EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session lower after markets relaxed from both pending decisions. First, on the US Dollar side, we have seen finally the Congress passes legislation with $900 billion in coronavirus relief and $1.4 trillion to fund the government through Sept. 30. The so long-awaited bill was already priced in, so pair did not continue on the upside. Although, pair retreated lower after the news as traders took some profits on their long positions. Second, the Brexit trade deal, was welcome from both the EU and the UK and this brought some additional downside pressure on the pair as UD Dollar become stronger on the deal.
Going into this week, traders will need to be extremely careful and alert, if really the news from both sides of Atlantic were priced in or remain to be priced in. The Christmas holiday seasons and the Equity markets closed sessions may hide surprises in this week’s trading session. A possible positive reaction in Equity markets on the news of US aid package approval and Brexit trade deal can create huge wave in EURUSD pair price action.
On the economic calendar we have on Wednesday, German retail sales with an expectation to be lower by -2.5% and US Chicago purchase managers’ index lower at 57
Technically, the picture is positive. Pair traded lower below 0.0% and above 23.6%. In this week’s trading session if the pair trades on the upside and breaks above 1,2270 gains will be accelerating with next level in focus the 1.2370 Alternative a downside trend will test 1.2115 (23.6%) as first reversal point. Our traders are waiting for a pullback around 1.2115 before starting buying the pair and targeting profits at 1.2270.
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed unchanged last week’s trading session on EU-UK trade deal. Finally, the two sides agreed on post Brexit deal after 4 years of negotiations. The trade deal has to be ratified by the UK and EU parliaments this week, although this is not something that can be revoked and worry traders. Under the deal, the EU has achieved a “level playing field,” meaning neither side can undercut the other with subsidies or similar. The agreement ensures that most goods traded between the EU and the U.K. won’t face new tariffs or quotas.
As for this week, traders will be more relaxed and watching the pair’s action mainly on economic indicators. A short trading week with only 3 days of trading, due to boxing day and new year’s holidays will be taken easily from market participants.
In the economic calendar, we have no release to follow.
Technically the pair is positive after last week’s close just above 0.0%. In this week’s trading session if pair continue on the upside, we are expecting as next level 1.3600 Alternative if pair resumes downside move, the first level to be retested is 1.3016 (23.6%) Our traders started selling the pair at 1.3500 targeting profits at 1.3016. We are expecting buyers to appear around 1.3016 targeting profits at 1.3500 and short sellers to continue selling on the way up.
For more detail economic calendar events please visit our live economic calendar on:
*The material does not contain an offer of, or solicitation for, a transaction in any financial instruments. 10TradeFX accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all your invested capital, so please make sure that you fully understand the risks involved.