Forex News: Resuming bullish price action?
Forex News:Yesterday the pair ranged for almost the entire day and the Euro Group meetings didnít do much to change this behavior. Resistance is still holding and price is trading very close to it.
Recent price action doesnít offer a lot of hints about future direction but the resistance located at 1.3710 is still holding. However, this resistance level didnít reject strong movement and it didnít generate a bounce lower so we consider that it is pretty fragile and can be broken by a bullish impulse. Important data is released today so a direction will probably be established.
At 10:00 am GMT the German ZEW Economic Sentiment is released, with an anticipated decrease from the previous 61.7 to 61.3. The importance of this survey comes from the fact that it is derived from the opinions of about 275 German institutional investors and professional analysts who are asked to rate the 6 month outlook for the German economy. Due to the nature of their jobs, they are highly informed about the economic situation and can give an accurate assessment. Usually, better than expected numbers strengthen the Euro.
Poundís strength took the pair above the resistance located at 1.6750 but yesterday the much anticipated retracement lower finally occurred and the bears made their presence known.
The uptrend is still very strong and yesterdayís move lower is considered just a retracement which cleared the overbought condition of the Relative Strength Index, not a reversal. We expect trend resumption today but if price will stop in the resistance zone (1.6750), then maybe the strength of the bulls is exhausted and the bears will take over. The first potential support is located at 1.6665 and may push price higher if touched.
The United Kingdom Consumer Price Index is released today at 09:30 am GMT. This is the main gauge of inflation and it is also taken into consideration by the Bank of England when the interest rate decision is made. Values of the CPI which exceed a certain range may determine the BoE to adjust rates and although the current value of 2.0% is not expected to change today, volatility is likely to be present at the time of the release; usually higher than anticipated values strengthen the Pound.
Written by: Bogdan Giulvezan
The article above is based on the writerís 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
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