Week Ahead January 16th – 20th
EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session firm higher registering a new multi month higher level. Advanced was due to lower than expected US Inflation. The lower than expected will definitely influence FED’s rate decision. The dovish stance from some FED officials added downside pressure on the pair while ECB official maintaining their hawkish stance.
As for this week Traders and investors will mainly focus economic calendar releases and the speeches from central bank’s officials.
On the economic calendar, we have on Tuesday the European ZEW economic sentiment pointing lower at -57 On Wednesday, European Harmonized index of consumer prices to remain unchanged at 5.2% and US retail sales expected lower at 0.1% On Thursday, US jobless claims expected higher at 214K On Friday, German producer price expected at -1.2%
Technically the picture is positive after last week’s break out and closed above 100% the Fibonacci levels are changing now as the pair’s trend has changed positive with more gains ahead. In this week’s trading session if pair continues on the upside could retest 0% 1.0860 Alternatively, if pair resumes the downside we are expecting to retest 1.0720 (23.6%). Our traders are short between 1.0500 – 1.0840 targeting profits at 1.0300 we are expecting stop losses to be triggered above 1.0900 Alternatively, if pair retreats on the downside we are expecting new buyers at 1.0700 targeting profits at 1.0900
GBP/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session firm higher on lower that expected US inflation number. The lower than expected US inflation number will have huge impact on the future FED rate decision. Traders and investors are selling off their US Dollar positions as they start to pricing in expectations of lower interest rates in the US. The dovish speeches from some FED officials also weighted negative on US Dollar and that helped the pair maintain a bullish bias.
As for this week traders and investors will be focus on the heavy economic calendar form the UK. From the US side a few speeches form FED’s official could also create some volatility. Although we are expecting the speeches to be same dovish as last week.
On the economic calendar we have on Tuesday UK ILO unemployment rate to remain unchanged at 3.7% On Wednesday, UK consumer price index expected lower at 10.6% and US retail sales expected lower at 0.1% On Thursday, US jobless claims expected higher at 214K On Friday, UK Gfk consumer confidence expected at -40 and UK retail sales at -4.2%
Technically the pair is positive as it broke and closed above 23.6% level. As for this week if pair continues on the upside could retest 0% alternative a break below 38.2% could accelerate losses and change the overall picture to neutral. Buyers took profit all their positions. We are expecting new buyers to appear at 1.2045 targeting profits above 1.2300. Alternative if pair continues on the upside short sellers will appear around 1.2400 targeting profits at 1.2000
For more detailed economic calendar events please visit our live economic calendar on:
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