November 22, 2017 Facebook  twitter  Google+
Volatility Picks Up as Banks Re-open After New Year Celebrations
 
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EUR/USD

Forex News: Yesterday’s trading session belonged to the bears and we saw the pair descend below 1.0525 and below the 50 period Exponential Moving Average. Some banks around the globe were closed due to New Year celebrations, so volume remained relatively low.

Technical Outlook

The move below the 50 period EMA seems fragile and 1.0460 may turn into support. If this is the case, we will probably see a bounce above the moving average and possibly another test of 1.0525 but it must be noted that conditions still haven’t returned to normal so we may get a choppy trading session, with sharp reversals and irregular price movement. As long as the pair is trading below the 50 EMA, our bias is slightly bearish.

Fundamental Outlook

At 1:00 pm GMT we take a first look at German inflation with the release of their Preliminary Consumer Price Index. The forecast is a 0.6% increase from the previous 0.1% and if this prediction comes true or of higher numbers are posted, the Euro is likely to strengthen against its counterparts.

Later in the day, at 3:00 pm GMT the U.S. Manufacturing PMI is released, showing the opinions of purchasing managers from the manufacturing sector regarding business conditions in said sector. Higher numbers than the forecast 53.7 show optimism and usually give a boost to the US Dollar but the impact is often limited if the actual number comes close to the forecast.

 

GBP/USD

The US Dollar strengthened against the Pound as well yesterday and the pair dropped below the 50 period Exponential Moving Average, completing a bearish but choppy trading session.

Technical Outlook

The current bearish impulse might extend into the support at 1.2250 but we don’t expect this move to complete during the course of one day unless surprising developments take place. The level at 1.2325 may turn into resistance but we don’t exclude the possibility of a move above it because the trading environment is still affected by the start of the New Year and liquidity is low. Caution is still recommended.

Fundamental Outlook

The British Manufacturing PMI is released today at 9:30 am GMT and is expected to show a value of 53.3, almost identical to the previous 53.4. This survey acts as a leading indicator of economic health, with higher numbers strengthening the Pound but usually the impact is mild if the actual number is close to analysts’ prediction.

 
03-January-2017
 
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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