FOREX NEWS: PRICE CONFINED IN A TIGHT RANGE. BREAKOUTS ARE EXPECTED
Forex News: The pair bounced between support and resistance yesterday, following a lower than expected Euro Zone Consumer Price Index value. The session was mostly dominated by the bulls but for the time being, speculation about the ECB decision has a high impact on the market.
The support at 1.3585 is still holding and the same is true for the resistance at 1.3650 as we are experiencing the almost perfect example of a ranging market. Even if support or resistance is broken today, an extended move in the direction of the break has a low probability of occurring as traders seem reticent to commit to either side of the market. The economic data released throughout the day will most likely have a hefty impact.Fundamental Outlook
Today is the first day of the G7 Meetings which are attended by central bankers and finance ministers from the member states. Depending on the matters discussed (which include the Russian – Ukrainian crisis), increased volatility is likely to be present. At 12:30 pm GMT the ADP Non Farm Employment Change is released, showing changes in employment numbers. The report is released by a privately owned company and tries to mimic the Government issued data which comes out 2 days later. The estimated figure is 217K while the previous number is 220K and usually, higher values are beneficial for the US Dollar.GBP/USD
United Kingdom’s Construction PMI showed a disappointing value yesterday and reversed an early rally which took price above 1.6750 resistance.Technical Outlook
Price is hugging the level of 1.6750 and movement is slow, especially for a major pair. This price action holds no clues for future direction and the same applies to the Relative Strength Index which is moving sideways. Of immediate interest is the current level of 1.6750 and probably the first strong move away from it will dictate the next short term direction.Fundamental Outlook
At 8:30 am GMT the United Kingdom releases the Services PMI which is a leading indicator of economic health focused on the services sector and based on the opinions of purchasing managers. The expected value is 58.3, a decrease from the previous 58.7 and higher values usually strengthen the Pound. As always, the US events will have a direct impact on the pair.