GBP in expectation of Brexit Deadline and EUR farewells Draghi

Hello dear traders! My name is Alina. I’m a financial advisor at AMarkets. Today I would like to share trading ideas for the current week.

The British pound weakened last week after the Parliament rejected the UK Prime Minister Boris Johnson’s latest deal. He had planned to the Parliament onboard with his Brexit deal before the October 31 deadline, but failed. The Parliament agreed to pass a bill forcing Johnson to secure a delay to prevent a potentially damaging no-deal Brexit. Johnson, in turn, called for general election on 12 December hoping to get a majority and push through his Brexit deal, with just a short delay.

The GBP/USD pair keeps trading within the short-term bearish trend. Our target for the next week is 1.2740.

The Euro also declined last week. The European Central Bank (ECB) in its latest monetary policy update last Thursday left key policy rates unchanged (-0.5%), as expected. Draghi leaves his post at the end of October and he is currently the first ECB president to leave the bank without raising interest rates.

The EUR/USD pair is likely to continue its downward dynamics next week. We expect a decline to 1.1000.

This coming week will be rich in fundamental statistics. The Federal Reserve is expected to cut its rate by 25 basis points on Wednesday. The Fed’s Interest Rate is currently at 2%. Also we expect the report on U.S third-quarter GDP growth, which is expected to show that the economy grew by 1.7% in the three month to September, slowing from 2% in the second quarter. Nonfarm Payrolls report for October and Average Hourly Earnings are scheduled to be released on Friday.

We recommend paying attention to the Australian Consumer Price Index in the third quarter, Germany Harmonized Index of Consumer Prices and the Interest Rate Decision by the Bank of Canada on Wednesday. The Bank of Canada is expected to keep rates on hold at the level of 1.75% and could stick to a relatively hawkish tone compared to other major central banks on upbeat domestic growth data and a strong labor market. The Bank of Japan is to announce its Interest Rate decision on Thursday. The Euro-area GDP and Consumer Price Index are also to be released.
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To sum up, here are our targets for:
GBPUSD – sell up to 1,2740
EURUSD – sell up to 1,1000