Forex News: Price action driven by fundamental factors
EUR/USD
Forex News: After piercing through the resistance located at 1.3710, the pair bounced back Friday, creating a sharp reversal pattern which was rather difficult to trade.
Technical Outlook
At the moment the pair is confined between 1.3650 and 1.3710 and we expect it to remain within these two levels if the economic indicators released today will not show surprising numbers. If the bulls make another attempt to break 1.3710 but don’t succeed, it would suggest that momentum is starting to fade away and moves lower are probable.
Fundamental Outlook
The German Ifo Business Climate is released today at 09:00 am GMT with an anticipated increase from the previous 109.5 to 110.2. The indicator is a survey based on the opinions of about 7,000 German businesses regarding the current and 6-month outlook and is considered a leading indicator of economic health. Later in the day, at 3:00 pm GMT the US New Home Sales numbers come out, showing how the US housing market performs. An increase in the number of houses sold suggests a thriving economy and can potentially strengthen the US Dollar. The anticipated number is 457K while the previous was 464K.
GBP/USD
The pair dropped sharply Friday after moving to the upside for the entire last week and the trading session was almost completely controlled by sellers who took price almost 200 pips lower.
Technical Outlook
Although the pair climbed strongly during the last period, Friday’s sharp drop is a potential sign of reversal. The break above the resistance located at 1.6600 was a false one as price soon returned below it and now the short term uptrend is weakened, making 1.6440 a level to watch. A touch of this level may result in a bounce higher, signaling that Pound is still strong and the uptrend may resume.
Fundamental Outlook
The United Kingdom didn’t schedule any major news releases for today so price action will be influenced by the US event mentioned above and by technical factors.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.
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