FOREX NEWS: US RETAIL SALES BRING BACK VOLATILITY
Forex News: The pairís movement slowed significantly yesterday and price traded in a narrow range of less than 30 pips. A lot of this was due to the lack of economic data, combined with the fact that usually after strong movement, the market slows down for a while.
We expect action to pick up today and the market to resume the downwards movement seen last week, aiming for 1.3700 support. However, the Relative Strength Index continues to stay below the 30 level so the market is still oversold, increasing the chances of a move up which will most likely find resistance at 1.3790; the next resistance is located at 1.3830 but a touch of this level is not probable today.Fundamental Outlook
The first important event of the day is the release of the German ZEW Economic Sentiment which is scheduled at 9:00 am GMT and expected to decrease from the previous 43.2 to 41.3. Since this is a gauge of optimism among German investors and analysts, better than estimated numbers can push the Euro higher. A more important indicator is released at 12:30 pm GMT: the US Retail Sales. The anticipated change is 0.5%, compared to last monthís 1.2% and usually higher values strengthen the greenback because sales made at a retail level represent a major part of the entire economic activity.GBP/USD
This pair was slightly more active during yesterdayís trading session but overall we had ranging price action, characterized by an attempt of the bulls to take price above 1.6880.Technical Outlook
The failed attempt to break the resistance located at 1.6880 took the Relative Strength Index out of oversold territory, showing that bears still have underlying strength and that a new move south is in order. The target for this move is most likely 1.6820 and from a strictly technical point of view, it can be reached today but the US Retail Sales can prove to be a deciding factor.Fundamental Outlook
The United Kingdom didnít schedule economic data releases today so all eyes will be on the United States for the Retail Sales release.