Forex News: Long-term Resistance Threatened. US Dollar Struggles to Recover Weekly Losses
Forex News: The European Manufacturing and Services surveys released yesterday showed optimism among purchasing managers and this contributed to the pair’s climb into the key resistance at 1.1860, generating another bullish session.
The bulls are now facing an important resistance zone represented by 1.1860 and 1.1875. Also, the pair has travelled a long distance to the upside without a proper retracement and the Relative Strength Index is approaching overbought territory. These reasons make us anticipate a drop that will possibly find support at 1.1825. If the pair moves above 1.1875 without retracing first, expect the upside to be limited and a pullback to follow.
The German IFO Business Climate will be the day’s only notable release, scheduled at 9:00 am GMT. This is a survey with a very large sample size of about 7,000 businesses that asks respondents to give their 6-month outlook for the economy and to rate current business conditions. The expected reading is 116.6, almost unchanged from the previous 116.7 and usually a higher number strengthens the Euro but to a limited extent.
The pair dropped close to 1.3280 support yesterday after the British GDP failed to surpass expectations. However the losses were quickly erased, mostly due to US Dollar weakness across the board.
The resistance at 1.3320 represents the top of the long term range and is a key level for long term movement, a fact which makes us believe that price will struggle to break it and that we will see a retracement lower from here. The first potential support is located at 1.3280, where we expect bullish action to resume.
The economic scene is light today for the Pound, without any important data releases. The technical aspect will decide the pair’s direction unless surprising events take place.
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.