FOREX NEWS: A CALM END TO A WILD WEEK?
Forex News: The data released yesterday was mixed but more hints about a rate cut emerged as ECB officials signaled that the Bank is preparing a package of monetary policy measures. The Euro dropped but later in the day it managed to erase all Dollar gains, creating a massive reversal.
It looks like the bulls have renewed their interest for the pair, a fact which is normal considering the oversold condition of the market and the bullish divergence present on the four-hour chart. Once this retracement is complete, we expect price to resume downwards movement for another break of 1.3700 en route to 1.3640. The first level of interest that could provide resistance is located at 1.3745.Fundamental Outlook
The greenback will be affected today by the release of the US Building Permits, an indicator which shows changes in the annualized number of permits issued during the preceding month. An increase suggests a thriving economy, considering that houses are usually built in times of good economic conditions. The release is scheduled at 12:30 pm GMT and the estimated number is 1.01M compared to the previous 1.0M.
The last important indicator of the week comes out at 1:55 pm GMT: the US Consumer Sentiment. This is a survey which acts as a leading indicator of consumer spending and has the ability to strengthen the US Dollar if better numbers than the anticipated 84.7 are posted.GBP/USD
The bears unsuccessfully attempted yesterday to break the support at 1.6750 but the bulls managed to finish the day higher, on the back of US Dollar weakness.Technical Outlook
Yesterday’s bullish move can be seen as a retracement in a short term downtrend but from a Daily chart perspective, we are still in an uptrend and the pair just touched the uptrend line drawn from November last year. In other words, the picture is not clear and different time frame charts say different things. What is certain is that support is still holding at the moment and the confluence zone created by the uptrend line and 1.6750 will be tough to break but if price moves below it, the bears will score a major victory.Fundamental Outlook
The Pound has a calm day ahead as no major indicators are released by the United Kingdom; price direction will be influenced by the technical aspect and by the US events.