EURUSD pair maintained the bullish bias last week and closed marginally higher even though Fundamentals are against the upside move for this pair. Italy’s dept is so high that the country is on the edge of entering into recession, on the other hand, the fundamentals of USD are even stronger after the surprised 304K of nonfarm payroll.
For this week traders will focus on European producer price index on Monday, with expectations pointing lower at 3.3%, and the US factory orders expected positive at 0.2%. On Tuesday, German Markit service PMI expected unchanged at 53.1 and European Markit service PMI also unchanged at 50.8, US Markit service PMI unchanged at 54.5.
Technically, the picture is neutral. Our traders keeping open their buy positions at 1.1500 (50% Fibonacci), 1.1400 and 1.1352 (23.6% Fibonacci) targeting profits around 1.1565
GBPUSD closed unchanged last week. The recent rally halted last week due to the European refusal to reopen negotiation with PM Theresa May especially on the backstop for Irish Boarder. Trader’s positive sentiment did not change yet as the European answer was widely expected. In the UK the intra party negotiations continue after last week’s parliamentary voting defeat on Brexit “plan B”.
For the coming week we have on Monday, the UK construction PMI with expectations pointing lower at 52.6. On Tuesday, Markit service PMI expected lower at 50.8. On Thursday, the first BOE meeting for 2019 will take place, even though is not expected any change in policy, the speech that will follow from BOE’s Carney will give some future guidance on how the BOE will act in case a disorder exit from the European union will happen.
Technically the pair is positive. We are expecting new buyers to take control around 1.3027 (23.6% Fibonacci) and 1.2922 (38.2% Fibonacci) targeting profits at 1.3200
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