FOREX NEWS: A FULL DAY AHEAD – VOLATILITY IS LIKELY TO REMAIN HIGHEUR/USD
Forex News: Yesterday the pair finally decided to move with some determination and as a result, the level of 1.3700 was broken decisively. Volatility increased and hopefully it will remain this way.Technical Outlook
The break of 1.3700 and the fact that price touched 1.3650 make the picture bearish once again, but for the short term downtrend to be renewed, we need to see a clear break of 1.3650 support. If this occurs, the next hurdle is located at 1.3560, followed by 1.3480. Medium term movement seems to favor bears more and more but we expect bullish price action once the Relative Strength Index moves below its 30 level.Fundamental Outlook
The French and German Manufacturing PMIs are released today at 7:00 am GMT and 7:30 am GMT respectively. Both are surveys which ask purchasing managers to rate the current and future business conditions and are leading indicators or economic health; better than estimated values usually strengthen the Euro. The consensus for the French PMI is 51.1 while the German PMI has an anticipated value of 54.0.
At 2:00 pm GMT the US Existing Home Sales will be released, offering insights into the American house market. Although this is regarded as a high impact indicator, its effect can be mild at times, mostly depending on the difference between the expected value and the actual one. Today an increase is forecast, from the previous 4.59M to 4.71M.GBP/USD
The Pound strengthened substantially on renewed speculation that a rate increase might occur in the near future and on the back of a much better than expected value of the Retail Sales (forecast 0.4%, actual 1.3%).Technical Outlook
After the initial bullish impulse generated by the things mentioned above, the pair’s momentum started to fade away and price retraced lower. Immediately after the resistance at 1.6920 was touched, price reacted and this increases the importance of this level for short term movement; if 1.6920 resistance is broken, the door for a touch of 1.6996 is open and the uptrend may be renewed. For the time being, the most important support is located at 1.6820.Fundamental Outlook
United Kingdom’s Gross Domestic Product is announced today at 8:30 am GMT but is expected to remain unchanged from the current 0.8%; if this is the case, the release will have a mild impact but any changes can generate strong moves because the GDP is an economy’s main performance gauge.This post has been edited by GDMFX: May 22 2014, 12:39 PM