EURUSD Closed the week marginally higher after bouncing off monthly lows. The better than expected German GDP last week, saved the day for EURUSD bulls, as it kept the technical recession on standby for now. Comments from FED’s Jerome Powell, that FED will maintain easy monetary policy for long, pushed the US Dollar lower, although, White house economic advisor, said that trade deal between China and US are very close and talks between negotiators were constructive. This helped equity markets to close the week higher and the US Dollar to benefit of this and remain somehow strong for the week. On this week’s fundamentals, once again traders will be focus on trade talks outcome, on FOMC minutes and the speech form ECB’s Lagarde.
On this week’s economic calendar, we have on Wednesday, German Producer price index pointing lower by 0% and FOMC minutes were no change on policy is expected. On Thursday, ECB monetary policy meeting accounts will be released. On Friday, German Gross domestic product expected to remain unchanged at 0.5%, German Markit manufacturing PMI expected higher at 49.2. European Markit PMI composite also higher at 50.9, US Markit manufacturing PMI expected higher at 51.5 and Michigan consumer sentiment higher at 95.9.
Technically, the picture is neutral. Last week’s drops to the critical support of 1.1000 (23.6%) kept the pair sentiment neutral and traders expecting a cautious upside move to 1.1090 (38.2%) for this week. If pair manage to close the week above 38.2% 1.1090 this could be push pair higher to our next level of 1.1150 (50%) alternatively a close below 38.2% will open the road for retesting 1.1000 (23.6%). Traders maintain open buy positions at 1.1088 and 1.1020 targeting profits at 1.1214 with stop losses at 1.0800.
GBPUSD closed the week higher after Nigel Farage declared that he will not contest any of the 317 seats won by ruling conservative party at the last election. News boosted the GBP higher as now odds are with Boris Johnson. Although, it is too early for now to have a clear picture on who will win, as forecasts showing both Johnson and Corbyn head to head. With not any fundamentals or Brexit news this week, we expect the tide range on GBP pairs to continue the same levels as last week.
On this week’s light economic calendar, we have on Wednesday, Inflation hearings and on Thursday, Public sector net borrowing.
Technically the pair is still neutral. Pair broke and closed above the (38.2%) 1.2860 and this is changing the picture from neutral to positive. Traders keeping open their buy positions at 1.2869 targeting profits at 1.3374. We expect more buyers to benefit from range trading and start buying the dips as from 1.2770.
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