EURUSD traded lower last week amid European parliamentary elections which are due to be take place May 23-26. The rise of socialist and Eurosceptics is keeping the pair muted and lower for now. Although US president Trump delay another 6 months the tariffs on European cars, the pair did not react significant. Traders are waiting for stronger fundamentals before deciding to open bigger positions. Two of those fundamentals are coming this week, On Wednesday, ECB’s Mario Draghi will speak in Frankfurt about Europe’s economic outlook and on the same day FOMC minutes will be released.
This week’s economic calendar will start on Monday with German Producer price index pointing higher at 0.2%. On Thursday, German gross domestic product expected unchanged at 0.6% German Markit manufacturing PMI higher at 45.0 and European Markit PMI also higher at 51.8. On Friday the US durable goods orders expected lower at 0.1%
Technical, the picture is negative to neutral. As far as the pair continue trading within the down trend channel and range of 1.1300 – 1.1100, is keeping traders on hold. 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 announced her resignation for June 3rd. Hopes for agreement between the 2 biggest UK parties has been erased this week, leaving the country in political chaos. Is expected that PM Theresa May will bring some options for voting on the parliament next week, although is very clear from now that she will be defeated again. Her main target before leaving her position is to pass through parliament a motion forbiting a second referendum, where chances of canceling Brexit are high. This motion is unlikely to pass from the parliament as many PMs are looking forward for a second referendum. Political uncertainty will keep GBP lower until a new PM will be elected. A large number of candidates are ready to undertake this position and the faith of GBP will depend on whether the new PM will be a hard Brexiter or a soft one.
On the economic calendar this week we have on Tuesday, Inflation report hearings. On Wednesday, retail price index pointing higher at 2.5% producer price index higher at 3.9% and consumer price index also higher at 2.2%. On Friday, retail sales expected lower at 4.5%.
Technically the pair turned negative and broke range and 100% Fibonacci level. The pair is entered over sold territory. 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) 1.3062 (50% Fibonacci level) and 1.2996 (61.8% Fibonacci) and they aggressive 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 1.2690.
For more detail economic calendar events please visit our live economic calendar on:
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