Week ahead October 17th – 21st

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after hovering around the same technical levels on the upside and downside, FED has maintained it policy unchanged as it was widely expected. Geopolitical and economic situation in the EU continues to be the same as Russia-EU relations continues to deteriorating and increasing the fears or escalation. In the same time as we are getting close to winter the gas and in general the energy crisis is deepening and testing EU consumers with higher prices in basic goods.

As for this week market participants will mainly focus on the geopolitical tensions and on the light economic calendar with more attention to be given on the inflation numbers. Few speeches from FED’s officials will be followed during the week, although we do not expect any extraordinary move in the pair given that the week will flow as easy as last week.

On the economic calendar, we have on Tuesday, European ZEW Economic sentiment pointing lower at -60.6 On Wednesday, European HICP expected to remain unchanged at 1.2% On Thursday, German producer prices index expected lower at 1.3% On Friday, European consumer confidence lower at -30.3

Technically the picture is negative after last week’s close below 23.6% In this week’s trading session if pair resumes upside and close above (23.6%) could change the picture back to neutral and re-test next level of 1.0030 (38.2%). Alternatively, if pair continues downside we are expecting to retest last low of 0.9550 (0%) We are expecting new buyers at 0.9550 targeting profits at 1.0000 Short sellers are still open at 1.0030 targeting profits at 0.9550

GBP/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session higher compare to last week’s trading session, although weekly session closed lower on  PM’s Liz Truss U-turn on taxation and mini-budget. The inter-governmental turmoil begun after Thursday’s PM’s decision to dismiss chancellor Kwasi. Both events have weighted negative on Pound and resulted to downside move by the end of the week.

As for this week market participants will focus on the UK’s new chancellor Jeremy Hunt and how he will fix the mess around government’s mini-budget and tax cancellation. The budget proposed is leaving government with a hole of 25 billion pounds and chancellor need to explain what is the government’s plan to fund this hole.

On the economic calendar we have on Wednesday, Consumer price index pointing higher at 10% retail price index higher at 12.4%. On Friday, Gfk consumer confidence expected lower at -52 and retails sales marginally better but still negative at -5%

Technically the pair is positive as the pair closed above 50% level at 1.1174. In this week’s trading session if pair manages to resume recovery and close above 1.1273 (61.8%)  will keep the overall picture positive and could open the road to full recovery up to 1.1900 Alternatively a break below 50% could accelerate losses down to 1.0900 We are expecting new buyers at 1.0700 and short sellers at 1.1800

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

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

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