Week Ahead December 16th – 20th
EURUSD pair closed last week’s trading session lower on ECB interest rate cut of 0.25%. The central bank has completed the 2024 interest rate policy as it was widely expected and signal that the 2025 rate policy will not be restrictive as the inflation is on track of ECB’s target of 2%. Although during the press conference ECB’s president Lagarde high lighted that growth in the EU is at downside risk, adding downside pressure on the pair. In the US the CPI came online with expectations. Given the 3.3% release, higher than FED’s target, kept the US Dollar higher as such high inflation will weight on FED’s interest rate decision.
As for this week, traders and investors will mainly focus on the FED’s rate decision due to be released on Wednesday. The central bank expected to reduce interest rates by 0.25%. As this is widely expected, we do not expect any significant US Dollar price action. Although the press conference and minutes will generate significant price action as the future interest rate projections will be released.
On the economic calendar we have on Monday, the German manufacturing PMI pointing higher at 43.8 European manufacturing PMI lower at 45 and US manufacturing PMI at 49.7 On Tuesday, US retail sales expected higher at 0.5% On Wednesday, European harmonized index of consumer prices expected lower at 2.7% on Thursday, US gross domestic product to remain unchanged at 2.8% On Friday, US personal consumption expenditure pointing lower at 0.2%
Technically the picture is negative after last week’s close below (23.6%) at 1.0500 In this week’s trading session if pair trades on the upside and breaks out of 1.0576 (38.2%) will change the picture to neutral and could test 1.0635 (50%) If trades on the downside will test 1.0400. Our traders are net long with positions between 1.0767 – 1.0500 targeting profits above 1.1000 We are expecting new short positions above 1.0913 and more aggressive long positions on the way down.
GBPUSD pair closed last week’s trading session lower as investors and traders are prepositioning ahead on this week’s FED’s and BOE’s interest rate decisions. The pair suffered some losses last week after an attempt to break higher, as US CPI came out at 3.3% adding pressure on FED to rethink its future interest rates decisions.
As for this week, traders and investors will mainly focus on FED’s and BOE’s rate decision due to be released on Wednesday and Thursday. FED is expected to reduce interest rates by 0.25%. Although BOE will maintain interest rates unchanged. As FED’s rate decision is widely expected, we do not expect any significant US Dollar price action. Although the press conference and minutes will generate significant price action as the future interest rate projections will be released.
On the economic calendar we have on Monday, the UK manufacturing PMI pointing higher at 43.1 and US manufacturing PMI at 49.7 On Tuesday, UK ILO unemployment rate to remain unchanged at 4.3% and US retail sales expected higher at 0.5% On Wednesday, UK CPI expected higher at 3.6% On Thursday, US gross domestic product to remain unchanged at 2.8% On Friday, UK retail sales pointing higher at 0.4% and US personal consumption expenditure pointing lower at 0.2%
Technically the pair’s overall picture is negative even after last week’s close on 23.6% at 1.2620 As for this week, if pair trades on the upside, will test 1.2812 (50%) Alternative, if trades on the downside, will test 1.2490 (0%). Our traders are net long between 1.3038 and 1.2615 targeting profits above 1.3038 We are expecting new short positions above 1.2973 and more aggressive long positions on the way down.
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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