Stronger than expected service sector activity helped to propel GBP/USD in today's trading. This is another case when UK services PMI report has a significant impact on the British currency. Never to be ignored by serious FX traders! According to the PMI report, service sector activity accelerated at its fastest pace in 3 months.It helped to offset the negative sentiment caused by the lower manufacturing and construction PMI reports
Cable tumbled on the back of slower construction sector growth. PMI services are scheduled for release on Wednesday and if service sector activity eases alongside manufacturing and construction, GBP/USD could break 1.24 and hit a new 2 week low. Weekly momentum supports lower prices. I expect GBPUSD to print fresh lows and correct back up towards 1.2500 area.
EURUSD has been trading lower for the last 5 sessions. The pair closed the day at 1.0667. The weekly momentum indicated the price topped at the resistance 1.0850, EURUSD tumbled and didn't look back since. I still expect the price to stage some kind of correction and re-test the resistance at 1.0750.
Probability of more hikes from FED were higher across the board. May remains out of the picture but June and July gained most confidence and spiked from 49 % to 63% and from 56% top 70% respectively. September was up by 10% and it is now reading 80%. November and December were slightly up too. Investors will be looking for a little bit more hawkish tone from FED this week to confirm rate hike expectations for 2017 and 2018. Given strong US data, FED might be looking into adding additional hike for 2017.
Posted in: Premium Fundamental Analysis,
Speculators added 4K fresh long positions and covered 7.6K shorts. The same theme prevailed over the last three weeks, where speculators are selling off their shorts and acquire new longs.In three weeks they opened 25K new longs and closed 25K shorts at the same time. It’s fairly strong bullish sentiment. They are 7.9K net short, lowest since May 2014. If this there continues, soon smart money will be net long in Eur Futures for the first time in 3 years.
Posted in: Commitments of Traders,
EURUSD is displaying some very bearish action right now. the continued downside today may be an extension of wave 'i' pink. Wave 'ii' should arrive soon setting up a bearish head and shoulders pattern off the recent high. Resistance lies at 1.0760, where the previous wave 'iv' lies, and the rise in wave 'ii' shoud be in three waves
Posted in: Premium Elliott Wave Analysis,
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