Week Ahead December 5th – 9th
EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on softer than expected US inflation. US dollar selloff continued during last week’s trading session as inflation number came out lower than expectations signalling that the pick is over. Inflation outcome together with FED’s officials’ dovish comments and a clear dovish stance from FED’s Powell highlighting softer interest rates ahead, help the pair to continue on the upside. Just before the end of last week’s session, the better than expected non-farm payrolls did not managed to keep the US dollar on the upside. After a short-lived initial reaction on the downside the pair fully recover and now preparing for more gains.
As for this week market participants will mainly focus on the economic calendar. Without any scheduled central banks’ officials’ speeches, the market will be solely depended from the economic releases. Russia’s president Putin future stance on Ukraine will defy whether EU’s geopolitical turmoil will finally come to an end. Even though Biden’s invitation for direct talks was rejected, all leaders are on standby and hoping for Russian’s new proposal.
On the economic calendar, we have on Monday, European retail sales pointing higher at 2.7% and US ISM services PMI higher at 55.6 On Wednesday, European gross domestic to remain unchanged at 2.1% On Friday, US Michigan consumer sentiment expected lower at 53.3
Technically the picture is positive after last week’s close firm above 61.8% and breaking above last week’s 1.0500 In this week’s trading session if pair continues on the upside could accelerate gains to full recovery of 100% 1.0750 Alternatively, if pair resumes the downside we are expecting to retest 1.0300 (61.8%). Our traders are short at 1.0500 targeting profits at 1.0300 we are expecting more aggressive sellers at 1.0600 Alternative if pair retreats on the downside we are expecting buyer at 1.0300 targeting profits at 1.0600
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session higher on continuing US Dollar’s selloff. The dovish speech of FED’s Powell highlighting softer interest rates ahead and the lower than expected inflation number in the US pushed the US Dollar lower. The deteriorating US economic releases and the lack of any high impact events in the UK helped the pair to maintain a positive bias.
As for this week market participants will focus only on the economic releases from both sides. The lack of any central banks’ officials’ speeches will let the pair on the mercy of market participants.
On the economic calendar we have on Monday the UK composite PMI pointing at 48.3 and the US ISM services PMI pointing higher at 55.6 On Tuesday, UK BRC Like-for-Like retail sales expected at 1.2% On Friday, US Michigan consumer sentiment expected lower at 53.3
Technically the pair is positive as the pair closed above 100% registering new higher level. In this week’s trading session if pair manages to continue on the upside, will keep the overall picture positive and could open the road to more recovery up to 1.2500 Alternatively a reversal on the downside and a break below (100%) could retest 1.1750 (61.8%) Short sellers are standing firm between 1.1600 and 1.2300 targeting profits around 1.1738 we are expecting new buyers around 1.1800 targeting profits above 1.2100 The pair entered an overbought territory and needs extra caution as a sharp downside correction could be around the corner.
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