2014.02.10 :Forex Technical Analysis: Bulls struggling to continue last week’s momentum
EUR/USD
Forex Technical Analysis: Last week the pair’s direction has been highly influenced by the Fundamental aspect: ECB President Mario Draghi made positive comments regarding signs of economic recovery, strengthening the Euro and the US Non Farm Payrolls posted a worse than anticipated value, weakening the greenback.
Technical Outlook
Price bounced higher after a touch of 1.3480 and moved into the strong resistance zone created by the confluence of 1.3650 and the down trend line drawn from last year’s high. This is a potential turning point which could bring sellers into the market and make 1.3480 the first target to the down side but US Dollar weakness generated by the Non Farm Payrolls report combined with Euro strength may generate an extended move into 1.3710 resistance. At the moment there are no clear signs of a reversal to the down side, just a strong resistance zone ahead.
Fundamental Outlook
The first important event comes Tuesday in the form of Fed Chairwoman Janet Yellen’s testimony on the Semiannual Monetary Policy Report in Washington DC and is followed Wednesday By Mario Draghi’s speech at the European Monetary Institute Conference in Brussels. Both speeches can create strong moves, depending on the matters discussed and the attitude of the participants.
Thursday the US Retail Sales are released, showing the change in the volume of sales made at retail level compared to the previous month. Since retail sales represent about two thirds of the entire consumer spending, the indicator has a high impact on the pair. Friday the German Gross Domestic Product is announced; being an economy’s main performance gauge, it has the potential to affect the Euro strongly, pushing it higher if better values are shown and weakening it if the numbers don’t meet expectations. Later in the day the University of Michigan will announce the US Consumer Sentiment which is a leading indicator of consumer spending.
GBP/USD
Last week Bank of England kept both the Interest Rate and the Asset Purchase Facility value unchanged and the main market mover was the US Non Farm Payrolls report which weakened the US Dollar and allowed the pair to move higher.
Technical Outlook
On a Daily chart we can notice an almost perfect bounce off the support level located at 1.6250 which confirms once again the strength of this level. The first important resistance is located at 1.6600 but we don’t anticipate price to travel such a long distance to the north; bullish moves are very probable during the week to come but we still consider the medium term direction is controlled by the bears and this makes another touch of support a high probability scenario.
Fundamental Outlook
The only Pound affecting event of the week is Wednesday’s release of the Bank of England Inflation Report which will be accompanied by a Press Conference held by Governor Mark Carney and other Monetary Policy Committee members. The Inflation Report contains the Bank’s expectations regarding inflation and economic growth for the next two years and will most likely strengthen the Pound if it contains a positive outlook. Of course, the US events mentioned earlier will have a direct impact on the pair’s direction.
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.
Skype : gdmfxindonesia
Indonesia Email Support: indo.support@gdmfx.com