EURUSD traded higher last week amid US Dollar’s weakness after disappointing PMI and durable goods orders. Beside economic indicators, ECB did not add further dovish pressure on Euro and FED’s “wait and see” stance helped the pair to close the week higher. Too early for now to applause this advance, as now we are writing this report is still pending the Sunday’s results of the European parliamentary elections. EURUSD next move will be depend on Sunday’s result. If Eurosceptic parties win, pair may trade lower next week, on the other hand if pro-Europeans win pair will continue higher.
On this week’s economic calendar, we have on Tuesday, Europe’s business climate, expected at 0.49 and the US consumer confidence expected at 130.1. On Wednesday, German unemployment rate expected to remain unchanged at 4.9%. On Thursday, US gross domestic product expected lower at 3.1%. On Friday, German retail sales expected at -0.1%, French gross domestic at 0.1%, German harmonized index of consumer prices lower at 1.5% and US core personal consumption unchanged at 1.6%.
Technically, the picture is negative to neutral. Pair continue trading within the down trend channel and range of 1.1300 – 1.1100. A clear break and close above 1.1275 (23.6% Fibonacci) needed to change the picture to neutral-positive. Our traders maintaining all buy positions open at 1.1500, 1.1275 and 1.1185 targeting profits at 1.1500 using trailing stops for each trade above 100 pips profits. A break and close below 1.1100 on the 4H chart this week will force traders using stop losses at 1.1080
GBPUSD traded lower last week after PM Theresa May confirmed her resignation for June 7th. Even though economic indicators are improving, pair continue lowering amid political chaos and uncertainty on who will be the next PM. Polls show that Boris Johnson is the most likely PM and this is not good for GBP, as he is the worst nightmare for Europe-UK relations and the person that will deliver Brexit without deal.
On the economic calendar this week we have on Tuesday, Inflation report hearings. And on Thursday, GFK consumer confidence with expectations lower at-12.
Technically the pair is negative and continue trades below the 100% Fibonacci level. The pair is entered over sold territory. By the end of last week, we ‘ve seen a small recovery, although it’s too early for now to change the negative picture. If this week pair persist trading lower, it might challenge the lowest multi month support of 1.2500. Our traders maintain open their buy positions at 1.3200 (23.6% Fibonacci level), 1.3123 (38.2% Fibonacci level) at 1.3062 (50% Fibonacci level) and 1.2996 (61.8% Fibonacci) and they aggressively bought on 1.2788 (100% Fibonacci) targeting profits at 1.3330. If pair will not turn up and continues trading on the downside next week, our traders will be forced to use stop losses at 1.2590.
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