Trading opportunities in the coming week, start with our weekly high impactful fundamental news for week 6. With executive orders being signed to dismantle the previous US administration decisions. What can we expect next for the US Dollar? Bullish or Bearish?
5 February, AtoZForex – US President holds his continuing unpredictability. With the initial challenge on the travel ban being temporarily revoked. Will POTUS accept the outcome of the judiciary decision? Senior Republicans concerned on the relationship with Putin? With Dodd-Frank possibly out of the way, what does it mean for forex traders?
We try to unravel the coming week and give insights on trading opportunities. With EU leaders rejecting the need for UK PM Theresa May becoming a go between Europe and USA. One EU leader has been reported to have said, we do not need UK PM as a mediator, we can always tweet POTUS.
Weekly High Impactful Fundamental News on GBPUSD
Weekly High Impactful Fundamental News for the UK pound
- UK Manufacturing data m/m on Friday 10 February.
Expect GBP to be impacted mainly from news from the Australia, China and USA.
GBPUSD Technical Analysis
For next week, our Fibonacci levels are remain set between low of 1.1855 to the high at 1.2946. GBP has been trading sideways between these two levels. Neither one of these levels have been as yet tested since September 2016. (The Fibonacci levels are drawn in accordance with the teachings of Yagub Rahimov and not the conventional way). On the weekly chart we can clearly see price making higher high’s and higher lows. Which indicates further upside move is possible, with resistance levels at 1.2745, 1.2815-20 (near 10.0% Fibonacci retracement level) and 1.2950.
A fortnight ago, GBP respected the 23.6% Fibonacchi retracement zone and fellow short of the 1.2690 level by 17pips. However, last week the price rebounded from the low of 1.2412 level just 11pips above the 50.0% Fibonacchi retracement zone at 1.2401 and make a new high touching 1.2706 level before sliding back below the 38.2% Fibonacchi retracement zone to touch a low 1.2459. Price currently sits at 1.2480.
Last week we saw price test the 1.2690 level (23.6% Fibonacci retracement zone) and drop well below the 1.2530 level (38.2% Fibonacci retracement zone) to 1.2459 level. From indicators perspective, both the 20sma and 100sma are sloping down. MACD histogram is in the negative territory, with the MACD signal indicating a bullish move. RSI is in the sell zone currently. We have a mixed signals.
For next week
On the bullish side, with price possibly move towards 1.2660 level provided we see a clear break above 1.2530-40 level. Price could also test 1.2611 and 1.2635-40 levels.
On the bearish side, we could see price pull back towards the 1.2505-10 level before dropping to the 50.0% Fibonacci retracement zone at 1.2401 level. If there is a clear break below this level, further downward move is possible to the 1.2310, 1.2388 and 1.2271 price levels.
Weekly High Impactful Fundamental News on EURUSD
Our outlook on EUR has not significantly changed. It remains US dollar driven and with ECB’s dovish position of a wait and see policy previously reported, bias for this pair is bearish.
Weekly High Impactful Fundamental News for the EUR
There no high impact news from Europe this week. There are two medium impact news events, that may move the EUR this week.
- Monday 6 February, we have the German Factory Orders m/m. Market expects positive data.
- Wednesday 8 February, we have the issuance of the EU Economic Forecasts for then next two (2) years for all the EU member states.
EURUSD Technical Analysis – outlook for upcoming week
For the coming week, our Fibonacci zones remain unchanged and are set between the low of 1.0569 to the high at 1.1306. The EURUSD has been range bound from the low of 1.0440 (Mar 8 2015) to the high of 1.1713 (August 23 2015). Although, these levels have been tested, there has been no clear break on either side and has been range bound. EURUSD has been on a bullish move since December 2016.
Unless, price clearly breaks and remains above the 1.1715-20, we would shift our long term bias to the upside.
These are reasons for the mid-long term short position. Unchanged from last week.
- fundamentals weigh heavily on the EUR, mentioned previously
- from the technical perspective, price is below both weekly 20sma and 100sma, indicating a down trend is in place.
- Weekly MACD and Signal line are in bearish territory, whilst RSI is below the 50 level and in neutral territory.
Fx pending mid-long term short position @1.0995-1.1005 SL @ 1.1190
On the hourly chart, last Friday price rebounded to the upside from the daily support at 1.0730 level to break through both moving average to touch a high of 1.0797, respecting the 1.0800 psychological level. Price slid tested the 100sma and closed at 1.0785 level.
For next week
Price currently is above both the 20sma and 100sma and both sloping upwards. The 20sma is below the 100sma and prefer that it is above the 100sma for confirmation of continued upward move. We could see a re-test of the 1.0810 level once more. MACD histogram is just above the neutral level, with the signal line sloping up below the neutral line. RSI is in the neutral zone above the 50 level and moving towards the buy zone.
On the bullish side, a clear break above the 1.0830 level would confirm further upside towards the 1.0880 level. Buy on the retest of 1.0830 level.
On the bearish side, a clear break below 1.0725 level would see price move towards the 38.2% Fibonacci retracement zone at 1.6800 and if prices breaks through this level, then expect further move towards the 61.2% Fibonacci retracement zone at 1.0560 level.
Weekly High Impactful Fundamental News on USDJPY
Two and half weeks into President Trump’s rule, with tweets, sackings, challenges and executive orders. What can the markets expect? Will Japan continue to be USA’s trading partner, with Japanese PM Abe to lean on how many jobs have been created in the US by Japanese companies. US Tech CEO’s very unhappy and affecting their workforce. Will companies move operations overseas? More challenges for POTUS in near future?
Weekly High Impactful Fundamental News for the USD
- On Wednesday 8 February – Crude Oil Inventories.
- Thursday 9 February – Unemployment claims, market expectation is for a rise. Later we have FOMC Member Evans speaking about the economy and monetary policy at the Chartered Financial Analysts’s Society of Chicago.
- Friday 10 February – Preliminary UoM Consumer Sentiment, expected to be lower.
Although not high impact, traders must be aware of the following event,
- Saturday 11 February – FOMC Member Fischer speaks at Warwick University
USDJPY Technical Analysis – Continued bearish bias
The Fibonacci levels remain the same as last week, from the low of 99.00 to the high of 125.85 on the weekly chart.
The USDJPY continued to the downside closing below the weekly 100sma and currently just above the 50% Fibonacci retracement zone. Price is sandwiched between the two weekly moving averages. However, the current pullback from the highs of 118.66 could be part of a deeper pullback to the 109.25 level at weekly 61.8% Fibonacci retracement zone before rebounding to the upside.
On the hourly chart, price is below the 20sma and the 100sma in a bearish direction. As reported last week of a possibility of another opportunity to short the pair at 115.50-55 level. However, price fell short of our SELL entry by 12pips. Also as expected, we saw a clear break of the 114.00 level and 113.80 levels respectively. Price respected the 50.0% Fibonacci retracement zone as it rebounded for a low of 112.05 level. Provided the 113.25-30 area remains intact, we can expect further bearish movement.
For next week
On the bearish side, a clear break below 112.05, we could see price move to the downside to the 110.25 level. For short position wait for a re-test of the 50% Fibonacci retracement zone.
On the bullish side, a clear break above the 113.25 could see up side movement to the 113.50 and then 114.00, with price retesting 115.50-60 level at the 38.2% Fibonacci retracement zone.
Last weeks near term Fx pending short position not triggered order cancelled
Mid-Long term Fx pending long position @110.25; SL @ 60-70pips; TP1 @ 90-105pips;
Which other weekly high impact fundamental news will you be looking into? Have we missed something? Leave your comments below.