U.S. Dollar Lost Momentum While The Pound Tends Toward Weakness
MaiMarFX | Sep 26, 2016 06:45AM ET
We welcome you to the last full-week of September, which offers plenty of economic data on the calendar. The U.S. dollar has lost momentum in the wake of the last FOMC monetary policy announcement despite hawkish rhetoric from Fed chair Yellen. This week the focus will once again be on Fed speak with a slew of Federal Reserve officials scheduled to speak throughout the week.
Yellen testifies before the House Panel on Wednesday and her remarks could boost market expectations for a 2016 rate hike. Investors put the probability of tightening in December at just 55 percent but in order to remain hawkish, economic data has to comply. The focus will therefore be on important U.S data such as Durable Goods Orders (Wednesday) and the final revision of second-quarter GDP figures (Thursday).
From the Eurozone, we have the German IFO report (today), German Unemployment figures (Thursday) and German and Eurozone Consumer Prices (Thursday, Friday) scheduled for release so the euro could show some reaction to incoming data. Furthermore, ECB President Mario Draghi testifies to German lawmakers on Wednesday.
EUR/USD
The euro is still confined to its recent trading range between 1.13 and 1.1130. We see a current resistance at around 1.1280 while a recent support was found at 1.12. Below 1.1190 chances are that the euro heads for a test of 1.11, whereas euro bulls should keep an eye on an upside break above 1.13.
GBP/USD
The British pound tested the lower bound of its recent trading range from where a small pullback occurred. Whether we will see further losses below 1.29 remains to be seen and could hinge also on investors' appetite for dollars. U.K. GDP figures are scheduled for release on Friday but no changes are expected.
Taking a look at the 4-hour chart we see a current resistance around 1.3060, the descending trend line. With no major market moving data we expect possible gains to be limited until that level, whereas the pound will need to break the 1.29-mark significantly in order to gain fresh bearish momentum.
Get The News You Want
Important economic data for today:
8:00 EUR German IFO Report
14:00 EUR Draghi speaks in EU Parliament
14:00 USA New Home Sales
(Time Zone UTC)
Here are our daily signal alerts:
EUR/USD
Long at 1.1260 SL 25 TP 20-30
Short at 1.1180 SL 25 TP 20, 40
GBP/USD
Long at 1.3010 SL 25 TP 20-30
Short at 1.2960 SL 25 TP 40
We wish you good trades and many pips!
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