Selling Pressure Increases, US Dollar Remains in the Limelight
Forex News: The Dollar bulls stepped in early in yesterday’s trading session and managed to break 1.1700 once again, taking the pair close to 1.1650 support. Later the Euro erased some of the losses and the pair climbed above the previously broken level.Technical Outlook
After the failed attempt to break 1.1775 and the 50 period Exponential Moving Average, the pair dropped through 1.1713 1.1700 and came close to 1.1650 support. This shows increased bearish pressure but the quick return above the zone creates a mixed picture, where control doesn’t clearly belong to either side. However, our view remains mostly bearish as long as the pair is trading below the 50 EMA and we anticipate a move into 1.1650.Fundamental Outlook
The day’s only notable release is the Preliminary version of the University of Michigan Consumer Sentiment. This is a survey that tries to gauge the opinions of consumers regarding current and future economic conditions; higher numbers usually strengthen the US Dollar because if consumers are confident in economic conditions, they are likely to spend more and this further boosts the economy. The time of release is 2:00 pm GMT, the expected number is 94.0 and the impact is typically medium.
The British Retail Sales exceeded expectations and this created temporary Pound strength, taking the pair into 1.2900 but the move was quickly reversed and 1.2850 support was touched again.Technical Outlook
Overall yesterday’s trading session was characterized by bounces at support and resistance. Now price is touching resistance for a second time in a very short period and if this move doesn’t translate into a bullish break, we will probably see a move below the support at 1.2850 and a touch of 1.2815. On the other hand, a move above 1.2900 will probably take the pair close to the 50 EMA but as long as price is trading between support and resistance, the pair is in a range from a short term perspective.Fundamental Outlook
The Pound has a light day ahead, without any important releases, thus the pair’s direction will be decided by the technical aspect and the U.S. survey mentioned earlier.