Forex News: Trading was mostly bearish yesterday after the pair made an unsuccessful attempt to break resistance. Price briefly climbed above 1.0945 but the bulls couldn’t sustain it.
The overbought condition of the Stochastic combined with the resistance at 1.0945 proved to be a good enough reason for price to fall but it must be noted that the support at 1.0870 is breached but not yet decisively. If today the sellers manage to keep price below this level, we anticipate a touch of 1.0800 but a quick bounce above the level might invalidate such a scenario and will make 1.0945 the new target.
There are no major economic releases scheduled for the day ahead so the main focus will be on the technical aspect.
Yesterday the bulls finally decided to step in and managed to take price above the immediate level of importance. However, the bears soon took over and at the time of writing the pair is trading below 1.4565.
The bullish move seen yesterday is considered just a correction and doesn’t signify an end of the downtrend. Furthermore, the last four hour candle has a long upper wick (shows rejection) and has descended below the previous support (1.4565), which is now resistance. The target for today is the previous low at 1.4495 but more upside movement is not out of the question.
The British Manufacturing Production is scheduled for release at 9:30 am GMT and anticipated to increase 0.1% (previous change -0.4%). The manufacturing sector is of great importance to the British economy and this indicator shows changes in the overall value of the output of the said sector, so a higher number is usually beneficial for the Pound.
At 3:00 pm GMT, NIESR will announce a Gross Domestic Product Estimate which usually has a mild impact on the Pound, with higher numbers triggering strength. The previous value was 0.6% so anything above that is considered bullish.