Forex News: Friday price action slowed down and the pair retraced to test 1.1400, turning it into support. Overall the fundamental scene was calm, with positive data for both currencies but nothing to really shake the market.
After coming very close to the key resistance at 1.1450, the pair moved lower and found support at 1.1400. Price is likely to continue higher after the bounce at support but if the minor resistance around 1.1435 cannot be easily broken, we may experience a drop below 1.1400. Today we expect to see either a slow, ranging session or a bearish bias but overall the pair is clearly bullish.
The U.S. Manufacturing PMI will be released at 2:00 pm GMT and expected to show a value of 55.0. The survey acts as an indicator of optimism and usually a higher number is beneficial to the US Dollar but the impact is not always notable.
After a dip below support, the Pound rallied again and closed last week above the key psychological resistance at 1.3000, helped by US Dollar weakness seen across the board.
Friday the pair reversed an earlier drop and is now trading above the important level at 1.3000, a fact that opens the door for a move into the long term resistance at 1.3050. The Relative Strength Index and Stochastic are still overbought and this means that upside movement should be limited and possibly followed by a drop. It is very likely to see a ranging session because Mondays are often slow days but if BOE Governor Carney shows a hawkish stance, we may get another push higher.
The Pound’s movement will be influenced by the British Manufacturing PMI, scheduled at 8:30 am GMT. Similar to the U.S. indicator with the same name, this survey can strengthen the currency if it posts a higher reading than today’s forecast of 56.4.
At 12:00 pm GMT, Bank of England Governor Mark Carney will speak in Frankfurt at the Financial Stability Board. The impact of this speech depends on the matters discussed and Carney’s attitude but as always when heads of central banks speak, caution is recommended.