Pair closed last week’s trading session marginally higher on mixed economic releases and on muted FOMC minutes. Fed kept silent on the last meeting and avoid adding any hawkish comments. On the other side, the ECB strategy meeting ends up somehow hawkish for the Euro Although no big change in the pair’s rate have been achieved as the markets are pricing in the current situation of Delta variant, spreading through the EU and the US. With the hawkish ECB on the one side highlighting that the central bank will consider symmetric inflation of 2 % and on the other hand a stronger US Dollar working as a safe-haven asset due to delta variant, the pair traded moreover unchanged.
As for this week, traders will be focusing on the economic releases and the possible harder restriction in many EU countries in order to control the fast spread of delta variant. Inflation reports from both the EU and the US will be the main actors behind any price action.
On the economic calendar we have on Tuesday, German Harmonized Index of Consumer Prices to remain unchanged at 2.1% and the US consumer price index lower at 4.9% On Wednesday, European industrial production expected lower at -0.1% and the US producer price index higher at 5.3% On Friday, European consumer price index core to remain unchanged at 0.9% and US Michigan consumer sentiment higher at 87
Technically, the picture is negative. Pair closed below (61.8%) at 1.1876. In this week’s trading session if the pair continues on the downside, we are expecting to test last week’s low at 1.1776, a break below this level will open the road to 1.1700 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 higher after another attempt to break lower. The initial downside move was due to the global spread of delta variant and especially in the UK. The government postponed the reopening until July 19th with warnings that could delay further if the delta variant continues spreading with the current speed. The upside move later during the weeks was due to a lower expectation of a US rate hike also due to the delta variant. The new virus might be proven as front wind for the global economic recovery.
As for this week, traders will be closely monitoring both the UK and US inflation numbers and the UK’s Government’s decision on reopening plans.
In the economic calendar, we have on Tuesday, BRC Like-for-Like retail sales pointing higher at 24% and Financial stability report. On Wednesday, the Consumer price index expected higher at 2.2% and retail sales unchanged at 0.3% On Thursday, the ILO unemployment rate to remain unchanged at 4.7%
Technically the pair is neutral after last week’s sharp recovery and close above 61.8%. In this week’s trading session if the pair continue to trades on the downside, a close below last week’s lower level of 1.3730 will be needed to keep the picture negative and open the road to 1.3676 (100%) Alternatively if the pair continues the upside first level to be retested is 1.3954 (50%). Our traders kept open their long positions at 1.4000 and 1.3837 targeting profits at 1.4200 We are expecting more aggressive buyers at 1.3700
For more detailed economic calendar events please visit our live economic calendar on:
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