Pair closed last week’s trading session marginally lower on up beat employment numbers. ADP employment came out better than expectations although the non-farm payroll came out worst than expected. Even though non-farm payroll was much lower than expectations market took the overall picture as positive after FED’s Jerome Powell said that, is not need a robust jobs report to start tapering, the chairman also highlighted that any negative reading could remain short-lived. On the ECB side during their September monetary policy release policymakers avoid commending on inflation rate as a factor for tapering their PEPP and this kept the Euro muted.
As for this week, traders will be focus on the FOMC meeting. No rate hike is expected on this meeting, although traders must pay attention on the timing of the bond buying tapering and signals on a potential future interest rate hike.
On the economic calendar we have on Tuesday, European ZEW Survey economic sentiment pointing higher at 37 On Wednesday, German Harmonized index of consumer prices expected lower at 3.4% US Consumer price index unchanged at 4% On Friday US retail sales expected lower at -0.2% and Michigan consumer sentiment higher at 74
Technically, the picture is negative Pair continues to trade below 1.1600 registering lower lows every week. If pair continues to trade on the downside this week and break below 1.1530 will accelerate losses down to 1.1500 Alternative if pair resumes upside a close above (23.6%) 1.1623 will be need to change the picture back to neutral. Our traders kept open their long positions at 1.1762, 1.1715 and 1.1600 targeting profits above 1.1800 we are expecting more aggressive buyers on the downside and some profit taking on the way up with the first sellers to appear above 1.7000
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher after non-farm payroll number disappointed investors. On the UK side the deployment of army in the gas distribution line has easy demand and helped the gas crisis normalizing. Even though, upside move was limited due to some headwind on GBP as Brexit difference with the EU on Northern Ireland and fishery differences with France are still weighing negative on the pair.
As for this week traders will be focus on the FOMC minutes in order to gather information about the future path of the FED. Traders will need to pay extra attention on the heavy economic calendar in the UK and the speech form BOE’s Canliffe.
In the economic calendar we have on Monday NIESER GDP pointing higher at 3.2% On Tuesday, BRC Like-for-Like retail sales lower at 0.3% ILO unemployment rate lower at 4.5% On Wednesday, Manufacturing production lower at 0.4% and Gross domestic product higher at 0.5%
Technically the pair is neutral after last week’s upside move and a close at 1.3618 In this week’s trading session if pair continues to trades on the upside and close above 38.2%, will open the road to 1.3700 Alternatively if pair trades on the downside, a close below 23.6% will change the picture to negative and accelerate losses down to 1.3400. Our traders kept opened their long positions at 1.3600 and 1.3415 targeting profits at 1.3800 We are expecting aggressive buyers on the way down and short sellers to appear above 1.3700
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