EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session lower on ECB’s Dovish minutes. The central bank kept interest rate unchanged as it was widely expected. The press conference from ECB’s president Christine Lagarde added downside pressure on pair as it waived any hopes of a rate hike in the near future. The central bank did not mention, whether will normalize monetary policy or reduce its QE programme and this was taken dovish by markets, widening the gap divergence between the two central banks the ECB and the hawkish FED. The final round in French elections is another reason behind Euro’s downside move as polls are showing Le Pen just a breath away from Macron.
As for this week, market participants will mainly focus on the war in Ukraine. After Ukrainian forces hit the Russian warship MOSCKWA, Russia warned that will intensify shellings in Kiev. Russian ambassador in the US have given a written noticed to the US warning that, if the US and its allies will continue to provide weapons to Ukraine and fueling the conflict, Russia will strike unexpected military facilities in NATO territory. FED’s Powell speech will also be noticed by market participants although the Russian thread will be in the first stage on moving prices.
On The economic calendar, we have on Friday, German manufacturing PMI pointing lower at 54.4 and European composite PMI pointing lower at 54
Technically the picture is negative after last week’s downside move that brought the pair on multiyear low levels. The pair is trading into oversold territory and we are expecting a sharp move on the upside in the coming sessions. In this week’s trading session if pair break and close below 1.0754 (0%) will accelerate losses down to 1.0700. If pair manage to recover lost ground and close above (23.6%) could change the picture back to neutral. Our traders are net 100% long with positions opened between 1.1350 to 1.0800 targeting profits above 1.1350 we are expecting more aggressive long positions on the way down. Alternative if pair trades on the upside, we are expecting short sellers to appear above 1.1080 (38.2%)
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session marginally higher after markets digested the dovish BOE’s officials’ comments. BOE governor Bailey highlight once again that the central bank will be more cautions on rate hike decisions. The comments have bee taken as dovish from markets. Recent PMIs releases have shown that the UK’s growth is pointing down and this is adding pressure on BOE on its rate hike decision.
As for this week market participants will continue monitoring the outcome from the war in Ukraine after Russian’s ambassador in the US warned in writing the US of unexpected strikes in NATO territory if the US and its allies will continue to fuel the conflict by providing weapons to the Ukrainian army. This week’s speeches from BOE’s governor Bailey will provide additional guide on the future path of the Central bank.
On the economic calendar we have on Friday, Retail sales pointing lower at 2.8% and Services PMI lower at 60.3
Technically the pair is negative after last week’s attempt to break below (0%) In this week’s trading session if pair resumes upside we are expecting to test 1.3100 (23.6%) Alternatively if pair continue trading on the downside, a break below (0%) could accelerate losses down to 1.2900 Our traders are net long 100% with positions opened between 1.3412 to 1.3000 targeting profits above 1.3400 We are expecting more aggressive buyers on the way down and short sellers to appear above 1.3300
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