Weekly Technical Analysis For February 11th to 15th, 2019

A Busy Week Ahead; US CPI Is In Focus

EUR/USD:

The Euro was under pressure last week by weak economic data and growing evidence of a slowdown in the Eurozone. The European Commission lowered its growth forecast for the Eurozone last Thursday, after notable reductions in estimates for all three of the largest economies in the region - Germany, France, and Italy. The EU now expects a growth of 1.3% in 2019, compared to its prior November projection of 1.9%, and a 1.6% expansion for 2020, compared to the previous forecast of 2.0%.

Looking ahead this week, the U.S.-China Trade Talks will be significant. A 90-day trade truce between the US and China will expire on March 1. If the deadline passes without a deal, the US President Trump has said he could follow through on his threat to increase tariffs on as much as $200 billion worth of Chinese goods.

Additionally, the Consumer Price Index and Retail Sales are in focus in the US.

One of the major indicators of economic conditions, US CPI Inflation, will be published on Wednesday. January’s Consumer Price Index is expected to come out at 1.5%, lower than a previous number of 1.9%. Also, Core CPI inflation is expected to ease to 2.1% from 2.2%.

Core Retail Sales excluding auto and gas are expected to ease to 0.0% m/m from 0.2% growth in the previous number. A lower than expected reading should be taken as negative for the greenback.

If we look at the Eurozone area, the Gross Domestic Product will be published on Thursday. The GDP is expected to come out at 0.2% q-o-q growth, the same as the previous number. This would lead to an annual realization of 1.2%. A better than expected realization may support the single currency.

As long as the EURUSD pair stays below the 1.1367 major level, on a daily basis, the downward movement may gain more momentum and we will follow 1.1262 and 1.1188 as key support levels. On the other hand, if the pair goes beyond 1.1367, the resistance level will be placed at 1.1446.

Support: 1.1262 - 1.1188 - 1.1122

Resistance:  1.1367 - 1.1446 – 1.1531

GBP/USD:

The Bank of England left its key interest rate unchanged last Thursday, as expected. The BoE noted that U.K. economic growth slowed in late 2018 and appears to have weakened further in early 2019. This slowdown mainly reflects softer activity abroad and the greater effects of Brexit uncertainties at home.

In the upcoming week, the UK CPI Inflation and GDP growth will be important releases for the Sterling. The UK CPI inflation is expected to ease to 1.9% from 2.1% year-on-year,

The UK GDP is expected to ease to 1.4% from 1.5%. A lower than expected reading should be taken as negative for the Sterling

The GBPUSD pair closed last week below the 1.2961 daily resistance level. As long as the price stays below 1.2961, on a daily basis, the fall may continue. At this point,  we will see support levels at 1.2844 and 1.2712. On the other hand, if the price rises above 1.2961, the next resistance level can be seen at 1.3050.

Support: 1.2844 - 1.2712 - 1.2624

Resistance: 1.2961 - 1.3050 - 1.3152

USD/JPY:

The USDJPY pair closed last week below the key level of 109.90. As long as the pair stays below 109.90, on four hourly bases, the rise may be limited and we will face the daily support level at 109.35. On the other hand, if the price rises above 109.90, the next resistance level will be at 110.86.

Support: 109.35 - 108.78 - 107.65

Resistance: 109.90 - 110.86 - 111.66

GOLD:

The GOLD Price showed an upward movement last Friday. In the event that the bullish action continues, we will see 1319 and 1330 as key resistance levels.  On the other hand, if the yellow metal breaks down 1307, the next support level can be found at 1291.

Support: 1307 - 1291 - 1283

Resistance: 1319 - 1330 - 1.352

10 Feb 19 (Sun)

07:38 pm


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