Week Ahead April 3rd – 7th
EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on divergence between the two central banks. ECB’s officials on the one hand are keeping their hawkish tone, highlighting that high inflation is here to stay for long. On the other hand, FED’s officials are keeping a dovish tone as the inflation in the US stabilizes. The rally in the pair capped by the end of the week and pair retreated from its peak as many traders and investors took profit out of the market ahead of next week’s US non-farm payrolls.
As for this week, Traders and investors, will mainly focus on the non-farm payroll. A better than expected number will boost demand for US Dollar and trigger a selloff in the pair. A worst than expected could help the pair continue trading on the upside. There are not any scheduled speeches form either central banks during and week, so we are expecting the pair to be driven by the economic calendar releases.
On the economic calendar, we have on Monday the US ISM Manufacturing PMI pointing lower at 47.5 On Wednesday, US ADP Employment expected to add 200K new jobs and US ISM services PMI expected lower at 54.5 On Friday, Non-farm payrolls expected to show an additional 240K new jobs.
Technically the picture is positive after last week’s close above 38.2%. In this week’s trading session if pair continues on the upside and breaks above 23.6% could accelerate gains and re-test 1.0945 peak of last week’s Alternatively, if pair resumes downside we are expecting to re-test 1.0700 Our traders have entered into short positions as of 1.0900 targeting profits at 1.0700 We are expecting more aggressive short sellers on the way up and new buyers to appear at 1.0700 (50%)
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on better than expected gross domestic product from the UK. The divergence between the two central banks on their future rate decision is another factor that favors the pair and continues trade on the upside. After touching a multi month higher level on Friday the pair retreated lower mainly on some profit taking ahead of next week’s US non-farm payrolls.
As for this week traders and investors will focus on US non-farm payrolls. The better than expected number will boost demand for US Dollar and pair will continue on the downside. A worse than expected number will help the pair continue on the upside. The lack of any central banks’ officials will let the pair in the mercy of the economic releases from the mainly from the US.
On the economic calendar we have on Monday the UK Manufacturing PMI to remain unchanged at 49.3 and US Manufacturing PMI lower at 47.5 On Wednesday, US ADP employment expected to add 200K new jobs US ISM services PMI expected lower at 54.5 On Friday US Non-farm payrolls expected to add 240K new jobs
Technically the pair is positive after last week’s close above 23.6% level. As for this week if pair continues on the upside and break above last week’s peak of 1.2400 could open the road for 1.2500 Alternative if resumes the downside, and breaks below 23.6% will retest 38.2% Short sellers are standing between 1.2200 – 1.2400 targeting profits at 1.2000 we are expecting more aggressive short sellers on the way up and new buyers to appear around 1.2064 targeting profits above 1.2200
For more detailed economic calendar events please visit our live economic calendar on:
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