The world’s most tradable pair continue to trade lower last week, the pair is under significant pressure mostly due to US/Turkish escalating relationship and new sanctions. As European investments in Turkey are highly exposed this might continue to pressure the EURO lower. By the end of the week, a sharp recovery in the pair was due to two reasons. Firstly: U.S. president Trump tweeted that “money is pouring into our cherished dollar like rarely before”. Secondly: the de-escalation of trade war between the US and China, was a clear message well applauded by the markets after the announcement that China’s commerce vice minister is meeting deputy secretary of state in order to discuss the trade relations between the 2 countries.
This week we have many major events that could renew the pressure on the downside for EURUSD. On Wednesday the FOMC will release the minutes for August, expectations are for a hawkish statement. On the other hand, the ECB monetary policy meeting account reports may show a relatively dovish approach after the latest geopolitical turmoil in Turkey. Starting on Thursday the 23rd, Jackson Hole Symposium will take off and continue during the weekend. In this event, investors will focus on the central banker’s speeches and the discussions surrounding the world’s economy and threats.
Technically speaking the pair are in a downside trend. Although pulling the Fibonacci retracement lines on a daily chart we can see a sharp retracement on the 100% matching the old resistance 1.1350 acting now as support. The pair is in an oversold territory and recovery is expected in the coming sessions. Our traders opened new long positions at 1.1350 and targeting profits at 1.1500
Last week’s economic calendar showed some advance for the UK economy, the pair manage to improve its outlook, although caution is needed before opening any new buy positions as the pair is dominated by Brexit talks and a renewed downside move could be in the cards. As mentioned above, this week Jackson Hole Symposium will take place and any declarations from FED or BOE will have the potential to moving the pair in either direction. Economic calendars offer nothing this week, so all eyes are once again on any new releases from Brexit talks.
Technically the pair is negative, although our traders are keeping open all buy positions and targeting profits above 1.3200. Pulling a Fibonacci retracement, we can clearly see that last week’s retracement took place just above the 100% at 1.2660 a price that was a strong resistance after Brexit vote digested and now acting as support.
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