EURUSD

 

EURUSD resume advance during last week’s trading sessions, even though ECB did not release any hawkish statement during their minutes. By the end of the week on Friday pair gave back some of the gains, mostly because of some profit taking off the table and because of renewed fears of Trump’s order to implement new tariffs on Chinese products. For this week we start our economic calendar on Monday, with the European CPI index expectation at 2%, unchanged from last reading. Any uptick will push pair even higher as this is the biggest actor behind ECB’s normalization plan. On Wednesday, ECB’s president Draghi will speak. On Friday, European Markit Manufacturing PMI expected to remain unchanged and U.S. Markit Manufacturing PMI also unchanged. A fundamental reason for new down side move is hiding behind this week’s trading session: “FED’s interest rate increase”. As markets are expecting a rate hike by the end of the month this may push trader to preposition ahead of the event and this will result to a downside move on EURUSD.

 

Technically the pair in neutral. Our traders continue to trade the Fibonacci chart, using the last one year’s trading style “buying into the dips”. A retracement from 1.1740 down to 1.1630 (23.6%) was expected. Our traders start buying at 1.1630 (23.6%) and we expect them to continue buying at 1.1548 just below the (38.2%) targeting once again profits around 1.1740

 

 

GBPUSD

 

Pair continue trading higher last week as traders turned positive from all fundamental factors surrounding GBP. Last week’s UK CPI came at 2.4% just above BOE’s target. BOE’s Carney show support for Sterling pointing that even if Brexit result will be a hard one with no deal, will continue increasing interest rates. Both Brexit camps are showing understanding and perfect communication and this result in positive outcome week after week. On the economic calendar for this week we have on Wednesday, UK retail sales with expectations at 3.4%, higher than last 3.2% and CPI marginally higher at 2.5%.

 

Technically the pair is positive. A retracement on the downside at 23.6% Fibonacci level on the 4H chart it was expected as traders are taking some profits off the table. On the 1H chart, Fibonacci is pin pointing some buying entry levels for the traders using the buying into dips style. We are expecting traders to start buying at 1.3022 (23.6%) and 1.2954 (38.2%) targeting profits above 1.3140

 

 

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