The never-ending debate of whether the fundamentals matter more or the technical levels, yet again shows that the technical levels matter a lot even if the fundamentals try to change the trend. Of course, a very critical fundamental can change the direction instantly but small to medium impact data do not really impact the trend if the technical levels are strong enough.
The euro has been gaining for the past few weeks where it is trading at multi-months high level where it gained by 25 pips today on Monday even though the German Trade balance and German Industrial production data showed a diminishing trend in the outcome.
Despite that, the pair remained firm as it was trading above its pivot point level and is strongly bullish and would remain safe to buy if it sustains above 1.3603 support level.
Analysts are expecting the pair to test the 1.3800 level once again after a long time, where it is easily possible within this week considering the bullish momentum the pair has.
The British Pound surprised the traders today where it bounced back up by 60 points and has breached its critical resistance level at 1.6370. The pair is currently trading at 1.6381 where it may test 1.6415 and 1.6437, provided it moves above the resistance level of 1.6394. Longing the pair right now is not a bad idea where small stop losses can be set at the 1.6330 support area.
However, BoE Governor Mr. Carney has a speech due today where investors may find some clue as to whether the interest rate change is possible at the moment or not. Volatility may arise during and after the speech, depending upon the statements he makes. The manufacturing production data for the month of October is due tomorrow, where the growth for the same is expected to fall to 0.4% from its 1.2% figure of September.
Those who cannot watch all these fundamentals but still want to trade, it is suggested to enter the market right now with small stop losses, where sellers can set their stop loss at 1.6405 and the buyers may set their stop loss at 1.6330.
To contact the reporter of this story: Jonathan Millet at email@example.com