Forex Signals Bull/Bear Calls For February 22, 2013

The pair did not test its 5-day SMA yesterday, as all the SMAs are contracting and forming a bearish pattern and the pairs hovering below all three SMAs. The bearish indication gets confirmed with the RSI reading too which is showing 37% and is moving well below the mid-level of 50%.

The upper, middle, and lower bands are also giving forex signals indicating bearish volatility in the pair, as the bands are expanding downwards and Euro is moving with the lower band.

The outlook is still bearish for the pair, where technical analyses show that if the pair breaks its support at 1.3134 then it would open the way to test 1.3100 and 1.3070. On the other side if it breaks and maintains a sustainable move above its daily pivot point of 1.3211, then it would attempt to test the level of 1.3267.

Fundamental Analysis

The manufacturing data for the Europe came out to be quite bad on Thursday that resulted in a sharp fall of Euro, but the pair gave retracement of around 70 points based on the the jobless claims for the United States that increased this past week.

Sentiment

57% Bearish

GBP/USD

Sterling did not test its 5-day SMA yesterday, while all three SMAS are expanding and continuing the bearish pattern, as the pair is travelling beneath all three SMAs. RSI is showing immense bearish strength with the reading of 25% which means a correction is required for the pair to adjust its RSI level.

The upper and the lower bands are expanding whereas the middle one is in the downward direction due to immense selling of GBP/USD in the past two days, as the pair is moving towards the lower band and the bears are still control.

The key levels to watch include its daily pivot point of 1.5215, breaching of which would lead the pair to test 1.5183 and 1.5131. While on the other side if it manages to move above yesterday’s high of 1.5272 then it would attempt to test 1.5325, breaking of which might lead to further correction till 1.5356.

Fundamental Analysis

Pound fell drastically in the London session on Thursday, later on it gained against the U.S dollar and gave considerable retracement, however the gloomy clouds over the economic outlook of U.K are still there that are causing the investors to remain bearish over the currency.

The industrial order expectations came out to be better than expected and improved to -14 in February as compared to -20 in January. Moreover, analysts are expecting the net borrowing in the U.K public sector for the month of January would be a deficit of around 11.2 billion pounds.

Sentiment

70% Bearish

XAU/USD (Gold)

Gold did not test its 5-day SMA on Thursday as the SMAs are expanding and continuing their bearish pattern, where the precious metal is hovering well below its all three SMAs. The RIS reading is 27% and is still below the support-level of 30%, where retracement is due for gold to adjust the RSI level.

The upper and lower bands are expanding with the middle band is shaping itself towards the downside, as the pair is hovering below the lower band with the bearish sentiment still in control.

Technical analysis show that the bias is still bearish and the metal could test 1565.06 and 1650.5 if it breaks its daily pivot point of 1572.53. Similarly, if it manages to break its resistance of 1580.37 then the bullish sentiment might come into place, leading the metal to test its 5-day SMA at 1586.56 the breaking of which would lead to the level 1590.18.