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Week ahead April 4th – 8th

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session higher after an attempt to break even above last week’s peak. The upside move in the pair came after the Euro zone inflation jumped to 7.5%, Although the pair failed to maintain its bullish bias and retreated lower as the ADP employment and unemployment rate came out better than expected and boost expectations for a 0.5% rate hike in May. The war in Ukraine is keeping investors on the US dol-lar side adding downside pressure on pair as the impact on Europe starts to be felt in the pockets of European citizens.

As for this week market participants will on FOMC minutes due to be released on Wednesday. FED’s minutes will give a clear guide on what the FED is up to on their May meeting. A confirmation of a 0.5% rate hike could accelerate losses on the pair. The outcome from the ongoing ceasefire negotiations between Ukraine and Russia need to be followed as well, as they can have direct impact on Euro. In others, traders will fol-low as usual the economic calendar.

On the economic calendar we have on Tuesday, ISM services PMI pointing higher at 57.7 On Thursday, European retail sales expected lower at 4.2%

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 1.1154 (50%). If breaks and closes above 1.1154 (50%), the sentiment will change to neutral and will retest 1.1227 (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 net long by 60% starting from 1.1350, till 1.1000 targeting profits at 1.1500. Short positions are 40% open at 1.1130 and 1.1190 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 lower as investors and traders continue to flee into safe haven US Dollar. The better than expected ADP employment and unemployment rate in the US boosted demand for US Dollar as the 0.5% rate hike in May is becoming more likely. On the GBP side downside pressure is felt in the UK’s consumers as they have to pay the huge increase in prices due to the high oil prices caused by the war and the sanctions on Russia.

As for this week traders will focus on the FOMC minutes due to be release on Wednesday. The Minutes will guide investors and traders on what is next in the FED’s rate hike decision in May. A confirmation on a rate hike by 0.5% could accelerate losses on the pair. The speech form BOE’s governor Bailey on Monday need to be closely monitor. The high inflation number in the UK could add pressure on BOE to hike rates faster than expected.

In the economic calendar we have only one event on Tuesday, US ISM Services PMI pointing higher at 57.7

Technically the pair is negative after last week’s close below (23.6%). In this week’s trading session if pair resumes upside, we are expecting to test 1.3248 (38.2%). Alternatively, if continues on the downside we are expecting to retest 1.3000 (0%) Our traders are net long 100% with 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 1.3320 targeting profits at 1.3100

 

 

 

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

Economic Calendar

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