EUR/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session lower, mainly on jobs number of 916K beating expectations of 600K. In an eastern holiday week with lack of volume and liquidity pair manages to recover some lost ground, although after non-farm payrolls figure pair started to retread lower. Compare to the positive number, the volatility was relatively low and the downside move limited. This is due to the fact that the huge numbers should be continue coming in for many months ahead until US labor market will come back to full employment as it was before the pandemic
As for this week, and for the next trading sessions, traders will continue focusing in the FOMC minutes, on FED’s chair Powell speech and economic indicators from both sides of the Atlantic as the US economy performs better than expected and the EU economy still struggling with vaccinations and 3rd wave of covid-19 infections that is driving many countries into 3rd lockdown starting as from Tuesday when the eastern celebrations will finish.
On the economic calendar we have on Monday, US ISM services PMI pointing higher at 58.5 On Tuesday, German Markit services PMI expected lower at 51.3 and European Markit PMI composite at 52.5 On Thursday, German factory orders lower at 1% On Friday German industrial production expected higher at 1.5% and US producer price index higher at 2.7%
Technically, the picture is negative. Pair still trading below 61.8% at 1.1756 In this week’s trading session if the pair continues on the downside, we are expecting to test last year’s support at 1.6115 (100%) If pair resumes on the upside and close above 61.8% will change the picture to neutral with next level in focus the 1.1973 (50%) Our traders keeping open their long positions at 1.2174, 1.2060, 1.1972 and 1.1878 targeting profits at 1.2343 we are expending more aggressive buyers near (100%) alternative if pair trades on the upside we are expecting short sellers to take control above 1.1973 Pair entered into the 2020 range of 1.1615 – 1.2000 and is expected to remain within the same range for next few months.
GBP/USD FUNDAMENTALS AND TECHNICALS
Pair closed last week’s trading session higher on vaccination news and on the first time ever zero registered death from covid-19. With that positive news on covid-19, UK is on track of fast economic recovery and this is pushing GBP higher. Although on Friday we have seen some downside pressure on the pair mainly due to better than expected nonfarm payrolls number in the US.
As for this week, traders will focus on FOMC minutes and FED’s Powell speech.
In the economic calendar, we have on Wednesday, Markit services PMI with expectations to remain unchanged at 56.8 and on Friday the BOE will release their quarterly bulletin for Q1
Technically the pair is neutral after closing below 38.2%. In this week’s trading session if the pair trades on the upside, we are expecting to test last week’s higher level of 1.3850 just above (38.2%) a close above this level will bring the pair back into the uptrend channel with the next level in focus of 1.4000. Alternative if pair continues on the downside and break and close below 50%, first level to be retested is 1.3600 Our traders kept open their long positions at 1.3840 and 1.3727 targeting profits at 1.4000 More aggressive long positions are expected at 1.3600 (61.8%) Alternative, if pair continue on the upside we may see short-sellers around 1.4000 targeting profits at 1.3700
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