EUR/USD FUNDAMENTALS AND TECHNICAL
EURUSD closed last week’s trading session lower on a less hawkish ECB meeting, that disappointed traders and pushed them away from Euro long positions. Investors were placing their order for a 0.5% rate hike in July. Although the Central bank unexpectedly signaled a 0.25% in July and another 0.25% in September. The new were taken dovish from traders and drove the pair sharp on the downside. On the US Dollar side the better than expected CPI and Michigan consumer confidence boosted the US Dollar farther causing another downside move on the pair.
As for this week traders will be focus on the FOMC minutes and rate hike decision. The FED is expected to hike rate by 0.5% on their Wednesday meeting. Generally speaking, this is already priced in at the current exchange rate although the recent outperform economic releases in the US and the rate hike of 0.5% could boost US Dollar and bring the pair down to new lows. A rate hike of 0.25% could be seen dovish from traders and bring the pair sharp on the upside.
On the economic calendar, we have on Tuesday, German Harmonized index of consumer prices to remain unchanged at 8.7%, German ZEW survey of economic sentiment pointing better at -27 and US producer price index lower at 8.6%. On Wednesday, US retail sales expected lower at 0.2% and later the FOMC minutes will be release. On Thursday,
Technically the picture is negative after last week’s sharp downside move and closing below (23.6%) In this week’s trading session if pair continues on the downside it will test 1.0350 with an extreme scenario of breaking below 1.0350 down to 1.0250. If pair manage to recover and close above (23.6%) could change the picture back to neutral and retest 1.0800. Our traders are net 100% long with positions opened between 1.1350 to 1.046700 targeting profits above 1.1350 we are expecting more aggressive long positions on the way down. Alternative if pair continues trading on the upside, we are expecting short sellers to appear around 1.1090 (61.8%)
GBP/USD FUNDAMENTALS AND TECHNICAL
GPBUSD pair closed last week’s trading session lower on US Dollar’s renew strength. The better than expected CPI and consumer sentiment in the US with the lack of any economic releases in the UK brought the pair sharp on the downside.
As for this week traders will focus on the Wednesday’s FOMC and Thursday’s BOE meeting and rate hike decision. The FED is expected to hike rates by 0.5% if this will be the case the pair may face some more front winds. If the central bank will hike by 0.25% this will be seen as dovish from traders and help the pair recover lost ground. The bank of England expected to keep interest rates unchanged, although if MPs will vote for a rate hike or surprise with a rate hike, pair could turn sharp on the upside.
In the economic calendar we have on Monday, UK Gross domestic product pointing higher at 0.2% manufacturing production lower at 1.8% On Tuesday ILO unemployment rate expected higher at 3.8%. and US producer price index lower at 8.6%. On Wednesday, US retail sales expected lower at 0.2% and FOMC minutes will be released with a rate hike of 0.5% on the table. On Thursday the BOE will release their minutes and rate decision.
Technically the pair is neutral after last week’s close below 38.2%. In this week’s trading session if pair continues recovering on the upside and breaks above 38.2% we are expecting to test 1.2900 (50%) Alternatively if pair resumes the downside, a break below (23.6%) could accelerate losses down to 1.2200 Our traders are net long 100% with positions opened between 1.3412 to 1.2700 targeting profits above 1.3400 We are expecting new buyers on the way down and short sellers to appear around 1.3170
For more detailed economic calendar events please visit our live economic calendar on:
*The material does not contain an offer of, or solicitation for, a transaction in any financial instruments. TEN.TRADE accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all your invested capital, so please make sure that you fully understand the risks involved.