Pair closed last week’s trading unchanged on lack of any economic release and any news on Covid-19 vaccine. As new covid cases are stabilizing for now and markets are digesting news on Pfizer vaccine, so as, the currency market is stabilizing. Hopes of the 750 billion Euro aid package were waived last week as the deal was blocked by Poland and Hungary leaving the rest of the EU countries in search of a better deal that will satisfy all.
Going into this week traders will focus once again on covid new cases and lockdowns. WHO warns that covid new vaccine is still too far at this moment and governments should stay alert and continue imposing strict rules and lockdowns at least till mid-2021. Traders will focus on Angela Merkel’s “gold deal” and whether she will be able to pass her 750-billion-euro aid. From the US Dollar, all eyes will be turned to the FOMC and gather glues on FED’s future path.
On the economic calendar we have on Monday, German Markit manufacturing PMI with expectations to be lower at 56.5, European Markit PMI composite expected lower at 46.1 and US Markit manufacturing PMI lower at 53. On Tuesday, German Gross domestic product to remain unchanged at -4.1%. On Wednesday, US Durable goods orders expected lower at 1% and US Gross domestic product unchanged at 33.1%. On Thursday, German Gfk consumer confidence survey to be -2.8 On Friday, European consumer confidence expected at -18
Technically, the picture is neutral. Pair traded unchanged and close at 1.1857 just on 161.8%. In this week’s trading session if the pair trades on the upside and close above 161.8% gains will be accelerating and retest 1.2000 Alternative a break and close below 161.8% pair may resume downside and retest 1.1600 Our traders keeping open all their short positions targeting profits at 1.1600 If pair retreat lower we are expecting buyers to appear at 1.1600 and many short positions to take profit below 1.1700
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed higher last week on lack of US Dollars’ economic news and on upbeat UK retail sales. Although Brexit news was somehow disappointing pair didn’t react on the downside as this time the reason behind the stall it was due to positive Covid-19 cases within the persons of negotiation with the EU Chief negotiator Barnier going into self-isolation.
As for this week, traders will focus mainly on when the negotiation will be resumed and how many new covid cases will be.
In the economic calendar we have on Monday, Markit manufacturing PMI pointing lower at 50.5 Markit services PMI lower at 42.5.
Technically the pair is positive after last week’s rally. In this week’s trading session if pair continues on the upside, traders are expecting as next level 1.3500 100% Alternative if pair resume downside, first level to be retested is 1.2853 Our traders keeping open short positions at 1.3000, 1.3140 and 1.3252 targeting profits at 1.2700 We are expecting more aggressive short sellers to appear on the way up. Alternatively, if pair continues on the downside short sellers will take profits and buyers will start to appear as from 1.2700 (61.8%)
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