Forex News: Yesterday price action slowed down but overall the pair had a slightly bullish bias, climbing above 1.1775 resistance. The economic scene was calm, without a major impact on direction.
Today we expect to see a continuation of the bearish momentum started Friday by the better than expected Non-Farm Payrolls report and we consider yesterday’s price action just a normal retracement after a strong move. If the pair descends below 1.1775, the first target will become 1.1713 – 1.1700 but it must be noted that an uptrend is still in place, so if 1.1775 rejects price, we may see a move closer to 1.1875.
The day ahead is light in terms of economic releases, with the only notable indicator being the U.S. JOLTS Job Openings, scheduled at 2:00 pm GMT. As the name suggests, this report shows the number of open jobs, excluding the farming sector but its impact is usually low-to-medium; however, a higher number shows increased economic activity and strengthens the US Dollar. Today’s forecast is 5.66 Million, very similar to the previous 5.67 Million.
After a small bounce, the pair moved lower and approached the psychological level at 1.3000. The trading session was slower but it looks like the US Dollar is winning the short term battle.
For today we expect to see a touch of the key support located at 1.3000 but after that, the chances of a move up will increase because the Relative Strength Index is approaching its 30 level for the second time in a very short while. A break of 1.3000 would mean a great victory for the bears but even if it happens today, the extent of the move down should be limited and followed by a retracement that will clear the oversold condition of the RSI.
We don’t have any important economic indicators on the Pound’s calendar, so the pair’s direction will be mainly decided by the technical aspect and the U.S. data.