EUR/USD FUNDAMENTALS AND TECHNICALS

Pair closed last week’s trading session unchanged after ECB disappointed short-sellers by avoiding using a dovish tone as it was expected by short-sellers. ECB extended the PEPP program by 500 billion euros through March 2022. Although ECB’s president Christine Lagarde mentioned that ECB is monitoring the exchange rate between Euro and US Dollar, she avoided commenting farther if the bank is willing to intervene. This was taken as positive by markets and kept the pair trading on sessions higher levels.

Going into this week traders will focus on FOMC meeting. Although a no change in policy is expected at this meeting, once again traders will focus on the language the FED’s Chair will use in order to prevent US Dollar from continue devaluating. FAD’s pending approval on COVID-19 vaccine of Pfizer is another point that must be taken into consideration as such approval will keep traders and investors away from safe-haven US Dollar.

On the economic calendar, we have on Monday, European industrial production pointing higher at 2%. On Tuesday, US Industrial production expected lower at 0.3%. On Wednesday, German Markit manufacturing PMI expected lower at 56.5 German Markit PMI composite lower at 50.7 European Markit PMI composite higher at 50.5 and US Markit services PMI lower at 56.5 On Thursday, European consumer price index expected to remain unchanged at 0.2% On Friday German IFO expectations expected higher at 92.8

Technically, the picture is positive. Pair traded unchanged around year’s higher levels. In this week’s trading session if the pair trades on the upside and breaks above 1,2177 gains will be accelerating with next level in focus the 1.2300 Alternative a rejection and close below 1.2177 may resume downside and test 1.2050 (23.6%) as first reversal point. Our traders are waiting for a pullback around 1.2050 before starting buying the pair and targeting profits at 1.2177. A second close below 1.2186 may give the signal to short-sellers, that rally is over and we may see new short positions at this level

 

 

 

GBP/USD FUNDAMENTALS AND TECHNICALS

Pair closed sharply lower last week trading session on disappointing Brexit negotiation outcome. Both sides send negative comments and warned markets that is almost clear that the UK will leave the EU without a trade deal by the end of the year. The Brexit disappointing outcome was taken as extremely negative from markets as a no-deal will force the UK under UN trade treaty meaning import taxes will be applied on all goods coming in and going out of the UK. Such taxes will create disruption on many good and may result in food shortages.

As for this week, traders will focus mainly on the Brexit negotiation’s outcome, as during the weekend a new series of talks will take place in order to break the differences between the 2 sides. BOE will release their minutes for this month’s meeting. No change in policy is expected at this meeting.

In the economic calendar, we have on Tuesday, ILO unemployment rate pointing higher at 5.1% and average earnings higher at 2.3%. On Wednesday, consumer price index expected lower at 0.6% retail price index higher at 0.2% and Markit services PMI higher at 50.5 On Friday Gfk consumer confidence expected lower at -30

 

Technically the pair is positive even after last week’s sharp drop, considering to be a short live correction for now.  In this week’s trading session if pair resumes upside, we are expecting to retest 1.3500 Alternative if pair continues on the downside, the first level to be retested is 1.3016 (23.6%) Our traders took profit all their short positions. We are expecting buyers to appear at 1.3016 and short-sellers above 1.3300

For more detail economic calendar events please visit our live economic calendar on: 

https://10tradefx.com/economic-calendar/

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