EURUSD closed the week unchanged after a short rally on the upside due to a less dovish language from ECB. Europe’s central bank disappoint investors after hold rates unchanged, Euro traders were on standby last month hoping for a rate cut last Thursday. Euro rallied 30 pips after ECB hold rated unchanged and used a less dovish language as usual mentioning that rate cut, and stimulus may arise in the coming months. Pair rapidly paired all gains as investors translated the non-dovish ECB move as a non-dovish FED move for this week. On this Wednesday’s FOMC markets were pricing in a rate cut from FED, this was waived last week due to ECB’s move and due to solid economic data from the US. If this week FED will maintain rates unchanged pair may continue trade lower, alternative, a 0.25% rate cut may be seen as dovish enough for farther rate cuts in the future and pair may resume rally on the upside.
In this week’s economic calendar, we have on Tuesday, German Gfk consumer confidence survey with expectations higher at 10 and German Harmonized index of consumer prices expected lower at 1.3%, US core personal consumption expenditures expected unchanged at 0.2%. On Wednesday, German retail sales expected higher at 0.5% and unemployment rate unchanged at 5%, Europe’s Gross Domestic product expected lower at 1% and Europe’s consumer price index lower at 1%. later FOMC minutes will be released and a rate cut of 0.25% is expected. On Thursday, Markit manufacturing PMI expected higher at 45.4, US ISM manufacturing PMI expected higher at 52.0. On Friday Europe’s retail sales expected higher at 1.6% and the US nonfarm payrolls are pointing to a lower number of 170K and a rise at 3.2% for the Average hourly earnings.
Technically, the picture is neutral after break below 1.1225 and closes above the strong support of 1.1100. If break and close below 1.1100 this week picture will be changed to negative and pair may continue trading lower to 1.0800 a level last seen back in 2016 Our traders keeping open their positions at 1.1287 and 1.1225 and bought aggressive at 1.1124 targeting profits at 1.1400.
GBPUSD traded lower last week as markets are still pricing in a potential no deal depart of the UK out of EU. No deal fears came back in the game after European official comment on Boris’ first speech in the parliament. Boris’ comments on getting rid of Irish boarder backstop frustrated EU officials and hit back with declarations mentioning that possibilities of renegotiating the deal are excluded and any new negotiation must be compatible with the existing agreement. On the other side, Irish Prime Minister Leo Varadkar said, “without the backstop there is no withdrawal agreement, there’s no transition phase, there’s no implementation phase, and there will be no free trade agreement until all those matters are resolved”. GBP traders will expect in the coming months the same volatility and the same familiar uncertain situation as the last year when EU and UK agreed and disagreed, parliament was rejecting deals one after the other and who knows how far this will last. Will we have a new departure date after the 31 October or UK will depart without deal?
On this week economic calendar, we have on Thursday BOE minutes were no change in policy is expected. A speech of Governor Carney will follow and comments weather BOE will act and how on this situation will give traders guide for the future path that BOE will follow.
Technically the pair is negative and continue trades in lower lows every week. Our traders triggered stop loss on their open positions at 1.2350. A break below the strong support of 1.2380 will drive the pair lower at 1.2000. Alternative an upside turn at this level could give hopes to buyers and maintain open their buy positions that are already stretch to the maximum.
For more detail economic calendar events please visit our live economic calendar on:
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