EURUSD Closed higher over uncertainty and deadlock from US congress of approving additional stimulus to support the US economy from recovering lost ground caused by pandemic. On the other hand, German and European economic indicators are improving and this is keeping the pair trading around 3 years high levels.
As for this week traders will continue to focus on whether congress will finally approve additional stimulus package, FOMC minutes, ECB’s monetary policy meeting and on high impact Economic indicators that could show market improvement conditions. No action expected on this FOMC although, cautions need to be in place on Wednesday’s FOMC as FED’s chair Powell may reiterate warnings that economy is still vulnerable and up bit economic indicators may be under estimating the situation.
On this week’s economic calendar, we have on Wednesday, European consumer price index core with expectation to be stabilizing at 1.2% and US FOMC minutes. On Thursday, Philadelphia Fed Manufacturing index survey expected lower at 21 On Friday, German Markit manufacturing PMI expected higher at 52.5 European Markit PMI composite marginally lower at 54.7 and US Markit Manufacturing PMI higher at 51.5
Technically, the picture is positive. Pair still trading just below 161.8%. In this week’s trading session if the pair continues on the downside we are expecting as next level 1.1700 (last week’s lower level). Traders are expecting the downside correction will continue and could bring the pair back to 100% 1.1400. Our traders keeping open their short positions opened between 1.1000- 1.1900 We are expecting buyers to take control at 1.1545 and sellers to take profits on their short positions opened above 1.1800 if downside continues
GBPUSD closed the week higher amid US Dollar’s selloff as congress failed again to pass the additional stimulus package. On the other hand advance was limited as UK’s deteriorating GDP is keeping traders on hold and adding fears that UK is entering into recession.
Traders will continue to closely follow the UK’s economic indicators and results from US congress on approving the stimulus package. A combination of both, package approval and deteriorating UK economic indicators may cause sharp downside move on pair.
On this week’s economic calendar, we have On Wednesday, consumer price index pointing higher at 0.7% while YoY core index expected lower at 1.3%. On Friday, retail sales expected lower at 2% and Markit services PMI higher at 57
Technically the pair is still positive. If pair breaks and close above 1.3150 (last week’s high) we could see more gains with first level to be tested at 1.3257 just below (100%) in the coming sessions. Alternative a close below 1.3050 will resume downside to retest 1.2714 61.8%. Our traders keeping open their short positions opened at 1.2700 1.3016 and 1.3150 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 1.2700 and more aggressive buyers at 1.2470 (61.8%) with our sellers to take profit of their short positions
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