EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session higher as market participant are digesting the last hawkish FOMC. With the central banks’ officials not commenting anything else exempt from what was expected, the pair had the chance to recover last week’s lost ground. Political tensions between the EU and Russia have been overshadowed by the agreement between US-EU on trade deal relations while resolving the differences on aluminium and steel tariffs. Economic release from both sides was in line with expectations. US PCE inflation keeps pointing higher, without adding downside pressure on the pair.
As for this week, traders will be focusing on the US Nonfarm payroll number. A better-than-expected release will add more pressure on FED to increase rates sooner. Traders must be alert and cautious on the new Covid-19 Delta variant as is spreading fast in Europe and could cause the return of restrictions and partial lockdowns.
On the economic calendar we have on Tuesday, the German Harmonized Index of consumer prices pointing lower at 2.1% On Wednesday, the European core consumer price index expected lower at 0.9% and US ADP employment expected lower at 600K On Thursday, German retail sales expected higher at 10.1% and the US ISM manufacturing PMI higher at 61.5 On Friday, Nonfarm payrolls expected higher at 675K.
Technically, the picture is neutral. Pair rejected (61.8%) and close just below (50%) at 1.1935. In this week’s trading session if the pair continues on the upside, we are expecting to test next level at (38.2%) 1.2062 a break above this level will open the road to 1.2170 (23.6%) alternative if resumes downside and close below 61.8% on the 4H chart could accelerate losses and test 1.1735 Our traders kept open their long positions at 1.1970 and 1.1865 targeting profits above 1.2240 we are expecting more aggressive long positions at 1.1700 alternative a break on the upside could bring short-sellers around 1.2070 targeting profits at 1.1750
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session higher after a full recovery from last week’s sell-off. Traders were pricing in a hawkish BOE, unfortunate the central bank disappointed traders with its unexpected dovish stance. Additional downside pressure on GBP is added as the new Delta variant of coronavirus is spreading in the UK and keeping the government on hold on its decision to offer softer lockdown restrictions.
As for this week, traders will be closely monitoring the speech from BOE governor Bailey and the US nonfarm payroll release.
In the economic calendar, we have on Wednesday, Gross domestic product with expectations to remain unchanged at -1.5% On Thursday, Markit manufacturing PMI unchanged at 64.2
Technically the pair is neutral after rejecting support at 1.3800 and close above (38.2%) at 1.3880 In this week’s trading session if the pair trades on the downside and close below 38.2% will change the picture to negative and will open the road to (50%) Alternative if pair resumes the upside first level to be retested is 1.4000 (23.6%). Our traders kept open their long positions at 1.4000 and 1.3837 targeting profits at 1.42000 We are expecting more aggressive buyers at 1.3700
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