Week Ahead February 20th – 24th

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session lower on U-turn comments from both central banks’ officials comments. FED officials have commented that interest rate should go above 5% while ECB officials commented that need to be very careful regarding tightening farther monetary policy. The higher than expected PPI index in the US added pressure on some FED officials to reconsider their monetary policy approach. Comments from both central banks have generated an uncertainty between central banks ‘members and pushed traders and investors into US Dollar demand.

As for this week, Traders and investors, will mainly focus on the FOMC minutes due to be released on Wednesday. The report will confirm whether the FED is willing to continue its rate hike approach or not. Germany’s loaded economic events will be the biggest catalyst behind any solid move on the pair.

On the economic calendar, we have on Monday the European consumer confidence pointing at -18.3 On Tuesday, German Composite PMI expected at 49.8, German Manufacturing PMI at 47.8, European Composite PMI at 50.5 On Wednesday, German Harmonized index of consumer prices expected at 9.2% On Thursday, US Gross domestic product expected at 2.9% On Friday, German Gross domestic product expected at -0.2% and US Michigan Consumer sentiment at 66.4

Technically the picture is negative after last week’s downside move and closed just above  50%. In this week’s trading session if pair continues on the  upside and breaks above 38.2% could change the picture to neutral and re-test  1.0860  Alternatively, if pair turns on the downside we are expecting to test 1.0600 (61.8%). Our traders are net long by 80% as many short sellers took profit their short positions and more buyers appeared between 1.0870 and 1.0600 targeting profits around 1.1000. We are expecting more aggressive buyers on the way down and short sellers to appear above 1.0900.

GBP/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after an attempt to break lower. The downside move was due to FED officials’ comments, saying that the central bank should continue increasing rates above 5%. The U-turn in officials’ policy makers came after the PPI came out higher than expected. The downside was halted and reversed by the end of the week as UK’s Sunak came closed to an agreement in Brussels regarding northern Ireland’s boarder. The news was well applauded by traders and investors as the long-lasting differences after Brexit are finally coming to an end favoring the UK-EU trade.

As for this week traders and investors will focus on FOMC minutes due to be released on Wednesday. The minutes will guide investors and traders on what’s next for the central bank. The light economic calendar and the lack of any high impact economic events will keep the pair trading within technical levels.

On the economic calendar we have on Tuesday the UK services PMI pointing at 48.3 On Thursday, US Gross domestic product expected at 2.9% On Friday, UK consumer confidence expected at -44 and US Michigan consumer sentiment at 66.4

Technically the pair is negative after closed below 38.2% . As for this week if pair resumes the upside could retest 23.6%. Alternative if continues on the downside, will test 50% A break below 50% could accelerate losses and open the road for 1.1800. Buyers are standing firm at 1.2060 and 1.1960 targeting profits above 1.2200 We are expecting more aggressive buyers on the way down. New short sellers could appear at 1.2200 targeting profits at 1.2000

For more detailed economic calendar events please visit our live economic calendar on: 

https://10tradefx.com/economic-calendar/

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