Pair closed last week’s trading session higher on upbeat economic releases from form Germany and European Union area. Markit market conditions improved although EU is fighting the seconds wave of covid-19 new cases. On the US Dollar side, we still see some weakness as markets are hoping for the stimulus package to be approved.
In this week, traders will be focus on ECB meeting. Although a no change in policy is expected at this meeting, traders must closely monitor the after-meeting press conference of president Christine Lagarde. We are expecting the speech to be dovish and signal future easing policy as inflation numbers are pointing lower. In such a dovish scenario Euro will be under pressure and push the pair lower. In others, traders will keep waiting for package approval by the US policymakers, and covid-19 outbreak, on how much will affect the economic growth in the coming months.
On the economic calendar we have on Monday, German IFO business climate pointing lower at 92.7 On Tuesday, US durable good orders expected higher at 0.7% On Thursday, German unemployment rate expected higher at 6.4% European consumer confidence unchanged at -15.5 US Gross domestic product higher at 30.8% German Harmonized index of consumer prices negative at -0.4% On Friday, German retail sales expected higher at 4.2% German gross domestic product higher at 7.1% European consumer price index core higher at 0.5% European gross domestic product higher but still negative at -7%
Technically, the picture is neutral. Pair traded higher and close just on (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 next level 1.2023 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 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 higher last week’s trading session amid hopes of a trade deal between EU and UK. GBP traders, welcome remarks from European Union chief Brexit negotiator Michel Barnier on the importance of the U.K.’s sovereignty, in a sign the two sides are ready to resume trade talks. The EU’s principles in the talks “are fully compatible with the respect of British sovereignty, a legitimate concern of Boris Johnson’s government,” he said.
As for this week markets will focus on both the Brexit talks outcome and covid-19 outbreak in the UK.
In the economic calendar we have nothing to follow on the GBP so the pair will exclusively move on its US Dollar counterpart economic events.
Technically the pair is neutral after last week’s upside move. In this week’s trading session if pair continues on the upside, traders are expecting as next level 1.3200 Alternative if pair resume downside move, first level to be retested is 1.2700 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. 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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