Difficult Market Environment

Dear Traders,

The market environment is difficult for traders since global growth concerns and uncertainties about diverging monetary policies cloud the overall outlook. This uncertainty leads to risk-aversion,which can be seen in volatile but unsteady market swings. Both of our major pairs were lacking a clear direction yesterday and ended the trading day unchanged against the U.S. dollar. This meant that traders had to struggle with fake-outs and still have to be patient and wait for better market conditions.

Let’s have a look at the technical side:

EUR/USD

The euro was the worst performing currency recently and failed to provide profitable chances. On a monthly basis we see that the pair peaked at a high of 1.1460, but most of the period, it remained trading sideways between 1.1330 and 1.11. Those who are looking for long-term entries, should focus on the area above 1.1460/65 for buy orders and on the area below 1.10 for sell orders. For short-term investments, we still consider the 1.1280 level as an opportunity to buy the euro towards 1.1320/50. Short-entries, however, could be interesting below 1.1190 and below 1.1080. Remember that there is a key support at 1.1020.

Chart_EUR_USD_Daily_snapshot30.9.15

Today traders should watch the German Unemployment numbers, due for release at 7:55 GMT and the Eurozone CPI report, scheduled for release at 9:00 GMT.

GBP/USD

The British pound weakened eight consecutive trading days but found a slight support around 1.5130. The trend is our friend and we should bear in mind, that GBP may be vulnerable to further losses, but there could be a lower support area at around 1.5110 – 1.5090. If sterling declines significantly below 1.5130, we will focus on the 1.51-level, which could prompt the currency for a recovery. However, above 1.5210, chances are that sterling bulls drive the cable towards 1.5250 and 1.5285.

U.K. Gross Domestic Product is scheduled for release at 8:30 GMT today.

Chart_GBP_USD_4Hours_snapshot30.9.15

The most important piece of economic U.S. data will be the release of ADP’s employment change report (12:15 GMT). Market participants pay close attention to this report as it is considered to be a leading indicator for nonfarm payrolls.

Furthermore, FOMC members Yellen and Bullard are scheduled to speak on Community Banking today at 19:00 GMT.

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