Forex Technical Analysis: Yesterday the German Flash Manufacturing PMI came out better than expected but the Euro strength generated by this event was short lived and soon the pair dropped to touch 1.3300 resistance again.
Technical Outlook
The latest move to the downside, below 1.3400 shows us that the bears still have some steam left and the uptrend may be reversing. On the other hand, after yesterday’s touch of 1.3300, price immediately started to rise, indicating bullish strength. This makes us believe that both sides are almost equally balanced and the pair’s movement should be considered ranging, not trending. It is likely that price will remain between 1.3300 and 1.3400 today but the fundamental aspect can prove this prediction to be wrong.
Fundamental Outlook
The most important event of the day is the release of the US New Home Sales numbers, scheduled for 2:00 pm GMT and expected to decrease from the previous 497K to 487K. An even lower number than the anticipated one suggests that fewer new houses are bought by Americans and that the economy is slowing, because usually such a purchase is made in times of good economic conditions.
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