Pair closed last week’s trading session lower after an attempt to break higher. The initial move on the upside was due to FED’s Powell speech reinforcing once again that the central bank is willing to do more. On the ECB side, President Lagarde’s speech brought the pair sharp on the downside after commenting that the central bank is watching closely the European bond yields increasing and they don’t like this to continue happening so fast.
As for this week is pending to see how markets will react to Biden’s bill approval and Johnson and Johnson’s one-shot vaccine approval. Both news came out during the weekend so traders must be alert on how the markets will react. Inflation numbers are the main actors behind both central bank’s policies and should be closely monitored by traders. Extra attention for this week will be both speeches from ECB President Lagarde and FED’s Powell both worth to follow and gather any information on the central bank’s future policy.
On the economic calendar we have on Monday, German Markit manufacturing PMI with expectations to remain unchanged at 60.6, German Harmonized index of consumer price to remain unchanged at 1.6%, and US ISM manufacturing PMI higher at 58.9 On Tuesday, German retail sales expected higher at 5% European consumer price index lower at 1.1% On Wednesday, US ADP employment expected to show an additional 168K jobs US ISM services PMI to remain unchanged at 58.7 Thursday, European retail sales expected lower at -1.3% On Friday, German factory orders expected higher at -1% and US Nonfarm payrolls expected to show a 148K additional jobs with average hourly earnings lower at 5.1%
Technically, the picture is neutral. Pair closed just above 38.2% at 1.2072 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 and close below 1.2050 will 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 lower last week lower as it was widely expected. Bulls have taken some profits off the table while markets digested the overpriced GBP governed by the positive sentiment of the last few months due to vaccination program progress in a faster way that could bring an early recovery in the UK economy. While in the beginning of the week, markets applause Boris Johnson’s comments that reopening and softer lockdown measures are around the corner, later due to a sharp correction mentioned earlier and due to stronger US Dollar, the pair trader lower.
As for this week, traders will focus on FED’s Powell speech and US Dollars Nonfarm payrolls number.
In the economic calendar we have on Monday, Markit manufacturing PMI with the expectation to remain unchanged at 54.9 On Wednesday, Markit services PMI expected lower at 38.8
Technically the pair is positive after last week’s sharp correction on the downside. In this week’s trading session if the pair continues on the downside, we are expecting to test 1.3839 (38.2%) Alternative if the pair resumes on the upside, the first level to be retested is 1.4012 (23.6%) Pair’s sharp correction might bring the pair back to its multi-month uptrend channel. We are expecting our traders to start buying the pair at 1.3839 this week targeting profits at 1.4200 more aggressive long positions are expected at 1.3720 (50%) Alternative, if the pair resumes upside we may see short-sellers around 1.4100 targeting profits at 1.3800
For more detailed economic calendar events please visit our live economic calendar on:
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