EURUSD Closed last week’s trading session unchanged after failed attempt to break lower. Fed highlighted that rebound in US economy is uncertain and pace in economic activity will likely slow down. The fed will maintain their accommodative path and low interest rates will be in place for at least another 3 years. As for this week apart from the economic releases, traders will be focus on FED’s chair Powel speech starting on Monday and going through all the week until Thursday.
On the economic calendar we have on Monday, Chicago Fed National activity index pointing higher at 1.95 On Tuesday, European consumer confidence to remain unchanged at -14.7 On Wednesday, German Gfk consumer confidence expected at -1 German Markit Manufacturing PMI higher at 54.2 German Markit PMI composite lower at 54.2 European Markit PMI composite lower at 56 US Markit manufacturing PMI unchanged at 53.1 and US Markit service PMI lower at 54.7 On Thursday, German IFO business climate expected higher at 93.8 On Friday, US durable goods orders expected lower at 1.5%
Technically, the picture is positive. Pair still trading around 161.8% in range of 1.1750 – 1.2000 looking for breakout. In this week’s trading session if the pair continues on the downside we are expecting as first level 1.1700 (last 7 week’s lower level). Our 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 resume. Alternative if pair breaks and close above 1.2000 on the 4H chart, upside move may resume and bring the pair on the next resistance of 1.2100
GBPUSD closed the week higher after the week before sharp decline, As it was widely expected the recovery took place as short seller took profit their short positions and after BOE’s dovish stance was digested by market. Although BOE was very clear that is on track of cutting interest rates into negative territory traders took the chance to buy the dip and pushed the pair upside. A dovish FED also added some upside traction on the pair. BOE warned that although recent economic indicators are stronger than it was expected the risk of a more persistent period and higher unemployment is still here. BOE will monitor the situation and the economic performance affected by the surge in covid-19 new infections and will adjust policy accordingly.
As for this week all eyes will be on the BOE governor and FED’s Powell speeches. A close monitoring on Brexit news outcome is must for next week as this event is a major actor for any move on this pair.
In the economic calendar we have on Monday, inflation report hearings. On Tuesday, CBI Industrial trends Survey expected at -43 On Wednesday, Markit manufacturing PMI expected at 54 and Markit services PMI at 56 On Friday Gfk consumer confidence expected at -27
Technically the pair is still positive. Last 2 week’s sharp retracement from 100% level is halted and reverse higher just above 61.8% level. As we mentioned last week if pair close above 61.8% 1.2715 we may see a recovery on the upside something that happened and now pair trading higher above 1.2900 In this week’s trading session if pair maintains bullish bias we may see as next level 1.3000 Alternative if pair breaks and close below 61.8% downside pressure will resume and first level to be tested will be 50% 1.2465. New buyers took control at 1.2800 targeting profits at 1.3200 we are expecting more aggressive buyers at 1.2714 (61.8%)
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