Pair closed last week’s trading session higher, mainly on US Dollar weakness, after FED maintain the same policy using the same language as the last meeting. FED’s Powell comments that the FED is looking at actual progress rather than forecasts. In Addition to that Powell said that the central bank will act only when the economy fully recovers something that waived once again hopes for a rate hike. The overall FOMC was seen as dovish and this pushed the pair higher.
As for this week, traders will continue monitoring economic releases in order to get direction on whether the US or Europe will perform as expected or even better. Economic outcomes will be the main driver for the coming sessions. Euro may have to face some downside pressure in the coming week as Germany halted AstraZeneca Vaccine and going into full lockdown. Germany now is turning into Russia’s SPUTNIK vaccine in order to resume the vaccination program and control the virus spread.
On the economic calendar we have on Monday, European retail sales pointing higher but still negative at -5.7% On Tuesday, German ZEW survey economic sentiment expected higher at 79.5 and US Consumer price index higher at 1.6% On Wednesday, European industrial production expected lower at 0.5% On Thursday, German Harmonized index of consumer prices to remain unchanged at 2% and US retail sales higher at 5.5% On Friday, European consumer price index to remain unchanged at 0.9% and US Michigan consumer sentiment higher at 88.9
Technically, the picture turned from negative to neutral. Pair closed just above 61.8% at 1.1900 In this week’s trading session if the pair continues on the upside, we are expecting to test the next resistance of 1.1972 (50%) If the pair resumes downside and close below 61.8% will change the picture to negative with next level in focus the 1.1570 (100%) 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 near (100%) alternative if pair trades on the upside we are expecting short sellers to take control above 1.1973
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session lower mainly on the lack of any economic releases and on concerns about AstraZeneca’s vaccine. Many countries in the EU are stopping the AstraZeneca vaccine and now turning on Johnson and Johnson and Russian SPUTNIK vaccines. This is seen as negative for the UK economy and is drowning now GBP.
As for this week, traders will focus on Economic releases from the UK. Many of the economic releases are continue improving last period, if this will continue this week the overall economic outlook of the UK will be positive. If this positive bias continues, the pair may retread higher and resume its upside move.
In the economic calendar we have on Tuesday, BRC like-for-like retail sales pointing higher at 9.5% Manufacturing production negative but better than last time at -0.8% and Gross domestic product higher at 0.6%
Technically the pair is neutral to negative after closing below 50%. In this week’s trading session if the pair trades on the upside, we are expecting to test last week’s higher level of 1.3850 just above (38.2%) a close above this level will bring the pair back into an uptrend channel with the next level in focus, 1.4000. Alternative if pair continues on the downside and break and close below last week’s 1.3668, the first level to be retested is 1.3600 Our traders kept open their long positions at 1.3840 and 1.3727 targeting profits at 1.4000 More aggressive long positions are expected at 1.3600 (61.8%) Alternative, if pair continue on the upside we may see short-sellers around 1.4000 targeting profits at 1.3700
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