Week Ahead September 18 – 22

EURUSD

Pair closed last week’s trading session lower on continuing US dollar’s strength and dovish ECB press conference. ECB surprisingly increase interest rates by another 0.25%. Although the pair didn’t turn on the upside instead, declined to multi month lower levels. The press conference that followed the ECB rate decision was extremely dovish as ECB’s Christine Laggard highlighted that the central bank is now done with interest rates and this fueled expectation that the central bank may start decreasing interest rates in the beginning of 2024.  On the US Dollar side expectations for another 0.25% interest rate increase on Wednesday, boosted demand for US Dollar and added downside pressure on the pair. The higher CPI and better than expected economic releases in the US will support another 0.25% rate hike on Wednesday’s rate decision.

As for this week traders and investors will be focus on the FED rate decision and press conference. It is widely expected a rate hike of 0.25% although the press conference that will follow will guide investors and traders on what the next steps will be in the FED’s monetary policy.

On the economic calendar we have on Tuesday, the European core Harmonized index of consumer prices, to remain unchanged at 5.3% On Wednesday, FOMC. On Friday, German composite PMI expected higher at 44.8 German Services PMI lower at 47.1 European Services PMI lower at 47.5 and US Services PMI lower at 50.3

Technically the picture is negative after last week’s lower close at 1.0661 In this week’s trading session if pair continues on the downside could re-test (100%) level. A break below 1.0600 could accelerate losses down to 1.0500 If resumes on the upside and break and close above 1.0883 (61.8%) will change the picture back to neutral and could open the road for 1.0967 (50%) Our traders are long between 1.1000 and 1.0640 targeting profits at 1.1270 We are expecting many long position to be trigger stop losses if pair breaks and close below 1.0600

GBPUSD

Pair closed last week’s trading session lower on US Dollar’s strength. The better than expected economic releases in the US, and the higher US CPI boosted demand for US Dollar as the expectations for another 0.25% interest rate hike on Wednesday are very high. The deteriorated economic releases in the UK added downside pressure on GBP and this pushed the pair even lower closing at multi month lower levels. Dovish comments from BOE Bailey was another reason for a downside move on GBP as he commented that the central bank may come to and end of it rate hike policy.

As for this week traders and investors will mostly focus on the FOMC and BOE rate decisions. The FED is expected to raise rates by 0.25% on Wednesday. The BOE also expected to raise rates by 0.25%. on Thursday’s meeting. What remain to hear, is the press conferences that will follow the rate decisions and will guide investors and traders on what the next steps from both central banks will be regarding future interest rates.

On the economic calendar we have on Wednesday, the UK consumer price index pointing higher at 7.1% On Friday, UK retail sales expected higher at 0.5% UK Services PMI lower at 49 and US Services PMI lower at 50.3

Technically the pair is negative after last week’s close below (61.8%) at 1.2384 As for this week, if pair resumes on the upside, will need to break and close above 61.8% to change the picture back to neutral. Alternative, if continues on the downside, will test (100%) 1.2320 a break and close below 1.2320 will accelerate losses down to 1.2200  Our traders keeping their long positions between 1.2730 and 1.2430 targeting profits above 1.3000 we are expecting some stop-losses to be triggered if pair breaks below 1.2320

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

https://tentrade.com/economic-calendar/

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