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Week ahead January 3rd – 7th

EUR/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session higher on the lack of any high impact events from the US. A comment from ECBs Klass Nnot saying that the central bank will tapper its bond buying program earlier than expected and it is time for the central bank to normalize its monetary policy, was taken as hawkish from Euro traders and pushed the pair higher.

As for this week we are entering into 2022 sessions with the holiday’s season ending and the return of liquidity and volatility back to normal. We are expecting huge volatility and new price set up for the pair this week as the first FOMC minutes of 2022 will be released and definitely will guide investors on the FED’s path during 2022. As it is widely expected the FED will hike rates 3 times in 2022. At this meeting no rate hike is expected, although, trader should be alert on the comments and points of the minutes. Non-farm payrolls are due to be release on Friday showing an increase in employment. From the European side Inflation is the main actor behind any price move.

On the economic calendar we have on Monday, US Markit manufacturing PMI pointing lower at 57.7 on Tuesday, German retail sales lower at -0.5% and US ISM Manufacturing lower at 60.2 On Wednesday, European Markit PMI to remain unchanged at 53.3, US ADP employment expected lower at 438K and FOMC will release the December minutes. On Thursday, German Harmonized index of consumer prices expected lower at 5.6% and US ISM services PMI lower at 67 On Friday, European consumer price index expected lower at 2.3% European retail sales higher at 5.6% and US nonfarm payrolls expected to show an increase of 400K new jobs

Technically, the picture is negative as pair continues to trade below 38.2%. If pair continues to trade on the downside this week and breaks and closes below 1.1300 (23.6%), will accelerate losses down to 1.1200 Alternative if pair trades on the upside, a close above (38.2%) will change the picture back to neutral and open the road to 1.1450. Our traders took profit on all their long position opened at 1.1435 1.1300 and 1.1232 and they are on a wait and see mode. We are expending short sellers to appear above 1.1435 targeting profits at 1.1200 and bulls to appear below 1.1300 targeting profit at 1.1450

 

 

GBP/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session firm higher on the lack of any high impact economic events and on the UK’s decision, not to impose any lock-downs. Although this remain to be cleared this week, as the surge in new cases is adding pressure on NHS.

As for this week traders will be focus on the FOMC minutes due to be released on Wednesday, and nonfarm payrolls on Friday. From the UK side traders will weighing on UK’s rapidly increase of infections and on any surprise decisions on adding any new restrictions.

In the economic calendar we have on Monday, US Markit manufacturing PMI pointing lower at 57.7 on Tuesday, UK Markit manufacturing to remain unchanged at 57.6 and US ISM Manufacturing lower at 60.2 On Wednesday, US ADP employment expected lower at 438K and FOMC will release the December minutes. On Thursday, UK Markit service PMI to be higher at 53.4 and US ISM services PMI lower at 67 On Friday, US non-farm payrolls expected to show an increase of 400K new jobs

Technically the pair is neutral after last week’s break higher and closed above 50%. In this week’s trading session if pair continues on the upside and breaks and close above  (61.8%)  will open the road to 1.3700, alternatively, if resumes downside and close below (50%), will change the picture back to negative and open the road down to 1.3300 Our traders closed all their long positions opened at 1.3546 and 1.3412 maintaining a neutral stance for now. We are expecting short sellers to appear above 1.3600 targeting profits at 1.3300 and bulls to appear below 1.3400 targeting profits at 1.3600

 

 

 

For more detailed economic calendar events please visit our live economic calendar on: 

Calendário Econômico

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