Week Ahead October 23 – 27
EURUSD pair closed last week’s trading session higher on softer US Dollar mainly due to the negotiation between Europe, USA and Israel to de-escalate and pressure from international leaders to avoid the spread of the war in other Arabic countries. FED’s Jerome Powell gave a dovish speech last week, highlighting that he prefers that the central bank will keep rate unchanged as inflation stabilizes. The comments were dovish and markets pricing in a no change of interest rate on the next meeting.
As for this week traders and investors will focus on ECB interest rate decision. The central bank expected to maintain interest rates unchanged at 4.5%. ECB’s president Lagarde is due to deliver her press conference after the rate decision and this will guide investors on what’s next. The heavy economic calendar from both the EU and US will generate some volatility during the week giving the opportunities to enter new positions.
On the economic calendar we have on Tuesday, European Composite PMI pointing higher at 47.4 Manufacturing PMI higher at 43.7 US manufacturing PMI lower at 49.5 and US Services PMI lower at 49.9 On Thursday, US Gross domestic product expected higher at 4.1% On Friday, US core personal consumption expected lower at 3.7% and Michigan consumer sentiment unchanged at 63
Technically the picture is negative after last week’s close at 1.0594 In this week’s trading session if pair continues on the upside and break above (23.6%) level could open the road for 1.0787 If resumes on the downside it will retest 1.0450 (0%) Our traders are long at 1.0530 targeting profits above 1.0900 we are expecting more aggressive buyers at 1.0450
GBPUSD pair closed last week’s trading session marginally higher. The dovish FED’s Powel comments were balanced with BOE’s Bailey’s dovish comments on Inflation and this kept the pair hovering around the same levels. The de-escalation in middle east did actually soften the US Dollar although the impact on the pair was limited mostly due to mixed economic releases from the UK.
As for this week traders and investors will mostly focus on the heavy economic calendar from both the UK and the US. BOE’s Cunliffe is due to speak on Thursday although the impact will be limited.
On the economic calendar we have on Tuesday, the UK ILO unemployment rate to remain the same at 4.3% UK Manufacturing PMI pointing higher at 45 US manufacturing PMI lower at 49.5 and US Services PMI lower at 49.9 On Thursday, US Gross domestic product expected higher at 4.1% On Friday, US core personal consumption expected lower at 3.7% and Michigan consumer sentiment unchanged at 63
Technically the pair is negative after last week’s close at 1.2165 As for this week, if pair resumes on the upside, will need to break and close above 23.6% to change the picture back to neutral. Alternative, if continues on the downside, and breaks below 1.2100 will open the road for 1.2000 Our traders are long at 1.2150 targeting profits above 1.2700. We are expecting more aggressive long positions at 1.2100
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