Forex News: Volatility Picks Up, Direction Still Unclear
Forex News: Yesterday’s trading session was pretty slow, mostly due to the lack of economic data and the fact that the United States celebrated Labor Day. The bias was lightly bullish but the pair remained in a 50 pip range for most of the day.Technical Outlook
Volatility is likely to pick up today but for the time being the pair lacks a clear direction and both oscillators are somewhere in the middle of their respective range, showing a lack of momentum. Price is trading above the 50 period Exponential Moving Average and above the bullish trend line seen on the chart above. As long as these forms of support hold, our bias is slightly bullish but a break of the confluence zone created by the trend line, the 50 EMA and the support at 1.1875 will probably trigger a stronger move south.Fundamental Outlook
At 2:00 pm GMT the U.S. Factory Orders will be released, showing changes in the total value of orders placed with manufacturers. The expected value is 3.3% (previous 3.0%) and usually a higher number strengthens the USD but the impact is low to medium. Several FOMC members will deliver speeches during the day but the impact cannot be accurately anticipated.
Similar to the EUR/USD, the Cable had a slow and ranging day. The British Construction PMI showed a lower than expected value and this briefly weakened the Pound but the losses were soon erased.Technical Outlook
Yesterday’s trading session doesn’t offer many clues about future movement but as long as the pair is trading above the 50 period Exponential Moving Average, our bias is bullish. During the latest period the pair made a higher high and a higher low, which is a characteristic of an uptrend but as seen from latest price action, momentum is lacking in the short term. It’s very possible to see a touch of the 50 EMA and the way price behaves there will offer more clues about future direction.Fundamental Outlook
The British Services PMI will be released today at 8:30 am GMT, showing the opinions of purchasing managers from the services sector about business conditions in said sector. It acts as a leading indicator of economic health and optimism, with higher numbers strengthening the Pound to a limited extent. The forecast for today’s release is 53.5.