Forex News: Surprisingly the pair moved lower Friday, even if the U.S. employment report showed that less jobs than analysts expected were created. Profit taking by the bulls and an overall upbeat sentiment surrounding the U.S. economy contributed to the move south.
The climb was halted by the resistance zone around 1.1210 (a level better seen on the Daily chart) and now the Stochastic and Relative Strength Index are moving out of overbought territory, heading down. These factors could very well generate a bearish day (although the main bias is bullish) and for that to happen, the minor support at 1.1110 must be broken. Resistance still sits at 1.1210 and a break of this zone would imply that further upside action is next.
The German Industrial Production is today’s only notable release but the indicator usually has a low impact on the market. Nonetheless, higher values are beneficial for the Euro since the indicator tracks changes in the total value generated by the industrial sector and a higher output shows a thriving, active economy. The time of the release is 7:00 am GMT and the expected change is 0.2% (previous -0.3%).
Friday was bearish for the Pound-Dollar despite a worse than expected NFP and this goes to show that the greenback still has underlying strength so the downtrend is still active, although severely weakened.
The resistance at 1.4650 rejected bullish movement on a couple of occasions last week so we can assume that now price is heading down, possibly resuming the downtrend. For that to happen, the support established at 1.4475 as well as the 50 period Exponential Moving Average must be broken; if this is the case, next we will probably see a move into 1.4350. To the upside, the first minor barrier is 1.4565, followed by 1.4650.
The United Kingdom didn’t schedule any economic releases or other major indicators today, thus price direction will depend on the technical aspect.