EURUSD continues advancing from last week as economic data came in positive on the one hand and on the other hand the persisting US dollar weakness has helped the pair pushing it higher. By the end of the week the pair gave back some profits as the Salzburg EU/UK meeting outcome was completely disappointing. This week the picture may change, and the advance will be halted for now as the FOMC meeting on Wednesday is pointing for a rate hike of 0.25. In other economic events, on Monday the IFO business climate is expected to remain unchanged at 103, on Thursday, the German Harmonized index of consumer prices is expected to be unchanged at 1.9%, and later during the day the U.S. Gross domestic product is expected to also be unchanged at 4.2% while Core personal consumption expenditures are pointing to a higher reading of 2.2% and durable goods orders at 1.7%, which is much better than the previous negative 1.7%. Finally, on Friday, the European consumer price index is expected to remain at 2%.
Technically the pair in neutral. Our traders continue to trade the Fibonacci chart, using the trading style “buying into the dips”. A retracement from the weekly close of 1.1754 down to 1.1674 (23.6%) is expected. Our traders are placing buy orders at 1.1674 (23.6%) and we expect them to continue buying at 1.1568 (50%) targeting profits around 1.1800
Bulls of this pair suffered some huge losses last week, a sharp retracement on Friday afternoon took place as the EU/UK Salzburg meeting failed to close an agreement as traders and investors had expected. Later a speech from PM Theresa May pushed the pair even lower after she said that the UK will propose a new Brexit deal plan and new discussion over the Irish boarder will take place soon. Uncertainty over Brexit once again overshadowed last week’s positive sentiment, and this resulted to a huge sharp downside move down to 1.3080 from 1.3300. In the coming week we may see some fresh lows mainly due to the FOMC meeting on Wednesday pointing to a rate hike of 0.25. On the economic calendar we have only Gross domestic product on Friday with expectations to remain unchanged at 1.3%.
Technically the pair is still positive. A retracement on the downside at 38.2% Fibonacci level on the 1H chart is giving traders new opportunities to start buying once again and targeting profits at 1.3300. Alternative if the pair continues to slide and close below this level (1.3055) it may accelerate losses and continue down to 1.2911 (61.8%) where bulls are expected to take control.
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