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  • GBP/USD – Double Bottom In Making For British Pound

    GBP/USD – Double Bottom In Making For British Pound

    • – The British Pound recently traded near 1.2200 twice against the US Dollar, but failed to break it.
    • – It looks like a double bottom pattern is forming near 1.2200, looking at the 4-hours chart of GBP/USD.
    • – In the UK, the PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics posted an increase from 52.8 to 54.2 in Dec 2016.

     

    UK Construction PMI

    In the UK today, the PMI Construction that shows business conditions in the UK construction sector was released by the Chartered Institute of Purchasing & Supply and Markit Economics.

     

    The market was expecting no change from the last reading of 52.8 in Dec 2016. The result was better than the forecast, as there was an increase from 52.8 to 54.2 in Dec 2016. Commenting on the report, the Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI, Tim Moore, stated “December’s survey data confirmed a solid rebound in UK construction output during the final quarter of 2016. All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014”.

     

     

    Overall, the market trend and sentiment are positive for the British Pound, which may lift it towards 1.2300 against the US Dollar.

     

    GBP/USD Technical Analysis

    The British Pound made a couple of downside moves, and tested the 1.2200 support area. The stated level acted as a barrier and prevented downside moves on more than two occasions. So, there is a chance that the GBP/USD is forming a double bottom pattern near the same area.

     

    GBP/USD Technical Analysis Pound Dollar

     

    The pair is already trading higher, and broke a bearish trend line on the 4-hours chart at 1.2250. Moreover, the pair is also above the 38.2% Fib retracement level of the last drop from the 1.2387 high to 1.2200 low.

     

    So, there is a chance that the pair may head towards the 50% Fib retracement level of the last drop from the 1.2387 high to 1.2200 low at 1.2293. If the British Pound buyers remain in charge and the double bottom pattern plays well, there can be more upsides with a possible test of 1.2300-10.

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  • EUR/USD – Euro Made Short-Term Top Vs US Dollar Near 1.0500

    EUR/USD – Euro Made Short-Term Top Vs US Dollar Near 1.0500

    • – The Euro recently recovered from the 1.0351 low against the US Dollar, and traded above 1.0450.
    • – The recovery could not last long as there was a failure just below the 1.0500 level in EURUSD.
    • – In the Euro Zone, the German GfK Consumer Confidence posted an increase from 9.8 to 9.9 in Jan 2016.

     

    German GfK Consumer Confidence

    Today in the Euro Zone, the German GfK Consumer Confidence, which is a leading index that measures the level of consumer confidence in economic activity was released. The market was aligned for no change from the last reading of 9.8 in Jan 2016.

     

    However, the result was better, as the German GfK Consumer Confidence posted an increase from 9.8 to 9.9 in Jan 2016. The report published highlighted positive points, and mentioned that “Economic expectations have increased slightly, while income expectations have seen significant growth. In contrast, propensity to buy has suffered moderate losses.”

     

    Overall, the result was encouraging, but it may fail to help the Euro to gain traction against the US Dollar for a break above 1.0500. In another release, the French Gross Domestic Product released by INSEE posted a growth rate of 0.2%, just as the market expected in Q3 2016.

     

    EUR/USD Technical Analysis

    The Euro declined heavily recently against the US dollar, and posted a new low of 1.0351 this week. Later, a recovery was started in EUR/USD, taking the pair above the 1.0450 level. The pair traded just below the 1.0500 at 1.0498 where it found sellers and moved down.

     

    EUR/USD Technical Analysis Euro Dollar

     

    During the downside move, the pair broke a bullish trend line on the 4-hours chart at 1.0440. Moreover, there was also a move below the 23.6% Fib retracement level of the last wave from the 1.0351 low to 1.0498 high.

     

    It looks like the pair has made a short-term top at 1.0498 and may decline further. A test of the 50% Fib retracement level of the last wave from the 1.0351 low to 1.0498 high at 1.0420 is possible. The 100 simple moving average (H4) is also positioned near the same level to act as a support in that case.

     

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  • GBP/USD – British Pound Struggle To Continue Vs US Dollar

    GBP/USD – British Pound Struggle To Continue Vs US Dollar

    • – The British Pound struggled a lot lately and traded below 1.2400 against the US Dollar.
    • – There is a bearish trend line formed on the 4-hours chart of GBP/USD, acting as a resistance at 1.2400.
    • – The UK Net Borrowing released by the National Statistics posted a reading of £12.210B in Nov 2016, more than the forecast of £11.300B.

     

    UK Net Borrowing

    The fundamentals were not good for the British Pound, which kept on increasing pressure. Today, the Net Borrowing figure was released by the National Statistics. The market was aligned for the amount of new debt held by the U.K. governments (the financial deficit in the UK national accounts) to post £11.300B in Nov 2016.

     

    However, the result was on the lower side, as the Net Borrowing came in at £12.210B in Nov 2016. It was also a lot higher when compared with the last revised reading of £4.324B.

     

    The report stated that “Public sector net borrowing (excluding public sector banks) decreased by £7.7 billion to £59.5 billion in the current financial year-to-date (April to November 2016), compared with the same period in 2015”. In short, there was nothing to cheer for the GBP bulls, which may ignite more losses in GBP/USD.

     

    GBP/USD Technical Analysis

    The British Pound this past week made a downside move and traded below a major support area of 1.2580. There was a bullish trend line on the 4-hours chart of GBP/USD at 1.2580, which was breached along with the 100 simple moving average.

     

    GBP/USD Technical Analysis Pound Dollar

     

    Later, the bearish momentum was increased, taking the pair below the 1.2400 support and the 200 simple moving average on the H4 chart. The pair traded as low as 1.2312. There was a recovery attempt made recently, but the upside was prevented by a bearish trend line formed on the 4-hours chart of GBP/USD at 1.2400.

     

    The pair is once again heading lower, and it looks poised for a test of 1.2310. There is even a chance of a break of the stated level for a full test of 1.2300. Any recovery from the current levels may face sellers near the 23.6% Fib retracement level of the last drop from the 1.2720 high to 1.2312 low.

     

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