Week Ahead August 26th – 30th
EURUSD pair closed last week’s trading session higher on dovish FOMC minutes and on Dovish FED’s Powell comments in Jackson Hole. Powell during his speech highlighted that is time for FED to cut rates. On the other hand, ECB’s officials’ comments highlighted that is too early to discuss about reducing interest rates, forming a divergence between the two central bank’s policies, resulting in higher exchange rate for the pair.
As for this week, traders and investors will mainly focus on the outcome from Jackson Hole symposium and will continue to pre-position ahead of next month’s interest rate decisions. CPI number from Europe and PCE from the US will be the main catalyst for next week’s price actions.
On the economic calendar we have on Monday the US durable goods orders pointing lower at 4% On Thursday German CPI expected lower at 2.1%, US Gross domestic product to remain unchanged at 2.8% On Friday, German retail sales expected lower at -0.6%, European Harmonized index of consumer prices lower at 2.8% and US personal consumption expenditure unchanged at 0.2%
Technically the picture is positive after last week’s close above (100%) at 1.1192 In this week’s trading session if pair trades on the upside will test 1.11300 If trades on the downside will test 1.1150 (100%) Given the break out of 100% the pair is entering into over bough territory with increasing chances of a correction on the downside. Our traders are 100% net short positions starting from 1.0870 to 1.1135 targeting profits at 1.0800 We are expecting more aggressive short positions on the way up and new long positions at 1.0800
GBPUSD pair closed last week’s trading session higher on dovish FOMC minutes and on Dovish FED’s Powell comments in Jackson Hole. Powell during his speech highlighted that is time for FED to cut rates. In Additions to FED’s dovish stance, the better than expected Manufacturing PMI in the UK boosted GBP higher for the week.
As for this week, traders and investors will continue to price-in the outcome from Jackson Hole symposium and will continue to pre-position ahead of next month’s interest rate decisions. CPI number from the US will be the main catalyst for next week’s price actions. The lack of any high impact economic events in the UK will let the pair in the mercy of US Dollar.
On the economic calendar we have on Monday, US durable goods orders pointing lower at 4% On Thursday, US Gross domestic product to remain unchanged at 2.8% On Friday, US personal consumption expenditure to remain unchanged at 0.2%
Technically the pair’s overall picture is positive after last week’s close far above (0%) at 1.3211 As for this week, if pair trades on the upside, will test 1.3300 Alternative, if trades on the downside, will re-test 1.3046 (0%) Our traders entered more aggressive short positions starting from 1.2870 to 1.3230 targeting profits at 1.2800 we are expecting more aggressive short positions on the way up with many of the long positions hitting stop loss. The pair entered into overbought territory and an could face significant correction on the downside.
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