EURUSD traded lower last week after comments of FED’s William signaling an aggressive rate cut as soon as at July meeting were reversed later as a non-FED decision comment but as an economic point of view. Investors remain on defending mode and kept the pair lower. Last Friday’s consumer confident number show an increase since last month and this gave the US dollar a bullish bias as any strong economic indicator is waiving chances of rate cut. As for the coming week the pair will be moving according to two fundamentals that will be the main decision-making actors of July’s FOMC. IMF is going to release the global economic growth and is widely expected to remain the same as last January’s, warning for global slower growth and the US second Quarter Gross domestic product is due to be released on Friday and is expected also lower that 1.9%.
In this week’s economic calendar, we have on Tuesday, the ECB bank lending Survey. On Wednesday, the German Markit manufacturing PMI expected higher at 45.1, European Markit PMI composite expected lower at 52.0 and US Markit manufacturing PMI expected lower at 50.0. On Thursday, German IFO business climate expected higher at 96.7, later ECB will release their July policy statement. Although a rate cut is not expected at this point, the speech from ECB’s president will guide investors on the future monetary path that will follow. The US durable goods at the same time expected higher by 0.5%. On Friday the US Q2 GDP expected lower at 1.9%
Technical, the picture is positive. After a 4th failed attempt to break below 1.1225 we are expecting the pair to move higher at 1.1341. Alternative a break and close below 1.1225 will change the picture to neutral and push the pair to retest support line at 1.1100. Our traders keeping open their positions at 1.1287 and 1.1225 targeting profits at 1.1500.
GBPUSD traded lower last week as markets are preparing for next week’s result on who will be the next UK’s PM. Polls from last week show an advance for Mr. Hunt, but still behind Mr. Johnson. On Tuesday the 23rd result will be announced and a new trend for the pair will be formed. Even though Johnson’s win is priced in, the pair may be trade lower at least for a short time after results. Alternative, a Hunt win, will push the pair higher. Pair manage to remain relatively higher from resent lows after house of Lords blocked the parliamentary withdrawal from any decision and parliament blocked any chance for a no deal withdrawal.
On this week economic calendar, we have nothing to follow for UK, so the pair will be 100% depending on the US counterparty economic releases and UK PM voting.
Technically the pair is negative and continue trades in an oversold territory between the 100% Fibonacci level and 161.8% extension. 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), 1.2996 (61.8% Fibonacci) and 1.2788 (100% Fibonacci) targeting profits at 1.3330.
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