EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher, on the lack of any high impact economic release from the US. Both central bank’s officials’ speeches were online with expectations with not any surprised comments. ECB continues to whispers a rate hike possibility as early as in July and the FED to treat water whether will hike rates on the next meeting as the current situation in equity indices and the fast rate hike of the last few months has triggered alarm of a possible recession in the US. World food organization warns that the world may face food shortages and higher prices something that started to worry central banks around the world and rethink about their fast rate hike in a fight to compact inflation.
As for this week market participants will mainly focus on the economic release form both sides and mainly the FOMC minutes due to be released on Wednesday. No rate hike expected at this meeting, pending to hear, is the future path of the FED on any possible rate hikes and how much those will be.
On The economic calendar, we have on Monday, German IFO Business climate pointing lower at 91.4 On Tuesday, German composite PMI expected lower at 54 German manufacturing PMI lower at 54 European composite PMI lower at 55.3 and US services PMI lower at 57.3 On Wednesday, US durable goods expected lower at 0.6% On Thursday, Gross domestic product expected at -1.3% On Friday the US core personal consumption expenditures expected higher at 0.4%
Technically the picture is negative after last week’s positive trading session that pushed the higher but closed just below 23.6% The pair retreated higher as we have previously said and expected due to its trading in oversold territory. In this week’s trading session if pair breaks and closes below 1.0350 (0%) will accelerate losses down to 1.0250. If pair manage to maintain recovery 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 1.0500 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
Pair closed last week’s trading session higher on the lack of any strong US economic releases and on the better than expected economic release in the UK. The meeting between the UK and Ireland on the Northern Ireland protocol did not have any positive outcome but at least the UK and the EU decided not to get into any war trade especially now that things don’t look so bright due to the war in Ukraine. Another factor behind the pairs sharp reversal on the upside was the FED’s speech than started to signal slower rate hikes as some economist worried about the FED’s tactic on compacting inflation and signal that the US may be heading into a recession.
As for this week market participants will be focus on the FOMC minutes due to be released on Wednesday, and on the economic release mainly from the US. No rate hike expected at this meeting but the minutes will guide investors on what’s next for the FED. The speech from BOE’s governor Bailey will be on the main stage for GBP fans.
On the economic calendar we have on Tuesday, the UK service PMI pointing lower at 57.3 and the US services PMI lower at 57.3 On Wednesday, US durable goods expected lower at 0.6% On Thursday, US Gross domestic product expected at -1.3% On Friday the US core personal consumption expenditures expected higher at 0.4%
Technically the pair is negative after last week’s sharp upside move and close below 23.6% . Pair managed to recover some lost ground before the close of last week’s trading session as it was expected due to its trading in oversold territory. In this week’s trading session if pair continues recovering on the upside and breaks above 23.6% we are expecting to test 1.2700 (38.2%) Alternatively if pair resumes the downside a break below (0%) could accelerate losses down to 1.2100 Our traders are net long 100% with positions opened between 1.3412 to 1.2200 targeting profits above 1.3400 We are expecting more aggressive buyers on the way down and short sellers to appear around 1.3170
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