Last week was mainly dominated by the implementation of Tariffs, from both, the US on Chinese goods and China’s tariffs on US goods. As it was widely expected the FOMC did not offer any changes, and the nonfarm payrolls in combination with the disappointing hour earning was more than enough to push the dollar lower. This week on Monday, we are expecting the German trade balance marginally higher, on Thursday German Harmonized Index of Consumer Prices expected unchanged at 2.1%, French consumer prices index also unchanged at 2.4%, European industrial production expected to be higher at 1.1% much higher from last -0.9% and the US consumer price index expected higher at 2.9%. Finally, on Friday we are closely watching the Chinese trade balance and exports. From now on this number will influence directly the US dollar as they will be impacted by the tariffs implementation and it may have a negative impact in one of the world’s biggest economies, the Chinese.
Technically EURUSD is neutral to positive. As last week’s support of 1.1722 broke and hold, this is giving us a more positive view. We maintain an open buy position at 1.1734 targeting 1.1853 to take profit. We are bringing back the trading style of buying into dips. A new pending buy order could be placed at 1.1610 with take profit at 1.1853 trailing stop above 1.1722
Last week was a quiet week for GBP. Brexit ongoing negotiations continue to keep the pair in discount levels. This week on Monday, MPC Member Broadbent is speaking, he is known as a dovish member because of his worries about the UK’s weak consumption growth. A change from dovish to hawkish in his speech will have a positive impact on GBP. On Tuesday, Manufacturing production is expected higher at 0.3% compared to last reading of -1.4%. On Wednesday, the BOE’s Governor Carney will speak and hawkish speech is expected. Finally, on Friday, the MPC member Cunliffe is giving a speech in regards to wage growth, which as usual, shall keep a neutral position regarding the interest rates decisions. All MPC’s speeches will play a major role on the direction of GBP this week.
Technically the pair is neutral. Therefore, we maintain open positions buy at 1.3365 take profit at 1.3471 and position buy at 1.3223 take profit at 1.3471 with trailing stop above 1.3310
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