EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on hawkish Lagarde’s comments. The central bank kept the interest rate unchanged as it was widely expected, although during the press conference Christine Lagarde has change her dovish tone by commenting on inflation. Lagarde’s stance on inflation, the last six months was transitional inflation as from this meeting her stance change to worry inflation not anymore transitional and this was taken as positive for markets as the rate hike scenario is back on the table for 2022. On the US Dollar side, the better than expected non-farm payroll number gave back some positive traction on US Dollar and kept the pair off it peak.
As for this week market participants will focus on the inflation numbers from both sides the US and the EU. We are already in the race of hiking rates and is all depending on CPI numbers. Pair expected to trade within its technical levels unless a surprise from Ukraine and Russian conflict will take the first stage.
On the economic calendar we have on Thursday, US Consumer price index pointing higher at 5.9% On Friday, German Harmonized index of consumer prices to remain unchanged at 5.1% and US Michigan consumer sentiment pointing higher at 67.6
Technically, the picture is neutral after last week’s rally and closed below (100%). If pair continues to trade on the upside and breaks and closes above 1.1500 (100%), will change the picture to positive and accelerate gains up to 1.1700 Alternative if pair resumes downside, a close below (61.8%) will change the picture back to negative and open the road to 1.1250. Our traders took profit all their long positions opened at 1.1310 1.1261 1.1207 and 1.1123 New short positions opened at 1.1347 and 1.1481 targeting profits below 1.1300 We are expecting more aggressive short sellers above 1.1500 and new buyers buyer below 1.1350
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on BOE rate hike. The central bank has raised rates by 0.25% on Thursday’s meeting as it was widely expected. The decision was well applause by markets and took the pair sharp higher. Although in the press conference followed the rate decision, the BOE governor Bailey chill out traders with his comments saying, that the central bank hike rates not because the economy is roaring, should not assume rates will continue to march upwards and express a warning to traders not to get carried away. The warning comments brought the pair somehow down from its peak. The better than expected non-farm payroll form the US was an additional reason to push the pair even lower, giving back almost half of last week’s gains.
As for this week traders will be focus on the inflation numbers. CPIs from both countries are the main factors this year, on whether rate hikes will continue to go up. A positive Gross domestic from the UK will clear out the comments of BOE governor about the economy and boost GBP, alternative a worse than expected will reiterate comments and bring the GBP down.
In the economic calendar we have on Wednesday, BRC Like-for-Like retail sales pointing higher at 0.7% On Thursday, NIESER GDP expected lower at 1.1% and US Consumer price index higher at 5.9% On Friday, Gross domestic product expected to remain unchanged at 1.1% industrial production lower at 0.1% manufacturing production higher at 1.7% and US Michigan consumer sentiment higher at 67.6
Technically the pair is neutral after last week’s closed above 50%. In this week’s trading session if pair continues on the upside and close above 61.8%, the pair will changed in positive and we are expecting to test 1.3700, alternatively, if resumes the downside and close below (50%), will change the picture to negative and open the road down to 1.3300 Our traders took profit all their long positions opened at 1.3500 and 1.3442 and opened new short positions at 1.3580 targeting profits at 1.3430 We are expecting more aggressive short sellers above 1.3700 Alternative if pair urn down we are expecting new buyers below 1.3500
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