EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session while both central banks the FED and the ECB maintain the same policy line. Both banks are willing to keep interest rates and accommodative policy unchanged for as long as needed. Without any surprising fundamentals and economic events, the pair kept its exchange rate within the same levels as last week.
As for this week, traders will focus on the economic calendar and technical levels of the pair. The biggest catalyst is the ECB’s President Lagarde speech, FED’s Powell speech, and the vaccination program in many EU countries. With many countries refusing the use of AstraZeneca vaccine and the disrupting flow of other vaccine doses in the EU, is something that brings questions on how fast the vaccination program in the EU will be hit the target of March 2021. Any delay in the vaccination program will result in a delay in removing lockdown measures and may cause further delay in economic recovery.
On the economic calendar we have on Monday, German IFO business climate pointing higher at 90.5 On Tuesday, European consumer price index to remain unchanged at 1.4% On Wednesday, German gross domestic product expected lower at -4.1% On Thursday, German Gfk consumer survey expected at -14 European consumer confidence at -14.8 US Durable goods expected higher at 1.1% and US Gross domestic product higher at 4.1% On Friday US core personal consumption expenditure expected lower at 0.1% and Michigan consumer sentiment higher at 76.4
Technically, the picture is neutral. Pair closed between 38.2% and 23.6% at 1.2118 In this week’s trading session if the pair trades on the upside and break and close above (23.6%) 1.2170, the picture will be turned to positive with the next level in sight 1.2343 (0%) If pair trades on the downside will need to break and close below 1.2050 to change the picture to negative. Our traders keeping open their long positions at 1.2174 and 1.2060 targeting profits at 1.2343 we are expending more aggressive buyers at 1.1978 alternative, if pair trades on the upside, we are expecting short sellers to take control above 1.2256
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed higher last week despite weaker than expected economic indicators. With the government signaling the end of lockdowns and the Vaccination program online with Government’s target traders’ sentiment is positive and continue boosting GBP.
As for this week, traders will focus on PM Boris Johnson’s speech to gather information on when and how the government will reopen markets and remove any lockdown measures. Economic releases will be the main catalyst for next week as all the old technical levels have been invalidated.
In the economic calendar, we have only on Tuesday, Claimant count change pointing higher at 35K a better-than-expected number will signal that deteriorated employment of pandemic belongs to the past as many market sectors are coming back to normality.
Technically the pair is positive after last week’s continuation on the upside closing at a multi-year high of 1.4000 In this week’s trading session if the pair continues the upside, we are expecting to test 1.4100 Alternative if the pair retreats on the downside, the first level to be retested is 1.3834 Pair is currently trading into overbought territory and caution need to be in place for any sharp correction on the downside. Our traders stay on the side and waiting for a major correction on the downside before they jump into long positions. As the old technical levels are invalidated, we are using new levels on the 4H chart to help traders tracing potential levels of retracement.
For more detailed 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.