EURUSD Closed the week firm higher after the 27 European governments finally agreed the new fiscal stimulus package of 750 billion euros. Funds will be distributed to the countries that have been most affected by the covid-19 pandemic as a form of loans and grants. EU states will have to propose their plans on how to distribute the funds and need to be approved by EU commission. On the US Dollar side, investors are closely following the deteriorating relation between US-China after China order to close the US consulate as a retaliation of last week’s Chinese consulate closure in the US. As for the coming week traders will be focus on economic releases from the US and Europe, the US China diplomatic war and on Wednesday the FOMC minutes. FED is not expected to take any action on this meeting although is crucial to follow FED’s growth forecast for the rest of the year.
On this week’s economic calendar, we have on Monday, German IFO business climate pointing higher at 89.3 and US durable goods orders pointing lower at 6.5%. On Wednesday, FOMC minutes to be released. On Thursday, German Gross Domestic Product expected lower at -9%, European consumer confidence at -15 German Harmonized index of consumer prices lower at 0.4% US Gross Domestic Product lower at -35% and US core personal consumption expenditures to remain unchanged at 1.7%. On Friday, German retail sales expected lower at 1.4% French Gross Domestic Product lower at -15% European consumer price index core lower at 0.7% European Gross domestic product lower at -12% and US Michigan consumer sentiment lower at 72.8
Technically, the picture is positive. Pair continue to trade above 100% stretching over bought territory near to 161.8% extension. In this week’s trading session if pair continues on the upside we are expecting as next level the 161.8% 1.1900. Traders are expecting the pair to retrace on the downside and could bring the pair back to 100% 1.1400 and below. Our traders keeping open their short positions opened since 1.1029, 1.1100 and 1.1398 and continue to aggressive sell the pair on several levels. we are expecting more aggressive short positions this week if pair continue on the upside. Alternative if pair retrace back to the 100% 1.1400 we may see buyers coming in.
GBPUSD closed the week higher mainly on US Dollar weakness and on UK Prime Minister Johnson commitment to strike a deal with EU.
As for this week, things may change direction and pair’s positive picture will turn negative as Escalating UK-China relations are deteriorating after Beijing condemns UK’s interference in China’s internal affairs. Apart from that a statement from Michel Barnier may renew fears of no deal, after he comment that EU is engaging to its promises while UK is not. Investors will closely monitor the outcome of the EU-UK negotiations and UK-China relations.
On this week’s economic calendar, we have nothing to be released form the UK so the pair will be depending on the US economic releases mention above in the EURUSD weekly review.
Technically the pair is positive after last week’s closed above 61.8% 1.2793 If pair manage to stand above 61.8% we could see more gains with first level to be tested at 1.3157 just below (100%) in the coming sessions. Alternative a break and close below 61.8% will change the picture to neutral and resume downside to retest 50%. Our traders started to sell the pair at 1.2700 targeting profits at 50% 1.2470 we are expecting more aggressive sellers this week if pair continue upside, alternative, if pair retreat lower we are expecting new buyers to appear as from 1.2470 and more aggressive buyers at 1.2321 and 1.2220 (38.2%)
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