Week Ahead August 22nd – 26th
EUR/USD Fundamental and Technical Analysis
EURUSD closed last week’s trading session lower on hawkish comments from FED’s Bullard. The Central bank’s member said on his speech last Thursday that he expects 0.75% rate hike in September meeting. A day earlier the FOMC minutes were taken dovish from traders as the central bank avoid to comment on rate hike future path and only focus on the future inflation releases. from the Euro side things are not too good as economic indicators are brewing more recession signals.
For this week trades will focus on the economic releases. the Jacksons Hole symposium will be the main catalyst behind any sharp move on either side. Many central bank’s officials are due to speech during the symposium with the main one in focus FED’s chair Powell.
On the economic calendar we have on Tuesday German composite PMI pointing lower at 47.4, German manufacturing PMI lower at 48.1 and European composite PMI 48.8 On Wednesday, US durable goods orders expected lower at 0.6% On Thursday, US Gross domestic product expected at -0.8% On Friday Michigan consumer sentiment expected higher at 55.2
Technical the pair is negative as far as trading within it downtrend channel formation on the 4H chart. In this week’s trading session if pair continues on the downside it will test 0.9900 with an extreme scenario of breaking down to 0.9800. If pair manage to recover and close above (23.6%) could change the picture back to neutral. Our traders are net 100% long with positions opened between 1.1350 to 1.0000 targeting profits above 1.1350 we are expecting more aggressive long positions on the way down. Alternative if pair continues trading on the upside, we are expecting short sellers to appear around 1.0550 (38.2%)
GBPUSD Fundamental and Technical Analysis
GPBUSD closed last week’s trading session lower on hawkish comments from FED’s Bullard. The central bank member said that he expects 0.75% rate hike in September meeting and this spark a sharp downside move on the pair despite central bank’s Wednesday’s minutes were dovish. In the UK the hyper inflation continues its way on the upside and adding pressure on BOE to reconsider rate hikes policy.
As for this week the heavy economic calendar in the US will be the main driver for either direction up or down for this pair. The Jacksons Hole symposium and the central bank’s official’s speeches during the symposium will need to pay extra attention, especially FED’s chair Powell speech.
On the economic calendar we have On Tuesday, UK service PMI pointing lower at 52. On Wednesday, US durable goods orders expected lower at 0.6% On Thursday, US Gross domestic product expected at -0.8% On Friday Michigan consumer sentiment expected higher at 55.2
Technically the pair is negative after last week’s close below 23.6% In this week’s trading session if pair manage to recover on the upside and breaks above 23.6% might change the picture back to neutral. Alternatively if pair resumes the downside, a break below (0%) could accelerate losses down to 1.1700 Our traders are net long 100% with positions opened between 1.3412 to 1.1800 targeting profits above 1.3400 We are expecting new buyers on the way down and short sellers to appear around 1.2500(38.2%)
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