- The Greenback trades near a 19-month high, supported by safe-haven buying.
- Concerns over a global economic slowdown have reduced cravings for riskier assets like stocks.
- Good day to trade the market sentiment as economic calendar remains light today.
- Technical outlook for the EUR/USD and GBP/USD ahead of FED rate hike decision later this week.
EUR/USD – Symmetric Triangle Pattern Breakout
On Friday, Eurozone businesses concluded the year on a weak note, growing at a moderate pace in over four years. The manufacturing and services PMI figures seemed to be hurt by trade tensions and strong protests in France.
The current week is all about the FOMC and Fed rate decision which are due later this week. The Federal Open Market Committee (FOMC), the Federal Reserve’s main policymaking body, meets this week to decide whether or not to raise interest rates. The recent criticism on Fed and a slight slowdown in global economies weighs on the key policymakers. Anyhow, the dollar is likely to trade with a bullish sentiment until the release of Fed rate decision on Wednesday.
Technically, the EUR/USD consolidates near $1.1315 after placing a low at $1.12772. On the 4-hour chart, the pair broke out of the asymmetric triangle pattern which was providing it a solid support near $1.1330.For now, the same level is working as a resistance. On the lower side, support remains at $1.1270
Daily Technical Levels
Key Trading Level: 1.1361
EUR/USD – Trade Plan
The idea is to stay bearish below $1.1360 with a stop loss above $1.1390 and take profit at $1.1260.
GBP/USD – Developments on Brexit Keep Sterling Vulnerable
On Friday, the British Pound slipped around 1% percent to reach a 20-month low after the Prime Minister Theresa May failed to win key concessions from the European Union to rescue her Brexit deal, which has plunged the economy into chaos.
Today, the British Prime Minister, Theresa May, is likely to state her opposition to a second Brexit referendum on Monday. Since May is facing an impasse in Parliament over her deal to leave the European Union, the politicians are calling for a second referendum to break the deadlock.
On the technical side, the GBP/USD completed Fibonacci retracement at 1.2675 and it’s consolidating right below it now. Looks like the pair is taking a bullish reversal, however, we can’t say much until the release of monetary policy from the Federal Reserve.
Daily Technical Levels
Key Trading Level: 1.2648
GBP/USD – Trade Plan
Today the idea is to stay bearish below $1.2645 with a stop loss above $1.2680 and take profit at $1.2475.