Pair closed last week’s trading session lower on UD Dollar’s strong fundamentals outcome. Although comments from FED officials, that the bank is not willing to hike rates any time soon, did not push the pair higher as economic indicators showed that the US economy is poised to recover faster than other economies. Reducing covid cases in the US is pushing market sentiment higher and equity markets, as a result, US Dollar to become stronger, this time not as a safe-haven asset but as a stronger US economy that might change FED’s language from dovish to hawkish
As for this week, traders will mainly focus on technical rather than fundamentals as this week is surrounded only by the light economic calendar and in few FED officials’ speeches.
On the economic calendar, we have on Monday, German industrial production pointing lower at 0.3%. On Wednesday, German Harmonized index of consumer prices to remain unchanged at 1.6% US Consumer price index to remain unchanged at 1.6%. On Friday, Michigan consumer sentiment expected lower at 75.7
Technically, the picture is neutral. Pair closed below 38.2% at 1.2050 after tested support at 1.1970 (50%) In this week’s trading session if the pair continues the upside and break and close above (38.2%) 1.2050, the picture will be turned to positive with next level in sight 1.2170 (23.6%) if pair continues the downside will need to break and close below 1.1970 to change the picture to negative. Our traders keeping open their long positions at 1.2174, 1.2060 adding long new positions at 1.1970 targeting profits at 1.2350 and triggering trailing stops above 1.2100 If pair continues the upside, we are expecting sellers to appear above 1.2170
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed higher last week after BOE shake the pair with its hawkish comments. Although there was no change in policy as it was widely expected, the speech after the minutes pushed the pair sharp on the upside after BOE Governor Bailey said that the bank does not intend to use negative interest rates, the Q4 economic outlook is expected to improve and Vaccines are helping the economy to recover soon. All the above mentioned was the reason for the fast recovery that erased all losses from the first 2 trading session of last week.
As for this week, traders will focus on BOE Governor’s speech and in the economic releases.
In the economic calendar, we have on Tuesday BRC like-for-like retail sales pointing higher at 6%. On Wednesday, NIESER GDP expected higher at 0.9%. On Friday, Manufacturing production expected higher at 0.9% and Gross domestic product lower at 15.8%.
Technically the pair is positive after last week’s upside move and close above 0% at 1.3735. In this week’s trading session if pair continues the upside, we are expecting to test 1.3850 Alternative if pair retreats on the downside, the first level to be retested is 1.3560 Our traders keeping open their short positions at 1.3500 and 1.3600 and 1.3700 targeting profits at 1.3150. Stop losses will be triggered to all position if pair close above 1.3750 on the 4H chart. We are expecting buyers to appear below 1.3450 till 1.3150 targeting profits above 1.3700 and short sellers to continue selling on the way up or taking profits on the way down.
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