EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session unchanged on mixed economic releases. The worst than expected ADP employment and better than expected non-farm payroll in the US, balanced the US Dollar reaction and kept the pair unchanged. From the Euro side investors are standing firm for this week’s ECB meeting and rate decision. Economist around the world are already sending signals for recession in the US, something that was confirmed by few big companies starting to reduce their staff.
As for this week market participants will mainly focus on the ECB meeting and rate decision. It is not expected a rate hike at this meeting, unless the central bank will surprise. The central bank is expected to confirm 0.5% rate hike in their July meeting and the end of their bond buying program. If a surprise rate hike will take place in this week’s meeting then the pair will continue trade higher for the coming sessions.
On the economic calendar, we have on Wednesday, the European Gross domestic product to remain unchanged at 5.1% On Thursday the ECB meeting and rate decision, following by the press conference. On Friday, US consumer price index, expected lower at 5.9% and US Michigan consumer sentiment lower at 56.9
Technically the picture is neutral after last week’s range trading session that kept the pair just below 38.2% In this week’s trading session if pair breaks and closes below 1.0620 (23.6%) will accelerate losses down to 1.0350. If pair manage to maintain recovery and close above (38.2%) could change the picture to positive and test next level of 1.0900 (50%). Our traders are net 100% long with positions opened between 1.1350 to 1.0500 targeting profits above 1.1350 we are expecting more aggressive long positions on the way down. Alternative if pair continues trading on the upside, we are expecting short sellers to appear around 1.1090 (61.8%)
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session lower on US Dollar’s strength due to the better than expected ISM manufacturing and non-farm payroll. The lack of any economic releases in the UK let the pair trade in the mercy of US Dollar.
As for this week, the trading conditions will remain the same. The lack of any economic release from the UK will keep the pair trading in the mercy of US Dollar. The higher than expected inflation rate in the US will dominate the pair and push it lower as it may force some FED’s officials rethinking the rate hike path. We have seen few Fed’s officials, last two weeks, signalling the pause of the rate hike due to inflation cooling. Although, things can change as the new package of sanctions against Russia has pushed the oil prices higher something that will boost inflation.
On the economic calendar we have on Tuesday, BRC like-for-like retail sales pointing lower at -3.5%. On Friday, US consumer price index expected lower at 5.9% and US Michigan consumer sentiment lower at 56.9
Technically the pair is neutral after last week’s close below 38.2%. In this week’s trading session if pair continues recovering on the upside and breaks above 38.2% we are expecting to test 1.2900 (50%) Alternatively if pair resumes the downside, a break below (23.6%) could accelerate losses down to 1.2200 Our traders are net long 100% with positions opened between 1.3412 to 1.2700 targeting profits above 1.3400 We are expecting new buyers on the way down and short sellers to appear around 1.3170
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