EURUSD sharp reversed from 2018 lows in last week’s trading session. Although this is not yet a strong signal to bring in more buyers. Looking to the fundamentals behind the pair, we can expect the rally to stop before the end of the month, due to the divergence between the two central banks. The hawkish FED from the one side and the dovish ECB from the other side are helping the pair to trade lower. Apart from the central banks, we still have in focus the Italian government for not willing to reduce their budget. The political turmoil in U.K. due the to the Brexit plan approval, it seems that is affecting also the EURO mainly because the UK uncertainty is stopping European companies from moving forward with their plans. As for the coming week on the Economic calendar traders will follow the Wednesday’s US Durable goods, on Thursday the ECB monetary policy meeting and on Friday, the European Markit manufacturing PMI.
Technically, the pair is negative to neutral. Our traders maintain Buy positions 1.1500 and 1.1320. After last week broke below 1.1300 they force to trigger stop losses for the rest of their positions opened above 1.1500. New positions opened at 1.1220 and targeting profits around 1.1500.
GBPUSD is under intensive pressure. The roller coaster continued during last week’s trading session, as PM Theresa May’s government is brearking apart. While everything was so bright on Wednesday after May’s plan was backed from her cabinet, the picture changed completely on Thursday morning when May’s ministers and Brexit negotiators resigned one after the other. On Friday May announced that she will fight and get the result that UK citizens voted for. Now May is facing the parliament for her plan to be approved and proceed to the next EU meeting on November 25. Before that happens, May will need to stay in her place, something that starts to be more difficult day by day, as her supporters are putting a no confidence letter to the parliament. 48 letters need to replace May, if this will happen then GBP will face more and stronger downside pressure because uncertainty will be prolonged for unknown time. If May will keep her place, then she will face parliament for approval. From the economic calendar, this week will have only one major announcement on Thursday, the Inflation report hearings.
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. Buying the dips is the main trading style for now, although caution is needed, as a failed Brexit plan could drive pair on extreme low levels.
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