Week Ahead January 30th – February 3rd

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged while still hovering around multi months higher levels. Last week’s trading session kept the pair unchanged after a choppy trading session mostly due to better than expected US economic releases. The better than expected US economic releases over shadowed by the hawkish stance of ECB’s officials signalling stronger rate hike in the coming meetings. Many officials are supporting another two hikes of 0.5% each. This is keeping investors and traders on the side waiting for the next ECB meeting that will finally confirm the hawkish stance.

As for this week Traders and investors will mainly focus on both central banks’ rate decisions. FOMC minutes are due to be released on Wednesday. The FED is expected to raise interest rates by 0.25%. In the ECB’s meeting on Thursday, the central bank is expected to increase rates by 0.5%.

On the economic calendar, we have on Monday the German gross domestic product pointing lower at 0%. On Tuesday, German retail sales down to -4.3% European gross domestic product lower at 2.2% German Harmonized index of consumer prices higher at 10% On Wednesday, European core harmonized index of consumer prices expected higher at 5.4% US ADP employment lower at 86K US ISM manufacturing PMI lower at 48.2 On Friday, US non-farm payrolls expected to add   175K new jobs and US ISM services PMI to be higher at 53.

Technically the picture is positive after last week’s closed just between 0% – 23.6%  In this week’s trading session if pair continues on the  upside and breaks out of 0% 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 – 1.0900 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 unchanged as traders and investors are standby for the this week’s central banks’ rate decisions. Even though the US economic releases outperformed expectations, the pair managed to remain steady on higher levels waiting for stronger catalyst from both central banks. The divergence between the two central banks is keeping investors and trader in a more positive bias on the pair.

As for this week traders and investors will be focus on both central banks’ rate decisions. On Wednesday the FED is expected to raise rates by 0.25%. on Thursday, BOE expected to raise rates by 0.5%. the heavy economic calendar ahead will give more traction on the pair and possible a new breakout on the upside.

On the economic calendar we have on Wednesday, the UK manufacturing PMI to remain unchanged at 46.7 the US ADP employment with expectations to add 86K new jobs, US ISM manufacturing PMI expected lower at 48.2 On Friday UK composite PMI to remain unchanged at 50.2 US non-farm payrolls to add 175K new jobs and US ISM services PMI expected higher at 53.

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%. With a break out to 1.2500 level.  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: 

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

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