Forex check: Market movers

Highlights

 

  •  Market Movers: Weekly Technical Outlook
  •  The New Troika in Town: Inflation, Treasury Yields and the USD
  •  ECB: Getting Closer to Policy Action      
  •  Look Ahead: Stocks
  •  Look Ahead: Commodities
  •  Global Data Highlights

 

Market Movers: Weekly Technical Outlook

 

Technical Developments to Watch:

  •          EUR/USD may bounce from 1.3675 support, but bias remains bearish below 1.3785
  •          GBP/USD testing previous-support-turned-resistance at 1.6840
  •          USD/JPY back at key 101.00-50 support area – will we finally see a break?
  •          GBP/JPY in play - near-term resistance at 171.25, support at 169.50

 

* Bias determined by the relationship between price and various EMAs. The following hierarchy determines bias (numbers represent how many EMAs the price closed the week above): 0 – Strongly Bearish, 1 – Slightly Bearish, 2 – Neutral, 3 – Slightly Bullish, 4 – Strongly Bullish.

** All data in this section as of approximately 14:00 GMT on Friday **

 

EUR/USD

The EUR/USD extended its drop last week amidst mostly negative data out of the Eurozone, including a disappointing Flash PMI report. From a technical perspective, the pair broke below previous support at 1.3675 midweek to trade at a new 3-month low in the mid-1.3600s. As you would expect, the MACD is trending lower beneath its signal line and the “0” level, showing clear bearish momentum. However, the Slow Stochastics are in oversold territory, suggesting that a bounce or more consolidation may be required before the pair takes another leg lower. That said, our bias remains to the downside as long as the EUR/USD stays below previous-support-turned-resistance at 1.3675.

  • EUR/USD continued lower last week, reaching a new 3-month low in the mid-1.36s
  • MACD still bearish, but Slow Stochastics in oversold territory
  • Bias remains to the downside for a test of 1.3585 as long as 1.3675 resistance holds
 

GBP/USD

  • GBP/USD rallied back above 1.6840 on Wednesday after 12-year highs in retail sales
  • MACD still shows bearish momentum
  • Bias neutral for now, with strong resistance at 1.70 and support at 1.6840

The GBP/USD continues to frustrate bulls and bears alike as rates oscillate around 1.6800. Last week, a stellar retail sales report drove the pair back above the 1.6840 level, but bulls were unable to build on the momentum and rates finished the week essentially unchanged. Looking to the secondary indicators, the MACD is still showing bearish momentum, and the Slow Stochastics are far from overbought or oversold territory. Taking all of the evidence together, our bias for GBP/USD is neutral heading into this week, with traders watching out for resistance at 1.70 and support down at the key 1.6840 level.

 

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