EURUSD traded higher last week amid dovish FOMC minutes. FED open the door for rate cut if needs and easing accommodate program in order to sustain economic growth. As we are hitting into 2019 the diversion between the 2 central banks is erased With the ECB maintaining a dovish stance and the FED changing from hawkish to dovish, the result will be higher exchange rate for this pair. Although the overall picture of EURUSD changed to positive this week, it will not be a surprise if change back to negative, With the ECB last week pointing into further negative interest rates and adoption of additional easing policy, the negative picture could be triggered even at the next ECB meeting. Many ECB and FED officials are due to speak this week, it is highly recommended to hear what they will say in order to have a better picture on the future path of both central banks. On the coming weekend the G20 meeting will weight on dollar’s value as the 2 leaders of US and China are going to meet and resume discussions over trade tariffs.
On this week’s economic calendar, we have on Monday, German IFO business climate with expectations pointing lower at 97.3 On Tuesday, the US Housing price index expected higher by 0.2% and later Fed’s Chair Powel will speak. On Wednesday, German Gfk Consumer confidence survey expected lower at 10 and US durable goods orders expected higher at 0.2%. On Thursday, German Harmonized index of consumer prices expected higher at 1.4% and US gross domestic product unchanged at 3.1%. On Friday, European consumer price index expected to remain unchanged at 1.2% and the US core personal consumption expenditure unchanged at 0.2%
Technical, the picture is positive. Pair retreaded higher and broke and closed above the important level of 1.1350. with the higher high and higher low formation since the beginning of June, picture is positive and further upside move is expected. Our traders trigger trailing stops above 1.1350 and hopping to reach their target at 1.1500. New pending buy orders were placed at 1.1275 and 1.1200 targeting profits at 1.1500.
GBPUSD traded higher last week after markets digested the fact that Borris Johnson chances of being the next PM are weighting heavy. A bounce from the lows of last week are also due to the fact that the second candidate for the position of PM is Mr. Hunt, a pro-European MP. Additionally, the pair trader higher due to dovish FOMC minutes from last week. Waiting now to confirm who will be the next PM and what approach he will follow into delivering Brexit, are the only fundamental behind the next move of this pair. The G20 meeting next weekend has the potential of moving the pair on either direction as the US and China leaders will meet and discuss about trade tariffs.
On the economic calendar this week we have on Monday, inflation report hearings, and, on Thursday, Gross domestic product with expectations pointing lower at 0.2%.
Technically the pair is negative and continue trades below the 100% Fibonacci level. A solid pull back last week, is a positive signal. A break and close above 1.2788 need to change the picture back to neutral. 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 aggressive bought on 1.2788 (100% Fibonacci) targeting profits at 1.3330.
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