Forex News: Bulls Make a Push for Resistance. Market Still Range-Bound
Forex News: U.S. consumer sentiment data disappointed Friday, allowing the Euro bulls to take price above the 50 period Exponential Moving Average and into the resistance at 1.1670. The pair posted fresh weekly highs but it didn’t exit the ranging phase.
The latest impulse favours the buyers but in the past the pair had difficulties breaking the resistance around 1.1670 and now it’s facing the same level again. A long upper wick is clearly seen in Friday’s price action and this is a sign of rejection; also, the Stochastic is above its 80 level (overbought) and the Relative Strength Index is approaching overbought territory. All this could be indicative of a bounce lower from the current level and if this happens, the 50 EMA will be the first target, where the next direction will be decided. A move above 1.1670 will take price into 1.1700 but we don’t expect a break of that hurdle.
The economic calendar is light today for both currencies, without any notable releases, thus the technical aspect will decide market direction.
British Manufacturing Production increased 0.7% as opposed to the expected 0.3% and this was one of the reasons for Friday’s climb. Price bounced lower late in the session but the short term bias favours the bulls.
Although the latest momentum is bullish, the pair is still in a range from a longer term perspective and this means that we could very well see a move down from the current resistance (1.3225). To the downside the first notable level is 1.3175 (previous resistance that may turn into support), followed by the 50 period Exponential Moving Average. We don’t expect huge moves today, unless something surprising happens.
Similar to the Euro and US Dollar, the Pound will not be affected today by economic data releases and this may translate in a slow, ranging session.
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.