EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session lower amid Eurozone’s weak inflation. The disappointing number of 0.2% down from 0.4% last month add downside pressure on the pair as investors are bracing for more actions form the ECB, in its efforts to bring inflation higher. Additional downside pressure was added after another week of uncertainty and lack of progress in the approval of additional stimulus package from the US congress. Covid-19 new harder restrictions is another negative factor for Euro.
In this week, traders will keep focusing on the additional aid package approval by the US policymakers, the speech form FED’s chair Powell and ECB’s officials’ speeches including President Lagarde. We are expecting speeches from ECD to be dovish after inflation numbers came out weaker than expected, and is such a scenario, euro will face aggressive sell off.
On the economic calendar we have on Thursday, German Gfk consumer confidence pointing lower at -2.5 and European consumer confidence expected lower at -15. On Friday, German Markit manufacturing PMI expected lower at 55.5 German Markit PMI composite lower at 53.5 European Markit PMI composite lower at 54 and US Markit service PMI lower at 54.5
Technically, the picture is neutral. Pair traded lower last week after rejected and close below (161.8%) In this week’s trading session if the pair trades on the upside and break and close above 161.8% we are expecting as first next level 1.1914 alternative if close below 1.1613, downside will resume and push the pair on the downside to test 1.1450 a level acted as resistant now turning into support level. Our traders keeping open their short positions opened between 1.1000- 1.1800 targeting profits at 1.1600 and below. We are expecting buyers to take control at 1.1600 if pair retreat lower, and sellers to take profits on their short positions opened at 1.1800 Alternative if pair continues upside more aggressive short positions will be opened above 1.1860
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed lower last week’s session amid crash in EU – UK Brexit talks. Boris Johnson comment that UK is stepping away from the talks as the lack of progress from last weeks’ talks is shown limited chances of having any trade deal before the deadline. UK PM Boris Johnson added that UK should get ready for no deal exit in January. UK requesting form EU a Canada trade style, while EU refusing to accept such a deal.
As for this week the main actor for any price action will be the UK stance and what comments will come out from both sides whether they will resume talks or abandon talks forever. Traders must continue monitoring new harder restriction measures imposed by government on halting covid-19 spread. Such measures may continue to deteriorate economic indicators, something that can be seen negative for GBP. Speeches from BOE officials must be closely monitored to gather information about BOE’s next monetary policy.
In the economic calendar we have on Wednesday, consumer price index pointing higher at 0.5% retail price index higher at 0.3% On Friday Gfk consumer confidence expected lower at -28 retail sales expected higher at 3.7% and Markit services PMI lower at 54.5
Technically the pair is neutral after last week’s downside move. In this week’s trading session if pair continues on the downside, traders are expecting as next level 1.2700 Alternative if pair resume upside move, next level to be retested is the 1.3088 Our traders keep opened short positions at 1.3000 targeting profits at 1.2700 We are expecting more aggressive short sellers to appear on the way up to 1.3260. Alternative if pair resumes downside shot sellers will take profits and buyers will start to appear as from 1.2700 (61.8%)
For more detail economic calendar events please visit our live economic calendar on:
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