Forex News: Bears Break Support. The US Dollar Starts to Regain Its Momentum
Forex News: The ADP Non-Farm Employment report came very close to the anticipated value, so the release did not have a major impact. However, the US Dollar continued to drag the pair lower, generating a bearish session with only brief moments of upside movement.
Yesterday the pair broke 1.1825 decisively and is now finally out of the horizontal channel that confined it (1.1875 – 1.1825). This means that the bears are in control of short term price action and possibly that we will see a move closer to 1.1735. Until price gets there, we will surely see retracements to the upside but as long as price is trading below 1.1825, our view is bearish.
Today is a slow day for both currencies and the only notable event will be a press conference held by ECB President Mario Draghi. The conference will be presented by the Bank for International Settlements and held at the European Central Bank, in Frankfurt. The impact is hard to anticipate but caution is recommended.
Bearish action continued yesterday and the pair reached the next support. Most of this behavior was due to Pound weakness generated by Brexit concerns.
The break of the confluence zone created by 1.3410 and the 50 period Exponential Moving Average can be considered a big victory for the bears, and we expect to see an extended move lower, towards 1.3320. The current level (1.3360) is a minor support but it rejected price higher yesterday, so we may see a push into 1.3410 and the 50 EMA but we don’t expect that resistance zone to be broken.
The Pound has a slow economic day ahead, as the United Kingdom didn’t schedule any major data releases.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 7-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.