EURUSD has resumed its upside move from last week, favored from weaker U.S. Dollar after the G20 meeting from the weekend before when China and the US suspended Tariffs and markets relief from Trade war. An additional upside move was added after a disappointing ADP employment and Nonfarm payroll number. For this week we have a major event that can affect the pair move on either direction. U.K. parliament will vote, with or against PM May’s Brexit plan, the event will take place on Tuesday at 20:30 GMT. On the economic calendar we have on Tuesday, German ZEW Survey with expectations pointing lower. On Wednesday, the U.S. Consumer price index with expectations pointing higher at 2.2%. If this number will confirm a higher inflation, this might change the overall picture of the EURUSD price and turn lower, as investors and traders will start pre-positioning ahead of next FOMC meeting when a rate hike is expected. Later, on the same day, Fed’s Powell will speak. On Thursday ECB will release their Monetary policy statement. At this meeting it is expected that ECB will withdraw their QE program, although this is already known, investors will focus mostly on the 2019 rate path and whether ECB is ready to go back to rate normalization. On Friday the U.S. retail sales are expected lower.
Technical, the pair is still negative to neutral. Our traders maintain Buy positions 1.1500, 1.1320 and 1.1220 targeting profits of around 1.1500. The pair is expected to continue to range between the 100% Fibonacci level at 1.1220 and 1.1500 (50%) Fibonacci level. A break and close above 1.1430 on the 4H chart is needed to change the picture to neutral/positive. Alternatively, a break and close below 1.1300 will turn the picture to negative and retesting lows of 1.1200 will be on the cards once again.
GBPUSD closed the week unchanged compare to last week’s closed. The stall in GBPUSD price is due to the wait for the parliament vote which is due this week on Tuesday at 20:30 GMT. After a week of debates in the parliament we have seen PM May losing 3 times, this is keeping the pair down as more uncertainty will overshadow the UK’s Economy in case of no vote. Parliament’s debate will continue throughout the day today 10th December and tomorrow 11th until 19:00 GMT, after that voting will start and results will come out every 15 Minutes until the last and final vote will be announced at 20:30 GMT. Scenarios vary from accepted and vote with PM May’s Brexit plan which is something that will push GBPUSD up to 1.3300 level or no Brexit deal, to new voting once again, to general elections and the most probable scenario to a second referendum this will add more uncertainty and pair could dip down to 1.2500. On the economic calendar we have, on Monday, the UK manufacturing production with expectations is pointing lower, and gross domestic with expectations pointing higher. On Tuesday, the average earnings and claimant count change.
Technically the pair is neutral to negative. 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. A no voting on Tuesday will probably force traders to trigger stop loses to all positions below 1.2650
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