Pair closed last week’s trading session lower, even after FED erased any hopes for a rate hike until 2023. Although FED was dovish in their last minutes, markets took the minutes as positive for the US Dollar as FED canceled its SLR exemption to banks forcing them to sell more bonds. On the other side, Euro is facing some headwinds as many EU countries are stopping vaccinations, claiming that AstraZeneca’s covid-19 vaccine causes some blood colt. Germany, Italy, and France are entering into new lockdowns as the 3rd wave of covid-19 infections is back into European’s lives.
As for this week, all eyes will be turned on FED’s Powell’s speech and, on the 3rd, wave of covid-19 infections and new lockdowns. Governments are trying to calm down people by promoting the AstraZeneca vaccine, as side effects have been traced only to a minor population with other diseases. WHO, highlights that the side effects are very normal as any other kind of vaccination.
On the economic calendar we have on Wednesday, German Markit Manufacturing PMI with expectations to be higher at 60.9, German Markit PMI composite, higher at 51.8, European PMI composite, higher at 49.1. US Durable goods orders expected also higher at 0.7% US Markit service PMI higher at 60.2 On Thursday, German Gfk consumer confidence expected at -11.8 US Gross domestic product expected to remain unchanged at 4.1% On Friday, German IFO business climate expected higher at 93 and US Michigan consumer sentiment higher at 83.5
Technically, the picture is neutral. Pair closed above 61.8% at 1.1905 In this week’s trading session if the pair trades on the downside and break and close below (61.8%), the overall picture will become negative with next level in sight 1.1615 (100%) If pair continues the upside and close above 50% will change the picture to positive. Our traders keeping open their long positions at 1.2174, 1.2060, 1.1972, and 1.1878 targeting profits at 1.2343 we are expending more aggressive buyers below (61.8%) alternative if pair trades on the upside, we are expecting short sellers to take control above 1.2170
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading lower mainly on FED’s minutes canceling its SLR exemption to banks forcing them to sell more bonds. From the UK Pound side, things look better with vaccination progress better than expected and the BOE reiterates that the UK economy will be back on full recovery earlier than expected.
As for this week, traders will focus on Inflation numbers. BOE comments that inflation might be back to 2% target very soon is taken as positive from markets as higher inflation is translated into a rate hike. All eyes on FED’s Powell’s and BOE’s Bailey’s speeches during this week’s session.
In the economic calendar we have on Thursday ILO unemployment rate higher at 5.2 Average earnings higher at 5% On Wednesday, consumer price index expected higher at 0.8%, retail price index higher at 0.5% and Markit services PMI higher at 51On Friday, retail sales expected at -2.5%
Technically the pair is neutral after closing above 38.2%. In this week’s trading session if the pair trades on the upside, we are expecting to test 1.4000 (23.6%) Alternative if the pair continues the downside and break below 38.2%, first level to be retested is 1.3782 that will open the road to (50%) if breaks. The pair continue trading within its multi-month uptrend channel. Our traders kept open their long positions at 1.3840 targeting profits at 1.4200 more aggressive long positions are expected at 1.3720 (50%) Alternative, if the pair continue on the upside, we may see short-sellers around 1.4100 targeting profits at 1.3800
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