Breakouts Underway, Bulls Push Higher
Forex News: The Euro spiked higher yesterday afternoon and the pair moved above the 50 period Exponential Moving Average and broke the resistance at 1.1775. The move was mostly technical because no major economic data was released.Technical Outlook
The move above 1.1775 resistance marks the end of the consolidation phase that the pair was in and makes the short term outlook bullish. If the pair remains above 1.1775, we expect to see a move that will have 1.1840 as target but it is very likely to see a re test from above of the recently broken level (price returns to touch the level and then bounces higher). The two oscillators show good upwards momentum, thus increasing the probability of a climb to 1.1840.Fundamental Outlook
The German ZEW Economic Sentiment is scheduled at 9:00 am GMT and will be today’s highlight for the Euro. This survey shows the opinions of about 275 German professional investors and analysts regarding their 6 month outlook for the economy and acts as a leading indicator of optimism. Today’s forecast is 15.3, a drop from the previous 17.5.
Yesterday’s session was mostly bullish and the pair climbed after another perfect touch of 1.2850 support. At the time of writing the horizontal channel created by 1.2850 and 1.2900 is broken so the pair seems to be out of the ranging phase.Technical Outlook
Price is rapidly approaching the 50 period Exponential Moving Average, which is an important hurdle and if it can be surpassed, we will most likely see an extended move to the upside. Immediate resistance will be represented by 1.2930, followed by 1.2950 but if price bounces at the 50 EMA is, we will probably see a return inside the horizontal channel and more ranging movement will follow.Fundamental Outlook
At 8:30 am GMT the British Public Sector Net Borrowing is released, showing the difference between spending and income for the government and public corporations. A positive number indicates deficit and a higher number means a bigger deficit, so lower numbers usually strengthen the Pound. Today’s forecast is 0.4 Billion, lower than the previous 6.3 Billion.