Forex News: Resistance Holds, Bearish Pressure Increases. Can the US Dollar Make a Comeback?
Forex News: US Dollar weakness persisted throughout yesterday’s trading session and the pair reversed an earlier drop that found support near the 50 EMA. The German IFO Business Climate survey came slightly below expectations but the impact wasn’t major.
Currently the pair is testing 1.1825 resistance for the second time in a short while but the latest candle is showing a long wick in its upper part, which is a sign of rejection. If the current resistance cannot be broken, we expect to see a drop through the 50 period Exponential Moving Average and a move closer to 1.1735 in the near future. The pair is in a range, so we expect choppy price action until a clear breakout occurs.
At 3:00 pm GMT the US Existing Home Sales will be released, showing how many houses were sold during the previous month, apart from new buildings. The indicator usually has a low-to-medium impact but higher numbers than the forecast 5.53 Million (annualized number) can strengthen the US Dollar.
The Pound bulls failed to keep the pair above the 50 EMA, so yesterday’s trading session was mostly controlled by the bears but price action remained choppy.
The failure to continue upward after the initial break of the 50 period EMA shows that bearish pressure is increasing and that we will most likely see a touch of 1.3320 support. The pair remains in a range from a longer term perspective and today’s direction will probably be influenced by the testimony of BOE Governor Carney.
At 1:15 pm GMT, Bank of England Governor Carney will testify before the Treasury Select Committee on the topic of the November Financial Stability Report. The event is likely to generate increased volatility, so caution is advised.
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.