm Employment numbers and all this suggests that the pair will climb towards 1.3050. However, it must be noted that this week the British Parliamentary Elections will take place and this will heavily affect the Pound, so the technical aspect will be secondary.

Fundamental Outlook

The first event of the week is the release of the British Services PMI, scheduled Monday; usually this survey creates volatility only if the actual reading differs from expectations. Probably the biggest movement on Pound pairs will be seen Thursday when the UK Parliamentary Elections take place. Caution is recommended throughout the day.

Friday the British Manufacturing Production is released, showing changes in the total value of goods generated by the manufacturing sector. Higher numbers usually strengthen the Pound but same as with the Services PMI, the impact is bigger if the actual reading differs from expectations.
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WEEKLY ANALYSIS: POUND ON SHAKY GROUND AFTER BRITISH PARLIAMENTARY ELECTIONS, US DOLLAR SHOWS SIGNS OF RECOVERY


EUR/USD


Weekly Analysis: Last week the ECB announced they’ve reduced inflation expectations for 2017 and the years to follow. This was the main reason for a drop seen Thursday but other than that, price action was choppy and without clear direction.

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Technical Outlook

The pair retraced after reaching a high at 1.1283 and moved below 1.1240, showing increased bearish pressure. The Relative Strength Index reached its 70 level several times during the last period, becoming overbought and showing bearish divergence (price is making higher highs while the oscillator is making lower highs). These facts, combined with the ECB stance on inflation, make us believe that the pair is headed lower, possibly into the 50 days Exponential Moving Average. The first hurdle is the support at 1.1120 but if price bounces higher from there, we may see another encounter with 1.1240.

Fundamental Outlook

The week starts slow, without any major indicators released on Monday but Tuesday action picks up with the release of the German ZEW Economic Sentiment and U.S. Producer Price Index. Both releases have the capacity to move the currencies strongly, but the impact is lower if the actual number matches expectations.

Wednesday will be a big day for the US Dollar because 3 major releases are scheduled: the U.S. CPI (key inflation gauge), the U.S. Retail Sales and the Fed will announce the interest rate which is expected to increase to <1.25% from the current <1.00%. All this is likely to generate increased movement on all US Dollar pairs, so caution is recommended.

Thursday is a slow day for both the US Dollar and Euro and the trading week ends Friday with the release of the European Final Consumer Price Index and the University of Michigan Consumer Sentiment, which is a survey that tries to gauge the confidence of consumers in economic conditions.


GBP/USD

The British Parliamentary Elections resulted in a hung Parliament, meaning that the Conservative Party won but didn’t manage to take enough seats to establish a majority. This triggered a sharp drop for the Pound and a break of several support levels.

[Image: Mcu1oj1.jpg]

Technical Outlook

Given the current political situation in the United Kingdom, the Pound is likely to continue to weaken and to head into the next support located at 1.2570. The pair is now trading below two important levels (1.2850 and 1.2770) and below the 50 days Exponential Moving Average so the bias is bearish from a technical standpoint as well as fundamental. However, this is still a high-risk pair and we recommend caution trading it.

Fundamental Outlook

The first important release for the Pound is the British Consumer Price Index, scheduled Tuesday. The indicator is the main gauge of inflation and shows changes in the price that consumers pay for the goods and services they purchase.

Wednesday’s highlight is the release of the Average Earnings Index, an indicator that shows changes in the price paid for labor by businesses and Government. The last major event of the week for the Pound is the announcement of the BOE interest rate, along with a Monetary Policy Summary, scheduled Thursday. As always, the U.S. events will have a direct and possibly strong influence on the pair’s direction.
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WEEKLY ANALYSIS: RANGE-BOUND TRADING CONTINUES AMID A LACKLUSTER FUNDAMENTAL SCENE


EUR/USD


Weekly Analysis: Last week’s main story was the Fed rate hike from <1.00% to <1.25% but also the hawkish Fed press conference. The positive vibe that surrounded the US Dollar reversed an earlier climb towards 1.1300 and brought the pair into 1.1100 territory.

[Image: I7FXkJ4.jpg]

Technical Outlook

After reaching a weekly high at 1.1295 the pair dropped close to 1.1120 support and now the greenback is benefiting from a positive market sentiment. We expect to see an encounter with 1.1120 and the 50 days Exponential Moving Average early in the week but the pair is still in an uptrend, so once the 50 EMA is reached, we may see another push to the north. However, as long as last week’s high is not broken, our bias is bearish, aiming for a move into 1.1000 territory. 

Fundamental Outlook

The week ahead is surprisingly slow in terms of economic releases for both currencies in the pair. Monday and Tuesday we don’t have anything major on the economic calendar, while Wednesday’s only notable release is the U.S. Existing Home Sales. A higher than anticipated reading shows a healthy house market and this usually strengthens the US Dollar.

Thursday the focus shifts on the Euro for the release of the Eurozone Consumer Confidence, a survey that gauges the opinions of about 2,300 European citizens regarding economic conditions. Friday the center stage is taken by Purchasing Managers’ Indexes, namely the German Services and Manufacturing PMIs as well as the Eurozone Services and Manufacturing PMIs. On the US Dollar side we have the New Home Sales, an indicator that shows the annualized number of houses sold during the previous month.


GBP/USD

The pair has just completed a very choppy week, with price bouncing all over the place, especially in the later part of the week. The Bank of England has kept the rate unchanged but 3 out of the 8 MPC Members voted for an increase and this generated Pound strength. 

[Image: X92HN69.jpg]

Technical Outlook

The last three Daily candles are showing long wicks and rejection at the 50 period Exponential Moving Average. This is a sign of indecision and lack of determination from both sides; the bulls cannot break the 50 EMA and the bears cannot take price lower. Due to these factors, our outlook is mostly neutral until a clear direction is established. However, it must be noted that the 50 period EMA and the level at 1.2770 form together a confluence zone of resistance, which may push price lower during the early stages of the week.

Fundamental Outlook

The Pound has an even slower fundamental week than the Euro and US Dollar, and the only notable indicator is the Public Sector Net Borrowing, scheduled Wednesday. The indicator shows the difference between spending and income for the Public Sector and a figure above zero indicates deficit, while a figure below zero shows excess. Lower numbers for this indicators are usually beneficial for the currency but the impact is often limited.
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