Forex News: Fresh US Dollar Selling Pressure Sends the Pairs Flying. Resistance Threatened
Forex News: The German political scene was one of the catalysts behind the pair’s push above the 50 period Exponential Moving Average seen yesterday. The US Dollar weakened on concerns regarding the long awaited U.S. tax reform bill.
The pair has climbed above the 50 EMA with strong bullish momentum and is now testing the resistance at 1.1825. If this level will be broken, we expect price to climb into 1.1875 region where the Relative Strength Index will probably become overbought, signalling a retracement. If 1.1825 will reject price lower and the bulls cannot keep it above the 50 EMA, we will probably see a return into 1.1735 during the days to come.
The German IFO Business Climate survey will be today’s highlight for the Euro, showing the opinions of about 7,000 businesses about a 6-month outlook for economic and business conditions in Germany. The time of release is 9:00 am GMT and the expected reading is 117.6; higher numbers show optimism, strengthening the single currency but the impact is low-to-medium.
On the US Dollar side the most notable release will be the Building Permits, scheduled at 1:30 pm GMT. This is a good indicator of future activity in the construction sector and usually a reading above the forecast 1.28M (annualized number) strengthens the greenback.
US Dollar weakness was the main driver of yesterday’s price action. The pair erased most of the losses incurred Friday and is now trading above the 50 period EMA once again.
As seen from yesterday’s price behaviour, the pair doesn’t have a clear bias and all moves are reversed even if they look strong at first. Two levels are key for medium term movement: the support around 1.3320 and the resistance at 1.3450. As long as price is trading above the 50 EMA we expect it to reach 1.3450 but until one of the key levels is broken, out bias is mostly neutral.
The Pound has a light economic day ahead, without any major releases scheduled. Price action can be affected by Brexit negotiations so the pair remains high risk.
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.