EUR/USD
Forex News: US Dollar weakness continued and the pair broke decisively above 1.1775, reaching highs last seen in 2015. The US Manufacturing PMI came very close to expectations, thus the impact was low.
Technical Outlook
The recent push above 1.1775 opens the door for a move into 1.1875, which is a level that last acted as support in 2010, when it rejected a strong drop. However, the level was reached more recently, in 2015 but the pair just moved through it without any type of bounce. If this level is reached today, we expect to see rejection there, mostly because the pair is overextended and the Relative Strength Index will probably become overbought by then. Retracements are very possible even before the pair reaches 1.1875.
Fundamental Outlook
Today at 12:15 pm GMT we take a first look at U.S. jobs situation with the release of the ADP Non Farm Employment Change, which is a report that tracks changes in the total number of employed people, excluding the Government and the farming industry. The forecast is 187K and usually a higher number strengthens the US Dollar but the impact is lower than the Government issued NFP which comes out Friday.
GBP/USD
British Manufacturing PMI fuelled the Pound and took the pair close to the resistance around 1.3250, giving us another session controlled by the bulls.
Technical Outlook
Although the pair is in an uptrend, the resistance at 1.3250 is likely to trigger a pullback lower. The relative Strength Index has been long overbought and is constantly showing bearish divergence (price is making higher highs while the oscillator is making lower highs or double tops). If the pair retraces lower, it may find support around 1.3160 but a lot of today’s movement will depend on the economic data.
Fundamental Outlook
The British Construction PMI will be released today at 8:30 am GMT, showing the opinions of purchasing managers about business and economic conditions in the Construction sector. This is a leading indicator of economic health, but its impact is high only if the actual number differs strongly from expectations. Today’s forecast is 54.2 and a higher number is usually beneficial for the Pound. The pair will also be directly affected by the ADP Non Farm Employment Change.