Week Ahead March 13th – 17th

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after a failed attempt to break higher. Volatility was high during last week as many mixed signals came out from both Central banks’ officials’ comments.  Both central banks sent out hawkish signals with cautious remarks on them. The better than expected non-farm payroll released was overshadowed by disappointing hourly earning and kept the pair for a limited time on the upside. The bad news from the US regrading Silicon Valley Bank closure triggered a panic in the market as fears of another 2008 domino spread into the equity markets.

As for this week, Traders and investors, will mainly focus on the ECB meeting where is expected a rate hike of 0.5%. Failure to deliver 0.5% will bring the pair under pressure. FED is having an emergency meeting during the weekend in order to decide Silicon Valley Bank closure and avoid spreading the failure of the SVB to other banks. Consumer price index in the US is the main economic release and is poised to go down which will put US Dollar under pressure as is helping the FED to keep interests rates unchanged.

On the economic calendar, we have on Tuesday, US consumer price index pointing at 5.5% On Wednesday, US retail sales expected lower at -1.2% on Friday European Harmonized index of consumer prices to remain unchanged at 5.6% and US Michigan consumer sentiment unchanged at 67.

Technically the picture is neutral after last week’s close above 61.8%. In this week’s trading session if pair continues on the upside and breaks above 50% could change the picture to positive and re-test  1.0765  Alternatively, if pair resumes downside we are expecting to re-test 1.0500 Our traders are net long with buyers standing between 1.0870 and 1.0600 targeting profits around 1.1000. We are expecting more aggressive buyers on the way down and short sellers to appear above 1.0800.

GBP/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after an initial downside move during the beginning of the week. The downside move was due to dovish BOE comments on rate hikes, highlighting that the bank will be softer on the future policy. The negative US hourly hours have overshadowed non-farm payrolls and this triggered the rally by the end of the week. In addition, mixed signals from FED’s Powell added more pressure on US Dollar that helped the pair closed on monthly higher levels.

As for this week traders and investors will focus on the weekend FED meeting result, on how they will handle Silicon Valley Bank closure in order to prevent another 2008 domino failure. The decision on SVB bank has already push equity markets lower last week. Failure to deliver a sustainable plan during weekend will push investors into save heaven US Dollar and will weigh negative for the pair.

On the economic calendar we have on Tuesday, UK Claimant count pointing to -12.4K and ILO Unemployment at 3.8% US Consumer price index expected lower at 5.5%  On Wednesday, US retail sales expected lower at -1.2% On Friday, US Michigan consumer sentiment to remain unchanged at 67

Technically the pair is neutral after last week’s close below 38.2% level. As for this week if pair continues on the upside could retest 23.6%. Alternative if resumes the downside, and breaks below 50% will retest 61.8% Buyers are standing firm between 1.2060 and 1.1800 targeting profits above 1.2200 We are expecting more aggressive buyers on the way down. New short sellers could appear at 1.2200 targeting profits at 1.2000

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

http://tentrade.com/economic-calendar/

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