EURUSD Closed the week lower amid divided ECB’s officials about the current accommodative monetary policy. Many ECB’s officials are concerned about the long-term negative interest rates although the biggest part of them agrees and supports that additional stimulus needed in order to maintain stability in EU. European economic indicators continue to deteriorate showing that EU is hitting into rapidly declining growth and possible recession. On the other side of the Atlantic the US dollar benefited last week and became stronger on concerns of a possible failed trade deal between the US and China. Another factor came into the game last week and this might affect the US dollar in the coming sessions, we are speaking about the impeachment that US president, Donald Trump is facing. New political turmoil in the country is putting Trump into a difficult position and a possible loss of his presidential race in 2020. Such an impeachment was seen again in Clinton’s presidency and resulted into a sharp drop in US equity indices and a stronger US dollar.
In this week’s economic calendar, we have on Monday, Harmonized Index of consumer prices pointing higher at 1.2%. On Tuesday, European core consumer price index expected higher at 1% and European consumer price index unchanged at 1%, US ISM Manufacturing PMI expected higher at 50.0. On Wednesday, US ADP employment change expected to show 140K jobs added On Thursday, German Markit PMI expected to remain unchanged at 49.1 and European Markit PMI also unchanged at 50.3. European sales are pointing lower at 1.9%, US ISM Non -Manufacturing PMI expected lower at 55.0. On Friday, US Average hourly earnings expected to remain unchanged at 3.2% and US nonfarm payrolls expected to add 140K jobs.
Technically, the picture is negative. Pair retreated lower and trading just below the trend channel. The new support at 1.0955 was breached and pair closed below this level opening the road for 1.0800. Buyers kept open long positions at 1.1014 and bought aggressive at 1.0955 targeting profits at 1.1320 with stop losses at 1.0900.
GBPUSD closed the week lower amid political chaos and renew Brexit uncertainty. High court’s decision on parliament suspension increase uncertainty over when and how Brexit will happen. High court decided last Tuesday that PM’s decision to suspend parliament was unlawful adding that “Johnson’s government to advise the queen to suspend parliament was unlawful because it had the effect of frustrating or preventing the ability of Parliament to carry out its constitutional functions without reasonable justification.” News have been taken as positive at the first hour, but sooner or later GBP started its way down and continue until Friday’s closing bell. Parliament’s reopening could bring more uncertainty for October as there is no deal ready on the table to be approved and with PM Boris Johnson’s stance to leave EU by 31st October, is expected to be a chaotic Month ahead.
On this week’s economic calendar, we have only on Monday, Gross domestic product pointing higher at 0.5%. On Tuesday, Markit manufacturing PMI pointing lower at 47.0. On Wednesday, Markit construction PMI expected to remain unchanged at 45 and finally on Thursday Markit services PMI expected lower at 50.3
Technically the pair is neutral. Even though pair traded lower last week, traders expecting the pair to retreat higher and continue its upside direction. Our traders took profit on their buy positions at 1.2200 and 1.2000 after triggered trailing stop at 1.2450. New buyers came in at 1.2400 and 1.2300 targeting profits at 1.2800 and triggering trailing stops above 1,2450. We are expecting more aggressive buyers to appear at 1.2200-1.2000
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