Week ahead November 21st – 25th

EUR/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after hovering around same higher level as the week before. The pair is struggling to gain more traction as investors are now weighing fundamentals with reality. From the fundamentals point of view the pair has more room to move on the upside as the ECB is more hawkish than ever reiterated that rate hikes will continue till inflation will come back to normal 2%, On the reality side, thing are not so good. Europeans started to feel the pain from high prices, many US firms as Amazon are firing as many as 10,000 workers in Europe. With the winter outside EU’s door, uncertainty grows as for what will happen in the gas supplies. Germany is just one step away from recession and the UK already in recession.

As for this week market participants will mainly focus on the FOMC minutes and US durable goods orders. No rate hike is expected at this meeting. The minutes will guide investors on what next in the FED. The durable goods will be the biggest catalyst for the US Dollar as this is a good indicator to confirm if the US Citizens are still spending, which means that the US economy still holds. A worse than expected number will signal that the US economy is in trouble, and could trigger more US Dollar selloff.

On the economic calendar, we have on Wednesday, German composite PMI pointing lower at 44.9 German Manufacturing PMI higher at 45.2 European composite PMI lower at 47.2 and US durable goods to remain unchanged at 0.4% On Thursday, German IFO business climate expected higher at 85 On Friday, German Gfk consumer confidence expected lower at -45.3 and German gross domestic product to remain unchanged at 1.1%

Technically the picture is positive after last week’s close above 61.8% In this week’s trading session if pair continues on the  upside and close above last week’s higher level (1.0500) could accelerate gains to full recovery of 100% Alternatively, if pair resumes the downside we are expecting to retest 1.0150 (50%). Our traders are sitting on the side and waiting for new indicators on either side. We are expecting short sellers to appear around 1.0600 targeting profits at 1.000 and new buyers around 1.0120 targeting profits above 1.0500

GBP/USD FUNDAMENTALS AND TECHNICAL

Pair closed last week’s trading session unchanged after hovering around same higher levels. The pair managed to maintain its price as the lack of any FED’s official hawkish comments helped the pair to remain steady. The higher than expected inflation number keep the pair higher as traders and investors are pricing in another 0.5% rate hike on next BOE meeting.

As for this week market participants will focus on the FOMC minutes and US durable goods orders. No rate hike is expected at this meeting. The minutes will guide investors on what next in the FED. The durable goods will be the biggest catalyst for the US Dollar as this is a good indicator to confirm if the US Citizens are still spending, which means that the US economy still holds. A worse than expected number will signal that the US economy is in trouble, and could trigger more US Dollar selloff. As for the GBP the main catalyst will be the speeches from BOE’s officials. Hawkish comments are expected and this could boost the pair higher.

On the economic calendar we have on Wednesday, UK composite PMI pointing lower at 47.5 UK services PMI lower at 48 and US durable goods to remain unchanged at 0.4%

Technically the pair is positive as the pair closed above 61.8% In this week’s trading session if pair manages to continue on the upside, will keep the overall picture positive and could open the road to more recovery up to 1.2200 Alternatively a reversal on the downside and a break below (61.8%) could retest 1.1590 (50%)  Short sellers are standing firm at 1.1600 and 1.1740 targeting profits around 1.1550 we are expecting new buyers around 1.190 targeting profits above 1.1900

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

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

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