FOREX NEWS: ENDING THE WEEK ON A HIGH NOTE WITH U.S. NON-FARM PAYROLLS
EUR/USD
Forex News: The pair had another bullish day yesterday and broke through resistance but action clearly slowed down and now signs of rejection are present. Draghi’s speech went mostly unnoticed and did not generate substantial movement.
Technical Outlook
The resistance at 1.0800 was breached yesterday but the pair slowed down soon after moving past the level. However, we maintain our bullish bias and still anticipate a touch of 1.0850, where a deeper retracement will occur but the overbought condition of the Stochastic must be noted; although this is a lagging indicator, it warns of a potential pullback so we don’t exclude a drop into 1.0770. Today’s price direction will be mostly influenced by the fundamentals, which will overshadow the technical side.
Fundamental Outlook
The most important U.S jobs data of the month is released today at 1:30 pm GMT: the Non-Farm Payrolls (also known as the Non-Farm Employment Change). The report tracks changes in the number of employed people and acts as a leading indicator of consumer spending (people with jobs tend to spend more). The forecast is a change of 170K and higher numbers usually generate US Dollar strength; volatility is almost always high at release and price action may be irregular.
GBP/USD
The Pound weakened substantially yesterday, after the release of the Inflation Report and Carney’s press conference. Support was broken and now the pair is testing the 50 period Exponential Moving Average.
Technical Outlook
After the failed attempt to break 1.2675 the pair dropped to touch the 50 period Exponential Moving Average but it must be noted that an uptrend is still present so at the moment this is considered just a retracement. If the 50 period EMA is broken and then a lower high is formed, the uptrend will be in serious jeopardy and we may see a full scale reversal; the current level at 1.2550 is support and in confluence with the moving average it will create a strong barrier.
Fundamental Outlook
At 9:30 am GMT the Services Purchasing Managers’ Index is released, showing opinions about business conditions and the overall health of the sector; the anticipated number is 55.8 and higher values strengthen the Pound but the highlight of the day will be the NFP release, which will directly affect the pair.
We hope you had a profitable trading week and we wish you a relaxing weekend. |