Forex Technical Analysis

Following seven straight gains on the euros to pounds pair, it was no great surprise on Friday to the forex markets to see the UK pound fight back a little as forex traders squared their positions ahead of the long weekend in the UK, and took some profits off the table. As a result the euro gbp pair closed the trading session with a wide spread down bar, but one which failed to engulf the previous candle of Thursday, suggesting that this was simply the market taking a breather, before moving on higher, rather than any longer term change in sentiment for the fx pair. However, before we assume that this rally will simply continue unimpeded, we are now entering a deep level of congestion which could provide a significant and impenetrable barrier to further progress higher. In simple terms for the move to continue we now need to see a strong move to breach this resistance, and break out to the top side, which would then provide a solid platform for a continuation from the 0.9100 region and beyond. However should the move run into problems, then we may see a correction and pullback as a result. With the UK markets closed on Monday for a national holiday, and with general thin trading volumes, we may have to wait for later in the week to see any meaningful price action unfold.

Fundamental Forex Analysis

As outlined above the UK forex market is closed on Monday so there is no UK fundamental news on the economic calendar, and the only news in Europe is relatively insignificant and covered in more detail on the euro vs dollar site.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Forex Technical Analysis

The euros to pounds pair pushed higher once again yesterday, ending the trading session with a wide spread up bar, with the closing price deep into the strong resistance area between 0.8750 and 0.9050 price band,  making this the seventh straight day of gains for the currency pair. However the resistance outlined above is significant and therefore it will not be a great surprise, given the fact that we are now approaching the weekend, to see a minor pullback today, as forex traders square positions ahead of the weekend and take their profits off the table. For the upwards momentum to be sustained we need to see a break and hold above the upper boundary in the 0.9050 region, and should this occur next week then we could see a move towards the next level at 0.9200.

Fundamental Forex Analysis

The key fundamental news item on the economic calendar for the euros to pounds pair for today is the Revised GDP data, due in the UK this morning, with a forecast of -0.8%, the same as for last time. This is the second release of the same data set ( three releases all together ) of which the Preliminary has the most impact as it is the first, followed by the Revised and then the final. Nevertheless, the news will have some impact this morning and should the actual be better than forecast then this could be good for the UK pound. The only other minor items are Index of Services and for the UK and Consumer Confidence in Europe ( yet more sentiment numbers if we didn’t have enough already!!), and further details are available in the economic calendar.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Forex Chart Analysis - Euro vs Pound 18th August 2009

Forex Technical Analysis

The euro to pounds chart is at an interesting point as following its recent reversal higher we are once again re-testing the 86.50 price handle where there have been no less than 8 previous attempts over the past 7 weeks.  The daily chart now looks bearish once again and given yesterday’s candle which closed as a shooting star, coupled with that of Friday, both of which have deep upper shadows, would suggest that we may see a fall in the euro in the short term and this may occur in the next trading session.   Whilst this move may only be a relatively small one it may well present us with a profit target of up to 200 pips as we move to re-test the 0.84 price support once again, with a repeat of the trading pattern last seen at the end of July and early August.

Forex Fundamental Analysis

The fundamental news on the economic calendar for the euro to pounds pairs started in the UK with CPI, Core CPI and RPI all of which came in marginally better than expected with the most important in the CPI figure at 1.8% against a forecast of 1.5%.  As deflationary concerns appears to have temporarily eased the Euro duly obliged by falling (as outlined above).  Meanwhile this pair now has to wait for the German ZEW Sentiment index, generally considered a leading indicator and is one of the most important used by forex traders and currency analysts.  The index is based on a survey of around 350 German institutional investors and analysts who are asked to rate the outlook for the German economy over the next 6 months.  The forecast for this morning is for a figure of 45.2, an increase over last month’s figure of 39.5 and if this comes in better than expected the impact is generally seen in the euro vs dollar currency pair.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.