EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on disappointing economic releases from the US. In addition, the speech from FED’s Powell added downside pressure on US Dollar on his comments about inflation, saying that recent inflation acceleration is not as bad as it was initially thought and there is no reason to worry. Although the rally in the pair was capped as ECB’s Lagarde maintained her dovish tone with a wait to see comment.
As for this week market participants will focus on the inflation reading in the EU. With a light economic calendar, this week’s trading session will be most probably on a technical level rather than fundamental. On Friday, ECB’s president Christine Lagarde will deliver her speech. As it is widely expected the speech will be dovish as usual. It is very unlikely to surprise with a hawkish U-turn.
On the economic calendar we have on Tuesday, German ZEW survey economic sentiment pointing higher at 32.7 On Wednesday, German Harmonized index of consumer prices to remain unchanged at 5.7% On Thursday, European consumer price index to remain unchanged at 2.6% and on Friday European consumer confidence expected lower at -9
Technically, the picture turned neutral as pair broke and closed above 38.2%. If pair continues to trade on the upside and breaks and closes above 1.1500 (61.8%), will change the picture to positive and accelerate gains with the road open for 1.1700 Alternative if pair resumes downside, a close below (38.2%) will change the picture back to negative and open the road to 1.1250. Our traders started to sell the pair at 1.1445 targeting profits at 1.1312 we are expecting more aggressive short positions above 1.1520 If pair trades on the downside bull will appear at 1.1312 targeting profits at 1.1500
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on disappointing economic releases from the US. On the GBP side the releases were better than expected and boosted the pair to level seen back in October 2021. Despite the political turmoil in the UK with pressure on PM Boris Johnson to resign the pair managed to close positive after retreated from its peak.
As for this week traders will be focus on the speech from BOE’s governor Bailey. A hawkish tone is expected to boost GBP. The pressure on PM Boris Johnson to resign is something that must keep traders alert. A possible resignation could have negative impact on GBP that will result in sharp downside move.
In the economic calendar we have on Monday, NIESER GDP pointing higher at 1%. On Tuesday, ILO Unemployment rate to remain the same at 4.2% with average earnings down to 3.8%. On Wednesday, consumer price index expected higher at 5.2% and retail price index higher at 7.2% On Friday, Gfk consumer confidence to remain unchanged at -15 and retail sales lower at 4.2%
Technically the pair is positive after last week’s higher closed above 61.8%. In this week’s trading session if pair continues on the upside, we are expecting to test 1.3800, alternatively, if resumes downside and close below (61.8%), will change the picture back to neutral and open the road down to 1.3500 Our traders starter to sell the pair at 1.3584 and 1.3695 targeting profits at 1.3300 we are expecting more aggressive sellers around 1.3800 Alternative if pair retreads on the downside we are expecting bulls to appear at 1.3500 targeting profits at 1.3700
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