EURUSD Closed last week’s trading session lower on ECB’s official’s comments that exchange rate matters and ECB is worrying for current euro rally. Last inflation number it was worst that expected and this pushing ECB to act to bring the euro down from its last 4 months rally to achieve inflation target. On the other hand, a dovish FED kept the rate around its current high levels.
In this week’s trading session is very important for traders to follow any outcome and or comment from both central banks and especially on this week’s ECB meeting as the banks will do anything which is needed to bring inflation around 2%. On the US dollar side better than expected ISM manufacturing ADP employment and continue high number of nonfarm payrolls might be the beginning of a big retracement that will bring EURUSD rate down to level seen 4 months ago. Hopes of the Russian Vaccine on covid-19 are better than expected and this boosted global markets once again last week favoring US Dollar. In the US new covid-19 cases reduced last week and epidemiologist Mr. Fauci said that a US vaccine could be approved before the end of the year. In any case, good news on vaccine will continue having positive impact on markets and on US Dollar.
As for the economic calendar we have on Tuesday, European gross domestic product with expectation to remain unchanged at -12.1% On Thursday, is ECB rate decision and press conference, US producer price index expected to remain unchanged at 0.3%. On Friday, German Harmonized index of consumer prices expected to remain unchanged at -0.1% and US consumer price index is pointing lower at 0.2% with a YoY also unchanged at 1.6%
Technically, the picture is positive. Pair still trading just around 161.8%. looking for breakout. A formation of higher highs and higher lows is giving the pair a bullish bias although traders should be alert for possible downside move. In this week’s trading session if the pair continues the downside we are expecting as next level 1.1700 (last 5 week’s lower level). Traders are expecting the downside correction, break from 1.1750 and 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. Alternative if pair breaks and close above 1.1900 on the 4H chart upside move may resume and bring the pair on the next resistance of 1.2100
GBPUSD closed the week marginally higher on US Dollar’s recovery as economic indicators and employment numbers are adding hopes of faster than expected recovery in the US. On the GBP side concerns of a no-deal Brexit are back again with BOE members indicating that BOE could add emergency support measures.
On this week’s trading session traders will follow once again FED and BOE official’s comments, and economic releases. Inflation report hearings could be a high impact catalyst for GBE this week.
In the economic calendar we have on Tuesday, BRC like-for-like retail sales pointing higher at 5.7% and inflation report. On Thursday, NIESER GDP expected negative at -6.3% On Friday, manufacturing production lower at 5% industrial production lower at 4.1% gross domestic lower at 6.7%.
Technically the pair is still positive. Last week’s sharp retracement from 100% level must add caution to the bulls. If pair breaks and close above 1.3500 (last week’s high) we could see more gains with first level to be tested at 1.3600 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 1.3150 1.3300 and 1.3486 targeting profits at 1.3050 for the latest ones and 1.2714 the old ones. 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 1.3050 and more aggressive buyers at 1.2714 (61.8%) with our sellers to take profit of their short positions
For more detail economic calendar events please visit our live economic calendar on:
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