Pair closed last week’s trading session higher on Dovish comments from FED’s Jerome Powell after commenting on Jackson Hole symposium, that even though the US economy is rapidly recovering and jobs are adding, the new delta variant might over come the recovery and create uncertainty. Avoiding to comment on bond tapering for the coming FED meeting was taken too dovish from markets and drove the US Dollar lower. On the Euro side, economic releases were better than expectations and that boosted the pair on the upside.
As for this week, traders will be focusing in the non-farm payroll number due to be released on Friday. A better than expected number will turn the pair sharp on the downside as comments from FED’s Powell highlighted that the employment numbers are one of the biggest catalysts on whether the central bank will tapper its bond buying program.
On the economic calendar we have on Monday German Harmonized index of consumer prices pointing higher at 3.4% On Tuesday, European consumer price index also expected higher at 1.5% On Wednesday, German retail sales expected lower at 3.2% US ADP employment higher at 500K and ISM Manufacturing PMI lower at 58.6 On Friday, European retails sales expected higher at 5.2% the US non farm payroll lower expected at 665K and the US ISM services PMI lower at 61.3
Technically, the picture is negative. Pair retreated higher and close at 1.1795 but still closed below (23.6%) As far as the pair trades below (23.6%) the picture is negative with increasing chances to retest 1.1700. If pair continues on the upside this week and closes above (23.6%) could accelerate gains to 1.1900 (38.2%) Our traders kept open their long positions at 1.1970, 1.1865, 1.1762 and 1.1715 targeting profits above 1.1970 We are expecting stop losses to be triggered if the pair breaks and closes below 1.1650. 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 higher mainly on US Dollars weakness. As mention ed above the dovish comments from FED’s Jerome Powell were more than enough to boost the pair on the upside. On the GBP side things are not very good. The rapid spread of delta variant increases doubts about the reopening plan of the UK government and creates uncertainty over the UK’s economic recovery.
As for this week traders will be closely monitoring the BOE monetary policy report and the US non-farm payroll number. A better than expected payroll number will bring the pair sharp on the downside as its already vulnerable on the UK’s risk events.
In the economic calendar we have on Wednesday, Markit manufacturing PMI to remain unchanged at 60.1 On Friday, Markit services PMI to remain unchanged at 55.5 and during Friday the BOE will release their monetary policy report.
Technically the pair is negative after last week’s upside move and close below 61.8% level at 1.3756 In this week’s trading session if pair continue to trades on the upside and close above 61.8%, will open the road to 1.3915 Alternatively if pair resumes downside will retest last week’s lower level at 1.3600 Our traders kept open their long positions at 1.4000, 1.3837 and 1.3671 targeting profits at 1.4200 We are expecting more aggressive buyers on the way down and short sellers to appear at 1.3856 targeting profits at 1.3600
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