“No news is good news”. This week the lack of news in the US and the heavy European economic calendar may help the pair to continue its recovery started last week. We have seen the pair recovering from its recent drop last week as the US CPI came out softer than was expected. Apart from that, we believe that all hawkish speeches from Fed officials are now priced-in. On Monday, we have two fed official speaking, Mrs. Mester known as a hawkish member and Mr. Bullard a dovish member. On Tuesday, German and European preliminary Gross domestic Product is expected to remain unchanged at 2.4% and 2.5%. US retail sales are pointing lower at 0.4% down from last month’s 0.6%. On Wednesday, German Harmonized Index of consumer prices is expected to remain flat at 1.4% and European consumer price index flat at 1.2%.
Technical analysis indicates that the EURUSD is neutral. Taking into account the above mentioned fundamentals, and in combination with technical level rejection of 1.1820 from last week, we can start buying into the dips once again. First Buy order can be placed at 1.1900, take profit 1.2372, trailing stop above 1.2000.
Bulls will resume control over the pair this week as we have seen the MP’s maintaining their voting (7:2) in last week’s BOE meeting. With no news from the USD counterparty and a strong Average Earnings release on Tuesday, the pair may target for higher levels and recover from its recent drop. Claimant count is also expected to be down to 3.5k down from last months 11.6k. ILO unemployment rate is down to 4.1% from the last reading of 4.2%. Important news will be the inflation report hearings as this is the main concern for the future monetary path of BOE.
Technically viewed, the pair is neutral. Recovery can take place at this level, a rejection of an old resistance acting now as strong support at 1.3500, is giving us a technical recovery level from the recent drop. A buy order can be place at 1.3500, take profit 1.3700, trailing stop above 1.3600.
*The material does not contain an offer of, or solicitation for, a transaction in any financial instruments. 10TradeFX accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representationor warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.
10TradeFX is a trade name of Holiway Investments LTD(hereinafter the "Company”) is a registered Cypriot Investment Firm authorised and regulated by the Cyprus Securities and Exchange Commission (hereinafter the "CySEC”) with license no. 248/14. "Contract for Differences” (CFDs) are usually leveraged products. Trading Over-The-Counter (OTC) CFDs related to commodities, Forex, Indices and Shares, carries a high level of risk and can result in the loss of all of your investment.