EURUSD Closed the week lower on high demand of US Dollar safe haven asset after investors and traders are weighting the escalating US-China tensions. US President Trump ordered US companies not to do any business with Chinese companies WeChat and TikTok. Nonfarm payrolls came out better than expected and this gave additional strength to US Dollar.
Our traders expecting downside momentum to continue this week as a result of both fundamentals and technical reversal of the pair. Traders and investors will continue to follow any response from China as a retaliation of the US decision on banning Chinese media companies.
On this week’s economic calendar, we have on Tuesday, European ZEW survey expected at 59.9 German ZEW survey at 58 and US producer price index higher at 0.3% On Wednesday, European industrial production expected at 10% and US consumer price index at 1.2% On Thursday, German Harmonized index of consumer prices expected at 0% Friday, European gross domestic expected to be negative -15% US retail sales 1.7% and Michigan consumer sentiment at 71.5
Technically, the picture is positive. Pair retreated lower below 161.8% as it was expected. In this week’s trading session if the pair continues on the downside we are expecting as next level 1.1545 (last break out level strong resistance now acting as support). Traders are expecting the downside correction that could bring the pair back to 100% 1.1400. Our traders keeping open their short positions opened between 1.1000- 1.1900 We are buyers to take control at 1.1545 and sellers to take profits on their short positions opened above 1.1800
GBPUSD closed the week lower amid US Dollar’s strength. BOE kept interest rates and asset purchase program unchanged. Even though, Governor Baily was optimistic that UK will recover faster than anticipated, investors and traders braced for more easing programs to be follow as second wave of covid-19 is inevitable and signs of economic slowdown are gathering around trader’s sentiment. As BOE said economic recovery is depending on pandemic evolution, so as traders will continue to monitor the virus spreading and how UK government will respond to harder restrictions and possible second general lockdown.
On this week’s economic calendar, we have On Tuesday, ILO unemployment rate pointing higher at 4.2% average earnings negative at -1.2% On Wednesday, manufacturing production expected higher at 10% and gross domestic product negative at -20.02%
Technically the pair is still positive even after last week’s closed lower at 1.3050. If pair breaks and close above 1.3150 (last week’s high) we could see more gains with first level to be tested at 1.3257 just below (100%) in the coming sessions. Alternative a close below 1.3050 will resume downside to retest 1.2714 61.8%. Our traders keeping open their short positions opened at 1.2700 1.3016 and 1.3150 targeting profits at 50% 1.2470 we are expecting more aggressive sellers this week if pair continue upside, alternative, if pair retreat lower we are expecting new buyers to appear as from 1.2700 and more aggressive buyers at 1.2470 (61.8%) with our sellers to take profit of their short positions
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