Pair closed last week’s trading session higher, mainly due to the dovish speech of FED’s Jerome Powell, highlighting once again that the central bank will keep interest rates unchanged for as long as it needs. Even though the US labour market improves, the main target of the FED is to bring inflation above 2%. On the Euro side, inflation came in unchanged but below expectations, without to create and significant price move.
As for this week, traders will once again focus on the economic calendar and technical levels of the pair. The biggest events for this week will be Wednesday’s FOMC minutes and ECB monetary policy meeting accounts. Even though the FED is expected to maintain its monetary policy unchanged, traders should closely follow the comments to gather information on how the FED looks into the economic growth and future policy.
On the economic calendar, we have on Monday, European industrial production pointing lower at -0.6% On Tuesday, European gross domestic unchanged at -5.1% On Wednesday, US retail sales expected unchanged at 1.5% and FOMC will release their minutes. On Thursday, ECB will release their minutes and later European consumer confidence expected lower at -15 On Friday, German Markit manufacturing PMI expected lower at 56.5 German Markit PMI composite lower at 50.3 European PMI composite higher at 48.1 and US Markit manufacturing PMI lower at 58.5
Technically, the picture is neutral. Pair closed between 38.2% and 23.6% at 1.2118 after a failed test of resistance at 1.2170 (23.6%) In this week’s trading session if the pair continues the upside and break and close above (23.6%) 1.2170, the picture will be turned to positive with next level 1.2343 (0%) if pair continues 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 after last 2 positions at 1.2060 and 1.1970 took profit at 1.2100 If pair continues the upside, we are expecting sellers to appear above 1.2170 targeting profits at 1.1970 Alternative, on the downside buyers will start opening long positions at 1.2060 and 1.1970 targeting profits at 1.2170
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed higher last week as economic indicators improving and Vaccination program in line with the Government’s target. Boris Johnson’s comments, that country will get out of the lockdown sooner than expected, boosted positive sentiment which resulted in stronger Pound.
As for this week, traders will focus on the economic releases and on the technical levels of the pair. Few BOE MPs are speaking during this week without to expect any significant comments in their speech.
In the economic calendar we have on Wednesday, Consumer price index pointing lower at 0.5% and retail price index lower at 0.5% On Friday Gfk consumer confidence expected better than last6 time at -27 Retail sales lower at -1% Markit manufacturing PMI lower at 54 and Markit services PMI higher at 40.5
Technically the pair is positive after last week’s upside move and close sharp higher above 0% at 1.3838. In this week’s trading session if pair continues the upside, we are expecting to test 1.3950 Alternative if pair retreats on the downside, the first level to be retested is 1.3702 0% Pair is currently trading into overbought territory and caution need to be in place for any sharp correction on the downside. We are now navigating into a period of technical vs Fundamentals. Both scenarios, price relocation on the upside and sharp correction on the downside are on the table. Our traders stop loss all their short positions. We are expecting buyers to appear at 1.3702 targeting profits above 1.3900 and short sellers to start selling at 1.4300 the higher level of 2018.
For more detail economic calendar events please visit our live economic calendar on:
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