Forex News: Following the German Federal Elections, the Euro depreciated against the US Dollar and the pair had a bearish session yesterday, moving below support. However, price is still confined in a range and a clear trend is not in place.
The short term momentum belongs to the bears and the pair is trading below the 50 period Exponential Moving Average but 1.1875 support is still holding at the time of writing. Once this level is broken, we expect a quick move into 1.1840, which is a more important level and a break would suggest that a downtrend may be developing. To the upside the first resistance is 1.1900, followed by the 50 period EMA.
The U.S. Consumer Confidence is today’s first event, scheduled at 2:00 pm GMT. The survey has a large sample size (about 5,000 households) and tries to gauge the respondents’ opinions regarding current and future economic conditions. The expected reading is 119.6 and usually a higher number shows optimism, strengthening the US Dollar but the impact is generally medium.
At 4:45 pm GMT, Fed Chair Yellen will speak in Cleveland at the National Association for Business Economics Annual Meeting. The title of the speech is "Inflation, Uncertainty, and Monetary Policy" and audience questions are expected, so depending on her answers, we may see increased volatility on USD pairs.
The pair remained in a range during yesterday’s trading session, mostly due to the lack of economic releases. No major developments took place and price action was choppy.
The pair is still capped by the resistance at 1.3616 and the support at 1.3450, with the 50 period EMA in close vicinity. Until we see a clear break of this horizontal channel, the direction will be unclear and the pair will continue to show range-bound behavior. A strong break of the confluence zone created by the 50 EMA and 1.3450 support would weaken the uptrend, thus increasing bearish pressure.
It’s a slow day for the Pound from an economic standpoint, without any notable releases. This may be another reason for ranging price action.