With the lack of market-moving data Tuesday there is not much news to report, with the exception that traders suffered some losses as the euro and pound entered calmer waters and traded choppily sideways. The euro traded comfortably below 1.0630, making no effort to overcome that short-term resistance. From a technical perspective, the EUR/USD may possibly format a double top pattern now after having rejected the 1.0625-level twice. With that in mind, the 1.0480-level becomes increasingly important. Once that support level is successfully broken through, we expect bearish momentum to accelerate, driving the euro lower toward 1.04 and 1.0330. On the other side, if the pair is yet able to break through 1.0630 and furthermore 1.0660, the bias might change from bearish to bullish.
The GBP/USD provided no profitable trading opportunities yesterday as the pair traded consolidated between 1.22 and 1.21. With the 1.21-support still being unbroken, the technical picture has not changed. If the pound breaks significantly above 1.22 we see a next resistance at 1.2220/50 while a break above 1.2275 may reinvigorate bullish momentum towards 1.23 and 1.2350. Sterling bears should however focus on a break below 1.2080.
The Forex market may prove more volatile today in the light of upcoming events such as the press conference held by U.S. president-elect Donald Trump as well as Bank of England Governor Carney's testimony. Trump will hold his first official press conference since being elected President which is scheduled for 18:00 UTC. While there is a high degree of uncertainty surrounding Trump's future plans for the economy, market participants are looking for details on his policy preferences.
BoE Governor Carney is scheduled to testify before the U.K. Parliament's Treasury Select Committee at 14:15 UTC. While the Brexit issue is putting the BoE in a difficult position, any comments on the future monetary policy outlook could have a major impact on the pound. Furthermore, U.K. Industrial and Manufacturing Production figures, due at 9:30 UTC could lend a short-term support for the pound.
Here are our daily signal alerts:
EUR/USD
Long at 1.0585 SL 25 TP 20, 40
Short at 1.0520 SL 25 TP 20, 35
GBP/USD
Long at 1.2225 SL 25 TP 20, 40
Short at 1.2145 SL 25 TP 20, 40
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.
