Bounce or Break Scenarios in Play, FOMC Minutes Eyed for Next Move
Forex News: Yesterday’s trading session was very slow, partly because the United States celebrated Independence Day and this generated thin liquidity.Technical Outlook
Although it was a slow session, the pair reached the support at 1.1340 and came very close to the 50 period Exponential Moving Average. This means that today we are faced with a “bounce or break” scenario and its outcome will determine the next short term direction: a bounce will suggest a resumption of the bullish trend, while a break of this support zone will open the door for a move into 1.1280.Fundamental Outlook
The FOMC Meeting Minutes will be released today at 6:00 pm GMT and will be the main event for the US Dollar. The document shows the details of the latest rate meeting and the reasons that generated the rate vote; usually the impact is very high if the Minutes contain hints about future monetary policy direction.
Similar to the other pair, the Cable showed slow and choppy movement yesterday. The British Construction PMI came very close to analysts’ forecast, so the release didn’t create a lot of volatility.Technical Outlook
The short term bias remains bearish for the time being and we expect to see an encounter with 1.2900 support. By the time price gets there, the 50 period Exponential Moving Average will probably climb and will form a confluence zone together with 1.2900. Confluence zones are tough to break but if price does move past them, this shows good momentum in the direction of the break, so maybe we will see an extended move into 1.2850. The overall bias is still bullish so we cannot rule out a quick move into 1.3000 area.Fundamental Outlook
The British Services PMI is the last in this week’s series and will be released at 8:30 am GMT, with an expected value of 53.6, similar to the previous 53.8. This is a survey of purchasing managers from the Services sector that acts as a leading indicator of economic health and optimism. Usually a higher number is beneficial for the Pound but if the actual reading matches the forecast, the impact is limited.