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Week ahead February 21st – 25th

EUR/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session marginally lower on US Dollar strength. The US Dollar has seen some demand as safe-haven asset last week due to geopolitical turmoil between Russia and Ukraine. Last week’s diplomatic meetings between Europe and Russia failed to provide any security or de-escalation of the geopolitical turmoil. Even though on the economic view, the pair is founding some support around 1.1300 on ECB’s hawkish stance, the pair remains under pressure on the geopolitical turmoil.

As for this week market participants will focus on the economic calendar with a lot of high impact events, although, we believe that the economic calendar will be overshadowed by the Russian-Ukraine geopolitical tensions. Provocations already started during weekend and situation can go bad at any time. The meeting between Lavrof and Blinken will be the most important catalyst behind the pair’s exchange rate.

On the economic calendar we have on Monday, European Markit PMI composite pointing higher at 52.7 German Markit Manufacturing PMI lower at 59.4  On Tuesday, German IFO Business climate higher at 96.5 US Markit manufacturing PMI higher at 56 and US Markit services PMI higher at 53 On Thursday, US Gross domestic product expected higher at 7% On Friday, German Gross domestic product to remain unchanged at 1.4% US Durable goods order higher at 0.6% and Michigan Consumer sentiment unchanged at 61.7

Technically, the picture is neutral after last week’s close, just below (61.8%). If pair trades on the upside and breaks and closes above 1.1347 (61.8%), will retest 1.1481 (100%) Alternative if pair trades on the downside, a close below (50%) will change the picture back to negative and open the road to 1.1250. Our traders are short at 1.1347 and 1.1481 targeting profits below 1.1300 Buyers are standing at 1.1350 targeting profits at 1.1500. we are expecting more aggressive buyers below 1.1300

 

 

 

GBP/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session unchanged as investors and traders are sitting on the side and awaiting results from diplomatic talks between Russia and EU on Russian-Ukraine tensions. With the geopolitical turmoil on the one side boosting US Dollar demand and the better than expected economic view in the UK on the other side, the pair trades stable on multi month high levels, at least for now.

As for this week traders will focus on the meeting between Blinken and Lavrof, trying to de-escalate Russian -Ukraine geopolitical turmoil. With US rejecting Russian’s demands and the provocation on Ukraine soil during the weekend, the situation is becoming worse than expected. The two possible scenarios for the coming weeks will be, the failed diplomatic meetings that will increase chances of  war, and  will drive the pair sharp on the downside or, the continuation of diplomatic talks, that will keep the pair unchanged for another week.

In the economic calendar we have on Monday, UK Markit Services PMI pointing higher at 55.2 On Tuesday, US Markit manufacturing PMI higher at 56 and US markit services PMI higher at 53. On Wednesday, BOE monetary policy report will be released. On Thursday, US Gross domestic product expected higher at 7%. On Friday UK Gfk consumer confidence expected better than last one at -18. US Durable goods order higher at 0.6% and Michigan Consumer sentiment unchanged at 61.7

 

Technically the pair is positive after last week’s closed above 61.8%. In this week’s trading session if pair continues on the upside we are expecting to test 1.3720, alternatively, if resumes the downside and close below (61.8%), will change the picture to neutral and open the road down to 1.3500 Our traders are short at 1.3580 targeting profits at 1.3430 We are expecting more aggressive short sellers above 1.3700 Alternative if pair turn down we are expecting new buyers below 1.3500

 

 

 

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

Ekonomik Takvim

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