EURUSD closed higher last week despite renewed fears of trade war and despite relatively uncertain and volatile week in the equity markets. Euro has benefited from the Dollar’s softness last week after the two countries, US and China, entered into a trade war without ending. Declarations from US president Donald Trump about stopping business with Huawei and also adding that the US is not ready for trade deal with China, pushed the US dollar lower. Recent Euro recovery of course is not something that can be cheered for now as the ECB is still signaling a rate cut in September. Europe’s economic data are pointing into a shrinking economy and this can add pressure on ECB to introduce additional easing measures, something that can be seen as negative for Euro. Traders will remain focused on economic releases from both sides, Europe and US. Apart from the economic events traders must closely monitor US president Donald Trump’s tweeting. As we know how he is changing his mind, it is worth following his declaration in order to gather information about the future relationship between the 2 countries.
In this week’s heavy economic calendar, we have on Tuesday, German Harmonized index of consumer prices with expectations to remain unchanged at 1.1% German ZEW Survey expected lower at -22.3 US Consumer price index expected unchanged at 2.1%. On Wednesday, German Gross domestic product expected lower at -0.1% and Europe’s GDP unchanged at 1.1%. On Thursday US retail sales expected lower at 0.3% and US Industrial production higher by 0.2%. On Friday the Michigan consumer sentiment index is pointing lower at 97.7
Technically, the picture changed back to neutral after pair managed to recover and closed above the 1.1100. As we mentioned in last week’s technical, a break and close above 1.1100 pair may continue to trade higher and retest 1.1225. Our traders keeping open their positions at 1.1287 and 1.1225 targeting profits at 1.1400 and took profit their positions opened at 1.1124. As for this week a break and close above 1.1224 could bring more gains and retest 1.1287 level. Alternatively, if fail to break 1.1224 pair will retreat back to 1.1124
GBPUSD continues trading lower last week amid verbal fighting between UK and Europe. Declarations from officials of both sides are adding pressure on GBP. On the one side UK is threatening Europe that will leave the block with or without a deal on the 31st of October. On the other side, Europe is refusing to renegotiate any other trade deal with UK. Apart from the Brexit uncertainty GBP had some front winds from the negative economic data came out last week and this could become worst in this week’s heavy economic releases.
On this week economic calendar, we have on Tuesday, ILO unemployment rate with expectations to remain unchanged at 3.8%, while average earnings are expected higher at 3.8%. On Wednesday, consumer price index expected unchanged at 2% and retail price index lower at 2.8%. On Thursday, retail sales expected lower on a monthly basis by -1.4% while are pointing higher at 4% on a YoY basis.
Technically the pair is negative and continue trades in lower lows every week. Pair attempt to break but didn’t close below the very strong support of 1.200 if pair keeps that support we may have a retrace on the upside in the coming weeks. Alternatively if breaks and close below 1.200 then the pair will relocate into level never seen before. As we previously mentioned, technical, pair relocations into new level are taken 100 by 100 pips. We are expecting a break below 1.2000 to bring the pair down to 1.1900 as first level. Our traders are waiting for a clear rejection of the strong support of 1.2000 before they decide on opening new positions.
For more detail economic calendar events please visit our live economic calendar on:
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