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Week ahead March 21st – 25th

EUR/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session higher as Fed’s hike rates by only 0.25% as it was widely expected. The rate hike was well priced-in on the pair and that triggered some correction on the upside. On the other hand, the war in Ukraine has a higher impact on prices, rather than the economic events. Comments from both sides, for the beginning of negotiations and possible cease fire agreement is driving the pair into sharp moves on either directions.

As for this week market participants will continue focusing on the war in Ukraine and the outcome from the meeting between Russia and Ukraine, hosted by Turkish. Both sides are willing to sit on the table of negotiations, although, terms and demands differ and this could extend the war farther or even escalate.

On the economic calendar we have on Thursday, German Markit manufacturing pointing lower at 55, Markit PMI composite lower at 54, European Markit PMI composite lower at 54, US durable goods lower at -0.5% and US Markit services PMI lower at 56. On Friday, German IFO business climate expected lower at 94 and US Michigan consumer sentiment to remain unchanged at 59.7

Technically, the picture is negative after last week’s closed below (38.2%). In this week’s trading session If pair retreat on the upside we are expecting as first level to be tested the (50%) 1.1150 if breaks and closes above 1.1150 (50%), the sentiment will change to neutral and will retest 1.1230 (61.8%) Alternative if pair continues trading on the downside, a close below (23.6%) will keep the picture negative and accelerate losses down to 1.0800. Our traders are keeping open their long positions starting from 1.1350, till 1.1100 targeting profits at 1.1500. All long positions between 1.1100 – 1.0900 have taken profits and hedged with short positions at 1.1130 targeting profits at 1.0900 If pair trades on the upside we are expecting more short sellers above 1.1150 alternative if pair trades on the downside we are expecting more aggressive buyers below 1.1000

 

 

GBP/USD FUNDAMENTALS AND TECHNICAL

 

Pair closed last week’s trading session higher after BOE hike rates by 0.25%. Pair traded last week on both directions while FED’s rate hike of 0.25% was already priced-in and could not add downside pressure on the pair. BOE’s rate hike helped the pair recover lost ground but not as much as it was expected. The dovish comments on Ukraine’s war and the negative impact on the UK economy, limited the pair’s advance.

As for this week traders will focus on the Russian- Ukraine negotiations outcome. Both sides are willing to meet and discuss a possible cease fire. Although the gap between both side’s demands is still huge and a possible failure or even escalation is on the table.

In the economic calendar we have on Wednesday, Consumer price index pointing higher at 5.9% and retail price index higher at 8.1% On Thursday, Markit services PMI expected lower at 59, US durable goods lower at -0.5% and US Markit services PMI lower at 56.  On Friday, Gfk consumer confidence expected lower at -30 UK retail sales lower at 8% and US Michigan consumer sentiment to remain unchanged at 59.7

Technically the pair is negative after last week’s close just below 23.6%. In this week’s trading session if pair resumes upside, we are expecting to test 1.3262, alternatively, if continues on the downside and close below (0%), will open the road down to 1.2900 Our traders keeping open their long positions at 1.3412, 1.3319, 1.3172 and 1.3034 targeting profits at 1.3600 We are expecting more aggressive buyers below 1.3000. Alternative if pair resumes upside, we are expecting short sellers to appear above 1.3400 targeting profits at 1.3100

 

 

 

 

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

Ekonomik Takvim

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