FOREX NEWS: OVERBOUGHT MARKETS CALL FOR A RETRACEMENT
EUR/USDForex News: During yesterday�s trading session, the pair touched 1.3830 and US Dollar weakness generated by the release of the FOMC Meeting Minutes pushed price even higher. The Minutes showed that speculation of an early rate increase might be wrong, a fact which triggered the mentioned greenback weakness.
Technical OutlookThe market is controlled by the bulls and moves higher are anticipated. However, the Relative Strength Index is showing a severe overbought condition and this makes a move lower highly probable. The first level of interest to the down side is 1.3830 and if price will touch it, bullish movement is likely to resume.
Fundamental OutlookThe European Central Bank will release at 8:00 am GMT the Monthly Bulletin which contains information regarding the financial and economic data which was taken into consideration when the ECB decided at what level to set the interest rate. The Bulletin will also contain the Bank�s view on the current and future economic situation.
Some volatility may also be triggered by the G20 Meetings which take place today in Washington DC. One of the main subjects will be the Russia � Ukraine crisis, a topic which created strong movement in the past.
GBP/USDThe pair had slow movement ahead of the FOMC Meeting Minutes, but it started to pick up speed once the Minutes were released and price moved comfortably above 1.6750 resistance.
Technical OutlookThe clear break of 1.6750 opens the door for a touch and even a break of the year�s high located at 1.6822. Even if the momentum belongs to the bulls and the US Dollar shows clear signs of weakness, a dip lower is expected because the pair moved almost 250 pips without a retracement. Adding to this is the overbought condition of the Relative Strength Index so we expect a move into 1.6750 before price continues higher to touch 1.6822.
Fundamental OutlookThe Bank of England will release today at 11:00 am GMT the interest rate which is not expected to change from the current 0.50% but almost always volatility accompanies this event. The Asset Purchase Facility will be announced at the same time; no change is expected (currently the value is 375 billion Pounds) but a higher value usually weakens the Pound while a lower one is considered bullish. If the Rate or the Asset Purchase Facility is modified in any way, an official statement will be released by the Bank of England, explaining the reasons which determined this decision.
This post has been edited by GDMFX: Apr 10 2014, 12:56 PM
