GBP/USD 7 Oct 2013

United Kingdom’s economy is not growing at “a sustained pace” as BoE Governor Mark Carney commented last week and this was reflected in the market, generating the recent drop.

Technical Outlook

Early during Friday’s trading session we experienced an almost perfect re-test from below of the level located at 1.6170, followed by a bounce lower. The pair dropped almost 170 pips and the bears are in control at the moment, aiming for the first support, located at 1.5960. Today we expect a “clash” with this level which is very important for future direction as we may witness a trend reversal and a shift in the balance of power.

Fundamental Outlook

The United Kingdom doesn’t release today any major economic or financial data so the pair’s movement will mostly be driven by the technical aspect.

EUR/USD 7 Oct 2013

Forex Technical Analysis: The pair moved to the south for almost the entire duration of Friday’s trading session on the back of Euro weakness generated by a worse than expected German Producer Price index and the bears scored the first victory in a long time.

Technical Outlook

The level located at 1.3570 was broken to the down side and the sellers had the strongest day in a long while. If this bearish momentum will turn into a trend reversal, the first target is the support located at 1.3520. For today we anticipate slow price action, with a potential re-test from below of the recently broken level, followed by continuation of Friday’s bearish direction.

Fundamental Outlook

The Euro Zone Sentix Investor Confidence will be released today at 08:30 am GMT with an anticipated increase from the previous 6.5 to 10.9. This is a leading indicator of economic health based on the opinions of investors and analysts who are highly informed due to the nature of their jobs so higher than expected numbers usually strengthen the Euro.