EURUSD traded higher last week mostly due from the US dollar weakness and the digested ECB’s dovish tone. As the tools of ECB on weakening the Euro, are running out of steam, the pair started to push higher. Although is not a solid bullish move yet, as from now the pair will move according to the ongoing releases of economic indicators from both the Eurozone and the US. A new threat that can change the exchange rate on either directions is the US-EU tariffs proposed from US president Trump on EU goods like cheese and wine. On others, this week is a short week for Europe, as the eastern holidays are on the way and this will bring lack of liquidity and possible unforeseen moves on either directions.
This week’s economic calendar will be the only fundamental catalyst for further upside move or retreat back to the lows. On Tuesday, German ZEW survey expected lower at -11 and Eurozone’s ZEW survey lower at -9.5. On Thursday, German Markit manufacturing PMI expected higher at 45 and Europe’s Markit manufacturing PMI higher at 51.8. Later on the same day the US retail sales control group expected higher at 0.4%. 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. A double bottom attempt of the 7th of March and 2nd of April and the rejection of this level of 1.1180 in combination with the close above 1.1275 level on the 4H chart is changing the picture from neutral to positive. In order to confirm the positive momentum, a clear break above the (38.2% Fibonacci level 1.1338) is needed in order to break the long term downside formation of lower lows, lower highs and change the picture to positive.
GBPUSD traded unchanged last week after EU leaders agreed on a 6-month extension as a new deadline for the departure of UK from the EU. The news did not create any significant volatility due to the fact that a short term delay it was widely expected and priced-in. The only fundamental behind any move on this pair is the outcome of negotiations between PM Theresa May and her opposition leader Jeremy Corbyn. As for now, the UK parliament will halt its meetings due to eastern holidays and any new deal will be due for approval or rejection after the holidays. Volatility on the pair will re-incite in any outcome during the negotiations. Fundamentally, the pair could trade lower as the 6-month extension will create uncertainty over time by affecting any new investments or expanding the existing ones. Such a wait and see stance is negative for the economy.
On the economic calendar, we have on Tuesday, the UK ILO unemployment rate pointing higher at 4% and average earnings with expectations unchanged. On Wednesday, retail price index is pointing lower at 2.1%, Producer Price Index lower at 2% and Consumer price index lower at 1.6% On Thursday, retail sales expected higher at 4.6%.
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), 1.3062 (50% Fibonacci level) and 1.2996 (61.8% Fibonacci) targeting profits at 1.3330.
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