FOREX NEWS: CAN THE BULLS FINISH THE WEEK IN TOTAL CONTROL?
Forex News: Yesterday’s trading session was characterized by a very small retracement lower followed by a move higher and a continuation of the previous bullish momentum. The Monthly Bulletin released by the ECB did not generate sharp moves, mainly because it didn’t show any surprising data.
Even if the bulls’ strength is obvious, we expect a stronger retracement to the down side, considering the severely overbought condition of the Relative Strength Index. This retracement will most likely find support at 1.3830 where a bounce higher has a high probability of occurring. To the up side, the first major resistance level is located at 1.3965.Fundamental Outlook
The first event of the day is the release of the German Consumer Price Index which is estimated to decrease from 1.2% to 1.0%. Inflation highly influences the ECB decision regarding future interest rates and higher than anticipated values have the ability to strengthen the Euro. The release is scheduled at 6:00 am GMT.
Later in the day, at 12:30 pm GMT the United States will announce the Producer Price Index which is expected to change from -0.1% to 0.1%, a fact which would strengthen the US Dollar. The economic week finishes with the release of the US Consumer Confidence, scheduled at 1:55 pm GMT and anticipated to increase from the previous 80.0 to 81.2. Confidence among consumers is highly correlated with consumer spending so better numbers for today’s release will most likely strengthen the greenback.GBP/USD
United Kingdom’s Interest Rate remained unchanged at 0.50%, a fact which was anticipated by market participants and didn’t generate a lot of volatility. However, the pair moved lower during the day and almost touched the support located at 1.6750.Technical Outlook
Yesterday’s retracement didn’t manage to bring the Relative Strength Index below the 70 level so the market is still considered overbought, a fact which favors moves south. If such moves will occur today, the level of 1.6750 will act as good support and will probably push price higher, for another attempt to break 1.6822 resistance. The bulls are clearly in control of the pair so moves higher can occur without retracements lower.Fundamental Outlook
The Pound has a calm day ahead in terms of economic news releases so the pair will be influenced by the US indicators mentioned earlier and by technical factors.This post has been edited by GDMFX: Apr 11 2014, 11:44 AM