May 10, 2015
EUR/USD
- Breaking above the level of 1.1050 (which is a very strong supportive level now) has triggered a number of stop-loss orders which have accelerated the EUR/USD rise. In our opinion there is a scope for further gains to the 1.1534, high on February 3 in the medium term. We expect the EUR/USD to rise this week, but at a slower pace than it has been observed recently. We keep our long EUR/USD position taken at 1.1235 with the target at 1.1450.
- Looking at the macroeconomic calendar for this week we think that the release of first-quarter GDP growth for the Eurozone (Wednesday) could be important. Our forecast is 0.4% qoq. This is an improvement from the previous quarter, but probably not enough to push the EUR much higher.
- Investors will be focused also on U.S. retail sales reading (Wednesday, 12:30 GMT). Our forecast is slightly below the market consensus.
GBP
- The Bank of England meeting is scheduled for Monday, but it is likely to be a non-event for investors. GBP traders will be focused on the release of industrial production for March (on Tuesday), the employment report (on Wednesday) and the inflation report (on Wednesday).
- BoE inflation report may point to higher CPI path. After all, oil price is now more than 15% higher since the previous inflation report was published. More “hawkish” inflation report may shift expectations for the first rate hike, now seen for June 2016, to an earlier date and this would give the GBP/USD a boost.
