EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session lower mainly on US Dollar strength due to worldwide spreading of new coronavirus delta variant and on the dovish ECB meeting. As it was widely expected ECB maintained their dovish stance for now highlighting that the central bank is willing to keep interest rates low for longer. The lack of high impact economic events in both continents kept the pair lower and muted.
As for this week, traders will be focusing on the FED meeting. The central bank is not expected to hike rates on this meeting, although comments on how the bank will react to the fast-spreading of the new corona variant will give trades a clear picture and defy the US Dollar’s next move. On others, the only fundamental reason to keep things on hold for a 3rd week in a row is the delta variant spreading that continues adding negative economic sentiment on both continents and globally in general.
On the economic calendar we have on Monday, German IFO business climate pointing higher at 102.1 On Tuesday, US Durable goods orders expected lower at 2.1% On Wednesday, FOMC minutes will be release and a press conference will be followed. On Thursday, the German Harmonized index of consumer prices expected higher at 3% and US Gross domestic product higher at 8.2% On Friday German Gross domestic product expected higher at 2% European Consumer price index core lower at 0.8% European Gross domestic product higher at 13.2% and US Michigan consumer sentiment lower at 80.5
Technically, the picture is negative. Pair closed below (61.8%) at 1.1771. In this week’s trading session if the pair continues on the downside, we are expecting to test March’s low at 1.1700, a break below this level will open the road to 1.1600 alternatively if resumes upside and close above 61.8% on the 4H chart could accelerate gains toward 1.1970 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 alternatively 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 marginally lower after an attempt to break lower from the last 2 months’ range. The sharp downside move was due to the announcement that the Health Secretary catches covid, proving once again to the markets that something is wrong. Sajid Javid has been one of the most recent high-profile persons to test positive for coronavirus. With around 50,000 daily cases in the UK, and hundreds of thousands called to self-isolated, it obvious that GBP will have some strong head winds ahead.
As for this week traders will be closely monitoring the UK’s delta pandemic spreading and the possible reverse of restrictions. On the US Dollar side all eyes will be turned to the FOMC minutes due to be released on Wednesday.
In the economic calendar we have nothing to follow on the GBP side exempt from Monday’s, speech from BOE member Vlieghe. On his last speech he supported GBP by saying that the central bank should consider hiking rates and normalizing its monetary policy. Any move on the pair will be depending only on the US Dollar’s economic releases.
Technically the pair is negative after last week’s sharp downside move and close just on line with last week’s lower levels. In this week’s trading session if pair continue to trades on the downside, will retest last week’s lower level at 1.3560 a close below last week’s lower level of 1.3560 will keep the picture negative and open the road to 1.3357 (161.8%) Alternative if pair resumes the upside first level to be retested is 1.3900 (61.8%). Our traders kept open their long positions at 1.4000 and 1.3837 and 1.3671 targeting profits at 1.4200 We are expecting more aggressive buyers below 1.3560 Alternative if pair resumes upside move we are expecting short sellers and hedging positions above 1.3900
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