FOREX NEWS: FOCUS SHIFTS ON THE UNITED STATES AS EUROPEAN BANKS TAKE A BREAKEUR/USD
Forex News: German Unemployment rose during the previous month as shown by yesterday’s release, helping the bears to break 1.3615 minor support. Almost the entire day was controlled by sellers and it seems like the bulls’ power is waning almost completely.Technical Outlook
The Euro is weakened lately by disappointing economic data and by speculation that ECB might cut rates on their next meeting; all this tilts the balance in favor of the bears and we consider that further downside movement is in order. The first support and target for the pair is 1.3560 and we consider it can be touched today but a lot depends on the US data that is due for release.Fundamental Outlook
German and French banks are closed today due to Ascension Day so European economic releases will lack completely. However, an important US event takes place: the release of the Preliminary Gross Domestic Product which usually has a hefty impact on the US Dollar and can strengthen it if better values are posted. The event is scheduled at 12:30 pm GMT and the expected figure is -0.6%, a decrease from the previous 0.1%. At 2:00 pm GMT the US Pending Home Sales are announced and expected to decrease from 3.4% to 1.1%; if this decrease comes true, the US Dollar will suffer because the housing market is an important part of the US economy.GBP/USD
The Pound was affected yesterday by speculation that an interest rate hike is still far away but the technical aspect also played an important role in the sharp drop which broke through support.Technical Outlook
The bears dominate medium and short term momentum and extended moves to the downside have a high chance of happening. Nonetheless, we must pay attention to the oversold condition showed by the Relative Strength Index and must be wary of retracements higher which are likely to occur after such a sharp drop as the one experienced yesterday. With that in mind, our bias is negative and we anticipate a touch of 1.6680 support while the previous important support (1.6750) might turn into resistance.Fundamental Outlook
Today is another day which lacks important economic releases for the Pound so price direction will be influenced by the US events and by the technical aspect.