EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session unchanged, after an attempt to break higher. ECB was as hawkish as it was expected, signalling that the central bank will waive its QE program earlier than it was initially scheduled, and signal that rate hikes will come after the QE will end. Although the pair did not manage to keep bullish momentum as the war in Ukraine is keeping traders and investors on the US Dollar side. A new record high in the US inflation, added more demand on the US Dollar as the rate hike of 0.5% is imminent on the next FED meeting.
As for this week, market participants will focus on the FOMC interest rate decision and press conference. The FED is expected to hike rates by 0.25%. This is already priced in and if it will happen the pair could recover some lost ground. If a surprise rate hike of 0.5% will take place, the pair could face more downside pressure. On the other hand, the war in Ukraine will be on the main stage for any price move. Any developments on a cease fire agreement, will have direct impact on the pair and can move the pair on the upside.
On the economic calendar we have on Tuesday, German ZEW Economic sentiment pointing higher at 49.3 and US producer price index lower at 8.1% On Wednesday, US retail sales expected lower at 0.6% and FED to hike rates by 0.25%.
Technically, the picture is negative after last week’s closed below (23.6%). Pair keeps trading into an oversold territory. In this week’s trading session If pair retreat on the upside we are expecting as first level to be tested the (38.2%) 1.1125 if breaks and closes above 1.1125 (38.2%), will retest 1.1200 (61.8%) Alternative if pair continues trading on the downside, a close below (0%) will keep the picture negative and accelerate losses down to 1.0800. Our traders are keeping open their long positions starting from 1.1350, till 1.0900 targeting profits at 1.1500. If pair recovers lost ground and trades on the upside we are expecting many long positions to be hedge with short positions at 1.1122 and short sellers to appear above 1.1200
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session lower on Russian-Ukraine war. As we have previously mentioned in our weekly reports, the impact of the Russian – Ukraine war will overshadow the economic events. With the UK economic releases coming out better than expected, still, the pair did not manage to change its negative outlook. Traders and Investors are running into US Dollar and adding downside pressure on the pair.
As for this week traders will focus on the FOMC minutes and BOE meeting. The FED is expected to hikes rates by 0.25% and the BOE to keep them unchanged. This is already priced-in on the exchange rate of the pair. Although a surprise 0.5% could accelerate losses on the pair, alternative a 0.25% and a surprise rate hike from BOE could push the pair sharp on the upside. The war between Russian and Ukraine will continue dominating markets and move the pair in either direction overshadowing once again the economic releases.
In the economic calendar we have on Tuesday, ILO Unemployment rate pointing lower at 4% and US producer price index lower at 8.1% On Wednesday, US retail sales expected lower at 0.6% and FED to hike rates by 0.25%. On Thursday, BOE will release their minutes, no rate hike is expected.
Technically the pair is negative after last week’s close below 23.6%. Pair entered into an oversold territory and sharp upside move could be triggered if short sellers will realize their profits. In this week’s trading session, if pair resumes upside, we are expecting to test 1.3172, alternatively, if continues on the downside and close below (0%), will open the road down to 1.2900 Our traders are keeping open their long positions at 1.3412, 1.3319, 1.3172 and 1.3034 targeting profits at 1.3600 We are expecting more aggressive buyers below 1.3000. Alternative if pair resumes upside, we are expecting short sellers to appear above 1.3400 targeting profits at 1.3100
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