Week Ahead May 1st – 5th
EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session marginally higher after another week of choppy trading. The mixed economic releases from both side the EU and the US are keeping traders on hold. In the US the positive durable goods orders overshadowed by the negative gross domestic product. In the EU the lower inflation rate was overshadowed by ECB’s officials’ comments that the central bank will continue increasing interest rates even though the inflation in Euro-zone is registering softer levels in the last 2 months.
As for this week, Traders and investors, will mainly focus on the FOMC minutes due to be release on Wednesday. And the ECB interest rate decision and press conference due to be released on Thursday. Both central banks are expected to raise rates by 0.25%. This rate hike is already priced-in in the US Dollar pairs and will not have any significant impact on the pair. Although the press conference that will follow will guide investors and traders on what’s next. A dovish comment form FED’s Powell could trigger aggressive sell off in the US Dollar and push the pair higher. ECB expectation of 0.25% could spook investors as some officials already signaled 0.5% during their last week’s comments. Heavy week ahead on the economic calendar with many high impact releases. All eyes will be on the inflation numbers and the US non-farm payroll.
On the economic calendar, we have on Monday the US ISM Manufacturing PMI pointing higher at 50.4 on Tuesday, German retail sales again lower at -6.1%, European Harmonized index of consumer prices to remain unchanged at 6.9%. On Wednesday US ADP employment expected to show 150K new jobs ISM Services PMI expected higher at 53.1On Friday, European retail sales expected at -1.5% and US non-farm payroll number at 181K new jobs.
Technically the picture is positive after last week’s close above 23.6%. In this week’s trading session if pair continues on the upside will re-test 1.1070 peak of April. If breaks and close above 1.1070 will open the road for 1.1200 Alternatively, if pair resumes downside we are expecting to re-test 1.0800 Our traders maintain open their short positions as of 1.0900 to 1.1030 targeting profits at 1.0700 We are expecting more aggressive short sellers on the way up and new buyers to appear at 1.0800 (38.2%)
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on mixed economic releases from the US and the lack of any economic releases from the UK. Pair got the chance to break higher on US dollar’s weakness, as traders and investors, are pricing-in already the 0.25% rate hike of this week and they are positioning for a dovish FOMC meeting.
As for this week, traders and investors will focus on the FOMC minutes due to be released on Wednesday and the US non-farm payroll due to be released on Friday. The light economic calendar in the UK will be overshadowed by the heavy economic calendar in the US. Once again, the pair will be in the mercy of the US Dollar. FED is expected to raise rates by 0.25%, a rate hike that is well priced-in the pair. Investors will closely follow the press release, as, a dovish speech from FED’s Powell will accelerate gains in the pair.
On the economic calendar we have on Monday the US ISM Manufacturing PMI pointing higher at 50.4 on Tuesday, UK Manufacturing PMI to remain unchanged at 46.6 On Wednesday US ADP employment expected to show 150K new jobs ISM Services PMI expected higher at 53.1 On Thursday, UK composite PMI steady at 53.9 On Friday, US non-farm payroll number expected to show 181K new jobs.
Technically the pair is positive after last week’s break and close on a higher level. As for this week if pair continues on the upside could test another 100pips higher at 1.2650 Alternative if resumes the downside, and breaks below 23.6% will retest 38.2% Short sellers are standing between 1.2200 – 1.2520 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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