On Tuesday, despite the bank holiday in Italy and France, the financial markets are likely to remain volatile. Therefore, we need not only focus on the fundamentals, but also on the technical side of the market. Here’s what I’m watching today…
Top Economic Events Today
EUR – Euro
At 6:00 (GMT), Destatis will be releasing the German Prelim GDP q/q and it's expected to beat the previous figure of 0.6% with a new growth rate of 0.7%. This is one of the major fundamental and shows the change in the inflation-adjusted value of all goods and services produced by the economy. It's the broadest measure of economic activity and the primary gauge of the economy's health.
GBP – Great Britain Pound
The Office for National Statistics is scheduled to publish the CPI y/y figure at 8:30 (GMT). It's also expected to come out positive at 2.7%, beating 2.6% from the previous month.
Just like GDP, the CPI figures also play a key role in the determination of monetary policies. The consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to manage the interest rates as per the inflation or deflation in the economy.
USD – US Dollar
At 12:30 (GMT), US investors will be monitoring the Core Retail Sales m/m and Retail Sales m/m. Both are expected to have a positive outcome of 0.3%. This is the primary gage of consumer spending, which accounts for the majority of overall economic activity.
Top Trade Setups Today
EUR/USD – Sideways Channel In Play
The EUR/USD hasn't moved much due to the absence of major economic catalysts on Monday, keeping the technical levels have remained intact.
EUR/USD – Bearish Channel – 2 Hours Chart
The pair is consolidating in a sideways channel, with an immediate resistance at $1.1840. The Stochastic has entered the oversold region as EUR/USD is heading downward to the 50 -periods EMA of $1.1770. This is a good level to catch a sell somewhere around the $1.1825 level. Find the intraday trading levels below.
EUR/USD – Key Trading Levels
EUR/USD Trading Plan
Since the EUR/USD hasn't been the most volatile pair over the past few days, the Eurozone GDP is leaving us with quite a few options. The best one seems to be to stay in a buy position above $1.1750 in order to target $1.1795 and $1.1835 with a stop loss above $1.1735.
GBP/USD – Bullish Flag
Remember the UK economy is about to release inflation figures today, therefore, the Sterling pairs are highly in focus. I was checking out the cable and found a potential trade setup.
GBP/USD – Bullish Flag – 2 Hours Chart
On the two hour chart, the pair has formed a bullish flag pattern signifying a bullish reversal at $1.2950. It's also the triple bottom level, demonstrating investors' bullish bias. So, can we expect a reversal? Well, if we look at momentum indicator, the Stochastic, it's massively oversold at 6 and signifying that sellers may get exhausted and we may see bulls entering the market.
GBP/USD – Key Trading Levels
GBP/USD Trading Plan
Traders, we should wait for the release of the U.K inflation figures to enter any trade in Pound pairs. However, a quick idea is to closely monitor $1.2950 as above this, Cable can go for $1.3015 and below this, the pair can target $1.2900.
In addition to these two pairs, my buddy Rowan has shared his stance on AUD/USD & USD/JPY, check it out here. Patience is key to success in forex, so let's wait for proper setups and news release to see a clear image of the market. All the best fellows and trade with care!
All the best fellows and trade with care!