Forex News: Price Action Resumes for the First Trading Day of 2018
Forex News: Yesterday the market stood still as people around the globe celebrated the New Year, so we pick up where we left off Friday, right on the ley resistance at 1.2000.
Price direction is difficult to predict because the markets are still under the influence of low trading volumes. Strictly from a technical point of view, the Relative Strength Index is deep in overbought territory and the pair is showing rejection after the move above 1.2000. This suggests that a move lower will follow, so it’s possible to see a descent into the previous level at 1.1945 – 1.1950.
The pair will not be affected today by any notable economic releases and this may be another reason for irregular price action.
Yesterday the pair did not move due to New Year celebrations so today we will get a fresh start with the first trading session of 2018.
The near-touch of 1.3550 resistance combined with the overbought position of the Relative Strength Index triggered a rejection lower that brought price very close to the psychological level at 1.3500. If this level will be broken, the pair might continue towards 1.3450 but keep in mind that trading volume is still not back to normal and this may translate into irregular or choppy price action.
The British Manufacturing PMI will be released today at 9:30 am GMT, showing the opinions of about 600 purchasing managers about business conditions in the Manufacturing sector. It acts as a gauge of optimism and higher numbers than the forecast 58.0 usually strengthen the Pound but today’s impact is difficult to anticipate.
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.