EURUSD traded unchanged last week as markets are waiting for catalytic events before they chose direction. In the EU we have seen once again the 2 biggest economies, Germany and France missing traction on their economic growth and especially manufacturing sector. The persisting disappointing number on Europe’s CPI is adding negative pressure on Euro. Outside factors like Brexit stall and China-US trade deals are also keeping EURUSD rate on hold.
This week’s economic calendar will focus on Central banks meetings. On Wednesday, ECB will release their minutes and as it is widely expected the dovish tone of Mario Draghi will remain in place. EU council is meeting on Wednesday to discuss and approve or reject UK’s proposal for a new delay until 30 of June. On the same day the US consumer price index will be released and is expected to remain unchanged at 2.1%. Later during the day FOMC minutes will be released, no change on policy is expected although a confirmation of US economy slowdown and balance sheet reduction will have negative impact on the US Dollar. On Thursday, German Harmonized index of consumer prices is pointing lower at 1.4%. On Friday, Michigan consumer sentiment is also expected lower at 98.
Technically, the picture is neutral. Our traders are keeping open their buy positions at 1.1500 and 1.1275 (23.6% Fibonacci) targeting profits around 1.1565. We are expecting aggressive buy orders to be opened at 1.1184 (0.00% Fibonacci) all targeting profits around 1.1400. If pair break and close below 1.1180 on the 4H chart this might change the picture to negative and force our traders to stop loss all their long positions.
GBPUSD traded unchanged last week as Brexit deadline approaching without an approved deal in place. The united forces of PM Theresa May, and, opposition’s leader Corby, have been taken positive from markets although traders are still cautious before the Wednesday EU meeting where possible scenarios of a short delay or a very long delay are on the agenda. Initial proposal of a delay until 30 of June is to be approved. Although due to the European parliament elections next month possibilities of a longer extension are high, and this could drive the pair much higher.
On the economic calendar, we have on Wednesday, the UK manufacturing production pointing higher at -0.6% YoY and lower at 0% on a monthly basis. All eyes will be turned on Wednesday’s EU special summit for approving Brexit delay.
Technically the pair is positive to neutral. Our traders maintain open their buy positions at 1.3200 (23.6% Fibonacci level), 1.3123 (38.2% Fibonacci level) and 1.3062 (50% Fibonacci level) and 1.2996 (61.8% Fibonacci) targeting profits at 1.3330.
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