Week Ahead January 23rd – 27th
EUR/USD FUNDAMENTALS AND TECHNICAL
Pair closed last week’s trading session unchanged and continues testing last month’s higher levels, signalling a breakout momentum. The online with expectations economic releases kept the pair around same range as last month. Mixed comments from both central bank the FED and the ECB kept traders on hold till the next meetings.
As for this week Traders and investors will mainly focus economic calendar releases and the speeches from central bank’s officials. This will be the last week of speeches from both central bank before they release their February decisions. Traders and investors will be once again on hold until they will have a clear signal form both central banks whether they will maintain their interest policy unchanged or not, currently the divergence between the two central banks are keeping the pair higher.
On the economic calendar, we have on Tuesday the German manufacturing PMI pointing higher at 47.9 the European Composite PMI higher at 49.8 On Thursday, US durable goods orders expected higher at 2.5% US Gross domestic product lower at 2.8% On Friday, Michigan consumer sentiment to remain unchanged at 64.6
Technically the picture is positive after last week’s closed just below 100%. In this week’s trading session if pair continues on the upside and breaks out of 100% could accelerate gains and test 1.1000 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 higher than expected UK CPI. The release has triggered buyers into higher demand for GBP ahead of BOE interest rate decision. The central bank will be force to maintain its aggressive interest rate policy unchanged as the inflation persist on the upside. The divergence between the two central banks is becoming wider and this keeps the pair on the upside.
As for this week traders and investors will be focus on the technical levels as the main point of decision making. The lack of any high impact economic releases from the UK will keep the pair on the faith of US Dollar’s releases.
On the economic calendar we have on Tuesday UK Services PMI to remain unchanged at 49.9 On Thursday, US durable goods orders expected higher at 2.5% US Gross domestic product lower at 2.8% On Friday, Michigan consumer sentiment to remain unchanged at 64.6
Technically the pair is positive as it continues trading higher and closed just below 0% level. As for this week if pair continues on the upside could retest 0%. Alternative a break below 23.6% could accelerate losses and change the overall picture to neutral. We are expecting new buyers to appear at 1.2200 targeting profits above 1.2500. New short sellers appeared at 1.2400 targeting profits at 1.2200, we are expecting more aggressive short sellers on the way up.
For more detailed economic calendar events please visit our live economic calendar on:
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