Week Ahead May 20th – 24th
EURUSD pair closed last week’s trading session higher on softer CPI number. Inflation in the US came out softer at 3.6% down from last 3.8% triggering a selloff in US Dollar as this is adding pressure on FED to adjust its monetary policy and reduce interest rates sooner. Although, speeches from FED’s officials were not so dovish for US Dollar as, all of them welcome the lower CPI number, but, commented that they will need more evidence and to be more convinced that inflation will target 2% before they start reducing interest rates.
As for this week, traders and investors will mainly focus on the FED’s officials’ speeches during the week and the FOMC minutes due to be released on Wednesday. Speeches are expected to create some volatility as many the local governor’s positions on interest rate may differ. FOMC minutes will need to be weighted and get a result on what the FED’s stance will be in the next interest rate decision.
On the economic calendar we have on Thursday, German manufacturing PMI pointing higher at 53.5 European manufacturing PMI higher at 46.6 and US Services PMI at 51.3 On Friday, US Durable goods orders expected lower at 0.5%
Technically the picture is positive after last week’s close above (50%) at 1.0868 In this week’s trading session if pair trades on the upside will test 1.0950 If trades on the downside will retest 1.0772 Our traders took profit all their long positions at 1.0900 New sell positions were opened at 1.0865 targeting profits below 1.0700 We are expecting more aggressive short positions on the way up and new long positions on the way up.
GBPUSD pair closed last week’s trading session higher on softer CPI number. Inflation in the US came out softer at 3.6% down from last 3.8% triggering a selloff in US Dollar as this is adding pressure on FED to adjust its monetary policy and reduce interest rates sooner. Although, speeches from FED’s officials were not so dovish for US Dollar as, all of them welcome the lower CPI number, but, commented that they will need more evidence and to be more convinced that inflation will target 2% before they start reducing interest rates.
As for this week, traders and investors will mainly focus on UK CPI release that expecting to print a lower number at 3.7% if this will be the case we are expecting a selloff in GBP as this will add pressure on BOE to reduce interest rates. FOMC minutes are due to be release on Wednesday and this will guide investors and trader on the future path of the central bank. Many FED’s officials are due to speak during the weeks and this will generate some volatility as their position on interest rate may differ.
On the economic calendar we have on Wednesday, the UK CPI pointing lower at 3.7% On Thursday, UK manufacturing PMI expected higher at 49.2 and US services PMI at 51.3 On Friday, UK retail sales expected lower at -0.2% and US durable goods orders lower at 0.5%
Technically the pair’s overall picture is positive after last week’s close below (61.8%) at 1.2700 As for this week, if pair trades on the upside, will test 1.2800 Alternative, if trades on the downside, will test 1.2586 (50%) Our traders took profit all their long positions We are expecting new short positions at 1.2720 and new long positions at 1.2586
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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