EURUSD picture remains neutral to negative. Pairs are still looking for direction, after FED increased rate by 0.25%. The downside move was short lived after Wednesday’s rate hike and that was due to the Italian budget agreement reached on Thursday. A small rally and a break above 1.1420 resistance did not manage to change the picture and the trend. Before Friday’s closing bell, the pair suffered big losses as traders and investors were buying aggressive (the dollar) acting as heaven asset and in order to cover their losses on the equity markets. If the equity markets do not stabilize and they get worse, the US dollar will continue to become stronger against all major counterparties.
On the economic calendar for this week we have nothing to follow. Markets are closed for Christmas holidays and liquidity will be thin for the rest of the week.
Technically, the picture is negative. Our traders maintain Buy positions 1.1500, 1.1320 and 1.1220 targeting profits around 1.1500. The pair is expected to continue the range between the 0% 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. Caution must be in place as the break of 0% Fibonacci (1.1220) may accelerate losses down to 1.1100. In such a case it is wiser to trigger stop losses below 1.1220 and wait for the new price relocation to set new boundaries. A new trading Technik must be used in such an uncertain price moves ahead of the new year; “Trailing stops” must be used to all open positions just 50 pips above their open price.
GBPUSD continues trading unchanged. After a week of many economic indicators most of them favorable for the GBP, the pair did not manage to change its outlook. Traders and investors are waiting for the house of common agreements and Brexit negotiations outcomes, before they decide their new trading positions. This week offers nothing for this pair, as markets are closed for Christmas holidays and liquidity will be much lower compared to normal trading weeks.
Technically the pair is negative. Traders may start buying the pair if the price reject to break support at 1.2470 and breaks and close above 1.2645 (23.6% Fibonacci level). A break below 1.2470 may force traders to sell the pair and target profit down to 1.2200.
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