EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session lower on the lack of any high impact events, and on the anticipating pricing-in of a rate hike in the US. The persisting high inflation figures, might result in a rate hike earlier than market anticipate. A relatively calm week kept the pair trading within the same range, mostly technically related.
As for this week market participants will focus on FOMC meeting and press conference. The FED is already preparing the market for three rate hikes in 2022 with the first one to be taking place in March 2022. Although the inflation might push FED for faster rate hike with the first one to be in February 2022. On this week’s FOMC everything will be cleared out. A more hawkish FED will push the pair lower, an unlikely dovish stance will push the pair higher.
On the economic calendar we have on Monday, German Markit manufacturing PMI pointing lower at 57 German Markit services PMI lower at 49.2 European Markit PMI composite lower at 52.6 On Thursday US Durable goods order expected lower at -0.5% US Gross domestic product higher at 5.6% On Friday, German gross domestic product expected lower at -0.2% US Core personal consumption unchanged at 0.5% and Michigan consumer sentiment lower at 68.6
Technically, the picture is neutral as pair closed above (23.6%). If pair continues to trade on the upside and breaks and closes above 1.1500 (61.8%), will change the picture to positive and accelerate gains with the road open for 1.1700 Alternative if pair resumes downside, a close below (23.6%) will change the picture back to negative and open the road to 1.1250. Our traders took profit their short position opened at 1.1445 and turn long at 1.1310 targeting profit at 1.1500 we are expecting more aggressive buyer below 1.1300 Alternative if pair turn higher we are expecting short sellers to appear at 1.1500 targeting profits at 1.1300
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session lower on Boris Johnson pressure to resign due to the Downing street party back in 2020. More votes are coming in 1922 committee with the risk of initiating a no confidence voting as soon as this week. On the economic calendar the November retail sales disappointed investors and pushed the pair even lower.
As for this week traders will be focus on the FOMC meeting and press conference. No rate hike is expected at this meeting, although a close look on the minutes and speech from FED’s Powell will guide investors whether the FED will keep their hawkish tone and hike rate as it is expected three times in 2022. On the GBP side the most important risk event is the no confidence vote for Boris Johnson. If such a case, Boris will be forced to resign something very negative for the GBP that will result in sharp downside move of the pair.
In the economic calendar we have on Monday, UK Markit services P<I pointing higher at 55. 6 On Thursday US Durable goods order expected lower at -0.5% US Gross domestic product higher at 5.6% On Friday, US Core personal consumption unchanged at 0.5% and Michigan consumer sentiment lower at 68.6
Technically the pair is neutral after last week’s closed below 61.8%. In this week’s trading session if pair continues on the upside, we are expecting to test 1.3746, alternatively, if resumes downside and close below (50%), will change the picture back to negative and open the road down to 1.3430 Our traders took profit all their short positions opened at 1.3584 and 1.3695 We are expecting the first long positions to appear at 1.3500 targeting profits above 1.3700 Alternative if pair resumes upside new short sellers will appear above 1.3700 targeting profits at 1.3500
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