Forex News: Yesterday’s trading session was slow but slightly bearish after a bounce at 1.1960, which is now short term resistance. No major economic data was released and this contributed to the relatively low volatility.
The Relative Strength Index and Stochastic are both in overbought territory, warning that a move lower may soon follow. That being said, the pair is still showing upside momentum and yesterday’s ranging movement should be considered normal after a strong climb, not a sign of weakness. For today we anticipate another encounter with 1.1960 and if that barrier is broken, price will probably climb into 1.2000 where we expect a pullback.
Today we have another fairly slow economic day, with the CB Consumer Confidence being the only notable release. This is a survey with a large sample size of about 5,000 households, which tries to gauge respondents’ opinion regarding the overall economic situation in the United States. A higher than expected number shows optimism and usually strengthens the US Dollar but the survey is not known to be a major market mover. The scheduled time is 2:00 pm GMT and the anticipated value is 120.3.
The week opened with a bullish gap that was already closed during yesterday’s trading session and now price is trading close to the highs but below 1.2930 resistance.
The bulls kept price above the 50 period Exponential Moving Average yesterday and this may suggest that the upside move will continue into 1.2950 area in the near future. The Relative Strength Index and Stochastic are approaching overbought so we will likely see a pullback after a touch of 1.2950. To the downside, 1.2900 is the first support, followed by the 50 period EMA.
The Pound will not be influenced by economic data today, so the main price driver will be the technical aspect and the U.S. survey.