Pair closed last week’s trading session higher erasing all previous week’s gains. The disappointing inflation rate and consumer confidence created some front winds for the US Dollar, adding doubts on what the FED’s next comments will be. The relatively hawkish FED in the last few months might turn dovish this month and let US Dollar depreciating farther. On the Euro side there is a completely silence from the ECB as we moving into the month of summer holidays and with economic releases in line with expectations, the Euro sentiment remains muted.
As for this week, traders will be focusing in the FOMC minutes due to be released on Wednesday. After a disappointing week on the economic calendar the FED will be a surprise.
On the economic calendar we have on Tuesday, European Gross domestic product, expected to remain unchanged at 13.7% US retail sales expected lower at -0.2% On Wednesday, European consumer price index to remain unchanged at 0.7% and FOMC to release their minutes. On Friday, German producer price index expected lower at 0.8%
Technically, the picture is negative. Pair retreated higher after rejected strong support at 1.1700 although, a close above (23.6%) is needed to change the picture from negative back to neutral. As far as the pair trades below (23.6%) the picture is still negative with increasing chances to retest 1.1700 this week. If pair continues on the upside this week and closes above 23.6% could accelerate gains to 1.1930 (38.2%) Our traders kept open their long positions at 1.1970, 1.1865 and 1.1762 targeting profits above 1.2240 we are expecting stop losses to be triggered if the pair breaks and closes below 1.1700. Alternatively, a move on the upside could bring short sellers around 1.2000 targeting profits at 1.1700
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session unchanged. The disappointing economic release from the UK were compensated with the disappointing US releases and after sea saw the pair, ended on the same level as previous week.
As for this week traders will be closely monitoring the FOMC minutes due to be release on Wednesday, and the Economic release in the UK, mainly on the CPI number.
In the economic calendar we have on Tuesday, ILO unemployment rate to remain unchanged at 4.8% and average earnings higher at 8.7% On Wednesday, consumer price index expected lower at 2.2% retail price index lower at 0.3% On Friday Gfk consumer confidence expected lower at -8 and Retail sales lower at 6.4%
Technically the pair is neutral after last week’s close above 61.8% level at 1.3869 In this week’s trading session if pair continue to trades on the upside, will test 50% level at 1.3915 a close above 1.3915 will change the picture to positive and open the road to 1.4000 (38.2%) Alternatively if pair trades on the downside first level to be retested is 1.3800 last week’s lower level. Our traders kept open their long positions at 1.4000, 1.3837 and 1.3671 targeting profits at 1.4200 We are expecting short sellers to appear at 1.4000 targeting profits at 1.3600
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