EURUSD pair continues the downside move during last week’s trading session. With the Italians refusing to compromise on a more EU comply budget to the sell-off in Global equities and the persisted dovish Mario Draghi, it is all what the pair’s facing in the last few weeks. Unless the sell-off in Global market will find some relieve then the downside will not. The pair is still trading within a range and still retesting support of 1.1300 while it’s U.S. Dollar counterparty index DXY is also retesting resistance of 97. In both last cases we have seen a reversal. Friday before the closing bell we saw once again the same reversal on the same points. Will this reversal last and help the pair recover? It is something which will depend on next weeks’ economic calendar and Equity markets. Starting on Monday with U.S. Core personal consumption pointing to remain unchanged at 2%. On Tuesday, European Gross domestic product is expected lower at 1.9% and German Harmonized index of consumer prices pointing higher at 2.3%. On Wednesday, European consumer price index is pointing higher at 2.2%. and later the U.S. ADP employment report expected lower at 189K. Finally, on Friday, the U.S. Nonfarm payroll is expected to be much higher at 190K, much better than the last disappointing number of 134K.
Technical, the pair is neutral. Our traders maintain in Buy positions at 1.1674 (23.6%), 1.1604 (38.2%) and at 1.1548 (50%) and 1.1500 (61.8%) and targeting profits around 1.1800. The pair broke below the 61.8% Fibonacci level (1.1500) and reverse near the 100% (1.1330). This is keeping the picture neutral for now and traders are expecting a retest of 100% (1.1320) with aggressive buying pending orders. In the worst-case scenario, a break below 100% (1.1320) will force traders to trigger stop losses below 1.1280
GBPUSD continues trading lower than last week due to the stall in Brexit talks and mainly due to the Dollar’s strength. The pair is in the hands of global equities sell -off for now until something positive will come out from Brexit talks. Economic calendar is heavy this week for both GBP and USD. This will bring some interesting volatility that traders can benefit from. As for the GBP, on Thursday the BOE will release their minutes, even though no interest rate hike is expected soon, the minutes and the speech from governor Carney will show investors a future path to follow.
Technically the pair is neutral. Our traders maintain open buy positions at 1.3135 (23.6%), 1.3063 (38.2%) and 1.2930 (61.8%) targeting profits at 1.3300. The pair is in an oversold territory and expectations of sharp reversal are high.
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