2013.10.25 : The Forex Market: Increased probability of a bearish retracement.
EUR/USD
The Forex Market: The economic data released yesterday was mixed and with no substantial differences compared to the anticipated figures. This translated into a rather slow day, with no clear direction but price remained above the minor resistance located at 1.3790.
Technical Outlook
Although the pair is still advancing, its movement has definitely slowed and it appears the bulls are starting to fade away. Yesterday the minor resistance located at 1.3790 was broken to the upside but afterwards, price didn’t move as strongly as we would expect after a true break and that’s a sign that lower prices are a distinct possibility but keep in mind that the uptrend is still intact and the underlying strength still belongs to the bulls.
Fundamental Outlook
At 08:00 am GMT the German Ifo Business Climate indicator will be released, with a small increase anticipated, from the previous 107.7 to 108.2. This survey is highly respected mostly due to its large sample size of about 7,000 businesses and also due to the fact that the German economy is the backbone of the Euro Zone economy.
Later at 12:30 pm GMT the US Durable Goods Orders will be announced; these are goods with a life expectancy of at least three years and orders for this type of goods usually increase in times of economic prosperity because a larger investment is needed for such a purchase. The anticipated value is 1.7%, a hefty increase from the previous 0.1%.
GBP/USD
No major developments took place yesterday and the pair moved above and below the level of 1.6170 but neither the bulls nor the bears could impose their will in a decisive manner.
Technical Outlook
Yesterday’s price action provides little clue about future direction but at the moment, the pair is trading above 1.6170. Once price moves away decisively from this level we will probably see a break of either the resistance located at 1.6250 or the support at 1.6115; if this scenario unfolds, we will possibly see a continued move in the direction of the break but until then, this should be considered a ranging market.
Fundamental Outlook
United Kingdom’s Preliminary Gross Domestic Product is released today at 08:30 am GMT and its value is expected to increase from the previous 0.7% to 0.8%. Most components of the GDP are known in advance and this makes it easier to forecast the actual value but the importance of the release remains very high. Better than expected values are beneficial for the Pound and may take the pair higher.
We hope you had a profitable trading week and we wish you a relaxing weekend.
Written by:
Bogdan Giulvezan
The article above is based on the writer’s 4-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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