Week ahead 26th – 30th March
Last week EUR/USD continued to trade within the usual range of 1.2200-1.2350. As it was widely expected the rate hike in the US did not produce any significant change in the pair’s exchange rate. After careful analysis of the FOMC minutes an updated view of the pair leans towards bullish rather than “neutral-bullish”. As for the week ahead, we have another light economic calendar for the Eurozone, with only one major event on Thursday, the German Harmonised Index of Consumer Prices, which is expected to point higher at 1.5% compared to last month’s 1.2%. It is a short trading week for many European markets celebrating the Good Friday, meaning that liquidity will be dry and caution needs to be in place, especially on Friday. As for euro’s counterparty the US Dollar we will have Fed’s official speaking on Monday, Gross Domestic Product on Wednesday with expections to point higher at 2.6% up from last 2.5%, and finally core personal consumption expenditure on Thursday, expected to also be higher at 2% from 1.9%. A strong fundamental perspective must be taken into consideration when trading this pair, “The trade war” between the US and China will most probably overshadow any favorable economic events and push the US dollar lower.
Taking all the above fundamentals and in combination with the technical analysis the pair should continue to trade in range 1.2300 -1.2400 with increasing possibilities of ticking higher. Trading discipline to maintain a trading style of buying into dips should remain in place. First buy order (if not opened on Wednesday according to last weeks indication) is standing at 1.2280, take profit 1.2500, trailing stop above 1.2400. A strong buy is at 1.2200, take profit 1.2500, and a trailing stop above 1.2350.
One of the most critical weeks for the Pound ended up in an applause-able mode for GBP. Traders were caught sleeping on Monday, when European council announced that agreement with UK on a transitional period had been reached. Apart from that, a hawkish BOE pushed GBP even higher as it was widely expected. For this week we have only Gross Domestic Product to focus on Thursday, with expectations pointing to a higher reading of 1.5% up from last 1.4%.
Technically there maintains a bullish stance and traders should continue to buy into dips. This week, first buy placed at 1.4060, take profit 1.4200, trailing stop above 1.4150, and second strong buy order at 1.3923, take profit 1.4200, and a trailing stop above 1.4060