Week Ahead July 31 – August 4
EURUSD pair closed last week’s trading session lower, on disappointing ECB U-turn on their interest rate policy. The pair reached a multi month high level following a dovish FED release that their interest rate policy came to an end. Rally didn’t last long as the next day ECB follow the same dovish rhetoric on their interest policy and triggered a selloff in euro that pushed the pair sharp on the downside. Surprisingly economic releases from the US was another factor behind the US Dollar rally, that kept the pair on the downside.
As for this week traders and investors will mainly focus on the European inflation number and US non-farm payroll. A higher inflation release could add pressure on ECB to rethink their interest rate policy and could bring the pair on the upside. For the US Dollar the non-farm payroll will be the biggest catalyst behind any move on either direction.
On the economic calendar we have on Monday, German Manufacturing retail sales pointing negative at -6.3% European gross domestic product lower at 0.4% and European core Harmonized index of consumer prices lower at 5.4% On Tuesday US ISM Manufacturing PMI expected higher at 46.5 on Wednesday, ADP Employment expected at 195K On Thursday, US ISM services PMI expected at 53 and on Friday, US Average hourly earnings pointing lower at 0.3% and non-farm payroll expected at 184K
Technically the picture is positive after last week’s close above (38.2%) at 1.1017 In this week’s trading session if pair resumes on the upside and close above (23.6%) could accelerate gains and re-test 1.1270. If continues on the downside and break and close below 1.0917 (38.2%) could open the road for 1.0815 (50%) Our traders opened new buy positions at 1.1000 targeting profits at 1.1270 We are expecting more aggressive buyers to appear below 1.0900 targeting profits above 1.1200 and sellers at 1.1270 targeting profits at 1.1050
GBPUSD pair closed last week’s trading session unchanged after an attempt to break lower and an attempt to recover some lost ground. The dovish FED meeting helped the pair to trade higher. Although investors and traders preferred to sit on the side and wait for this week’s BOE meeting and interest rate decision. Fears that the BOE will follow FED and ECB interest rate policy kept the pair unchanged.
As for this week traders and investors will mainly focus on the BOE. The central bank expected to raise rates by 0.25%, although the press conference that will follow, is keeping investors and trades on hold as they are waiting to hear what is the next policy on interest rates. If the central bank will follow ECB and FED and stop raising rates this will trigger a sell off in GBP and could bring the pair sharp on the downside.
In the economic calendar we have on Tuesday, the US ISM Manufacturing PMI pointing higher at 46.5 On Thursday, BOE interest rate decision and press conference, and US ISM services PMI pointing lower at 53. On US Average hourly earnings pointing lower at 0.3% and non-farm payroll expected at 184K
Technically the pair is positive after last week’s close above ( 23.6% ) at 1.2853 As for this week, if pair resumes on the upside, will test 1.3140 Alternative, if continues on the downside, will test 1.2750 (23.6%) We are expecting short sellers at 1.3140 targeting profits at 1.2750 and buyers at 1.2750 targeting profits at 1.3140
For more detailed economic calendar events please visit our live economic calendar on:
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