EURUSD Closed the week higher amid softer US Dollar. Last week’s rally was mainly due to the US dollar’s weakness as traders are bracing for the outcome of this week’s meeting between China and the US. Even though US president Trump declared that talks are in good progress, markets are bracing for a no deal. Many times, in the past we ‘ve seen Trump coming up with new Tariffs just before talks were resumed. Of course, this time this is not the issue of coming up with new tariffs but, how, the US stance will be on the tariffs opposed, and due to be live on October 15th. All eyes will be on the trade deal outcome as this outcome has a high impact on word growth, that is already strangling since the trade war started between the 2 countries.
In this week’s economic calendar, we have on Monday, European industrial production pointing higher by 0.3%. On Tuesday, European ZEW survey on Economic sentiment expected lower at -33. On Wednesday, European core consumer price index expected to remain unchanged at 1%, US retail sales control group expected unchanged at 0.3%. Other than economic indicators will be few speeches from FED officials, due during the week.
Technically, the picture is neutral. Pair continue trading within the trend channel. Recent upside move is changing the picture from negative to neutral and traders are becoming more optimistic that pair will start trade higher and continue trading in range of 1.0900-1.1200. We are expecting new buyers to jump in this week at 1.0955 targeting profits at 1.1100 and with stop losses at 1.0800
GBPUSD closed the week much higher than anyone could believe. News release last Thursday was all what GBP buyers were waiting for so long. The outcome from the meeting between UK’s Boris Johnson and Ireland’s Varadkar was taken positive by markets and boosted the possibilities of reaching a deal between UK and EU this week. Ireland’s Varadkar said: “I had a very good meeting with the prime minister and our teams together — very positive, very promising, I do see a pathway towards an agreement in the coming weeks, the progress would be enough for formal negotiations to re-start in Brussels”. Chief EU negotiator Michel Barnier and UK Brexit secretary Stephen welcome the news and they also confirmed their meeting highlighting that PM Boris’ offers are promising, and a deal could be reached by the deadline of 31st October. This week is crucial for GBP as traders will be waiting for Brussel outcome on the trade deal between EU and UK.
On this week’s economic calendar, we have on Tuesday, ILO unemployment rate expected to remain unchanged at 3% and average earnings lower at 3.7%. On Wednesday, Consumer price index expected higher at 1.8% and retail price index also higher at 2.7%. On Thursday retail sales expected higher by 0.5% on a monthly basis and 3% on YoY basis.
Technically the pair is still neutral even though retreaded sharply on the upside. Pair need to break and close above the 61.8% in order to change the picture to positive. Our traders keeping open their buy positions at 1.2400 and 1.2300 targeting profits at 1.2800 and triggering trailing stops at 1,2600. If trailing stops will be hit this week, we are expecting more aggressive buyers to appear at 1.2300
For more detail economic calendar events please visit our live economic calendar on:
*The material does not contain an offer of, or solicitation for, a transaction in any financial instruments. 10TradeFX accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representationor warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all your invested capital, so please make sure that you fully understand the risks involved.