Forex News: Yesterday’s price action was mixed ahead of the Fed Interest Rate, and the pair climbed above resistance. The Fed kept the rate unchanged and highlighted that the pace of future rate hikes will remain data dependent; all this created mixed price action at the time of the release, without substantial moves.
Although the Fed Meeting didn’t create a strong impact, the pair is siting above 1.0870 which can be considered support now. The ranging period continues and price lacks clear direction but the Stochastic is approaching its 80 level which suggests an overbought condition and thus increases the chances of a move south. Such a move will be confirmed by a bearish break of 1.0870 and of the 50 period Exponential Moving Average.
Today we get a first look into German Inflation with the release of the German Preliminary Consumer Price Index, scheduled at 1:00 pm GMT. The expected change is 0.4% (previous 0.3%) and higher numbers usually strengthen the Euro.
On the US Dollar side we have the Durable Goods Orders scheduled for release at 1:30 pm GMT. The indicator tracks changes in orders for goods with a life expectancy of at least 3 years and under normal circumstances a higher value is beneficial for the greenback. The forecast is a change of -0.6%, while the previous was 0.0%.
The pair hit resistance yesterday and bounced perfectly off of it but the Fed offered mixed signals regarding future monetary policy and price is now stalling at support.
As seen from yesterday’s price action, resistance is holding and the bears are now struggling to break the support at 1.4230. A break of this level would suggest that the downtrend will continue, headed for 1.4125 and the current overbought condition of the Stochastic is supporting such a move. Our bias is bearish for the day, anticipating a break of support but a lot will depend on the British GDP data released today.
The British Preliminary Gross Domestic Product is released at 9:30 am GMT and is today’s main event for the Pound. This is the first and most important version out of the three (Preliminary, Second Estimate and Final) and usually has a strong impact on the Pound considering that the GDP is the overall gauge of the economy’s performance. The expected change is 0.5% (previous 0.4%) and higher numbers strengthen the currency.