EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session unchanged after both sides, the EU and the US show relatively improved economic outlook. With the US and most precise Biden administration, continuing printing money and supporting the economy is creating a positive view for markets and this is keeping the US Dollar stable for now. Even though printing money is supporting the economy, still is not a long-term solution as this is creating an unprecedented government debt. never seen before since World War II and creating a vulnerable situation for the US Dollar that may not be sustainable in the future.
As for this week, traders will be focusing on the US nonfarm payroll figure and the US and EU inflation figures as its approaching central banks’ targets and this could trigger a rate hike earlier than expected. Already had the first signal from Quarles last week saying that it might be appropriate to begin such a discussion in one of the upcoming meetings echoing the sentiment from the meeting minutes. Despite the comments’ subtlety and conditionality, they were enough to send the greenback higher. Traders must closely monitor any FED’s officials’ comments as more of them may join the hawkish club.
On the economic calendar we have on Monday, German Harmonized index of consumer prices pointing higher at 2.4% On Tuesday, European consumer price index expected higher at 1.9% and US ISM manufacturing PMI higher at 61. On Wednesday, German retail sales expected lower at -0.3% On Thursday, US ADP employment expecting to show 545K new jobs ISM services PMI expected higher at 62.9 On Friday, European retail sales expected lower at 9.6% and US nonfarm payroll expected a 621K new jobs with a drop on Average hourly earnings at 0.2%
Technically, the picture is positive. Pair closed just above 23.6% at 1.2192 and this keeps a positive bias for the pair. In this week’s trading session if the pair continues on the upside, we are expecting to test the next resistance of 1.2240 with an extension at 1.2341 If the pair resumes downside and close below 38.2% will change the picture back to neutral with the next level in focus the 1.1973 (50%). Our traders kept open their short positions at 1.2169 and 1.2240 targeting profits at 1.1973 We are expecting more aggressive sellers at 1.2340 Alternative if pair resumes downside buyers will appear around 1.2000 targeting profits at 1.2170
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session higher on BOE’s Vlieghe comments, hinted the bank could raise rates in early 2022. GBP manage to keep higher levels even though we had some inter-government turbulences when Dominic Cummings said that Boris Johnson is unfit to be prime minister. The political scandal surrounding the handling of the pandemic has been grabbing attention and also weighing on the pound.
As for this week, traders will closely monitor the speech of BOE Governor Bailey and the economic release from both sides in the UK and the US with the biggest actor the US nonfarm payrolls.
In the economic calendar, we have on Tuesday Markit Manufacturing PMI to remain unchanged at 66.1 On Thursday Markit services PMI Unchanged at 61.8 and BOE Monetary policy report.
Technically the pair is positive after keeping trading higher and flirting with 0.0% level. In this week’s trading session if pair trades on the upside and close above 1.4250 will open the road to the next level of 1.4350 Alternative if the pair resumes the downside the first level to be retested is 1.4000 (23.6%). Our traders are waiting for a pullback around 1.4000 to start buying the pair again. We are expecting short sellers to appear at 1.4250 targeting profits at 1.4000
For more detailed economic calendar events please visit our live economic calendar on:
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