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Trading plan for 16/06/2017:
Bank of Japan left the monetary policy parameters unchanged while inflation expectations remain weak despite improving economic conditions. As a result, JPY is the weakest currency from the G10 basket and is the only one losing to the dollar. The strongest are risky currencies - AUD (+0.15%), GBP, and NZD (+ 0.1%). The US dollar is gaining ground across the board again.
On Friday 16th of June, the event calendar is busy with important economic news. Eurozone will unveil the Consumer Price Index, Russia will present Key Bank Rate decision, and Canada will post Foreign Securities Purchases. The US will publish Building Permits, Housing Starts, and Michigan Consumer Sentiment Index.
EUR/USD analysis for 16/06/2017:
The Consumer Price Index data are scheduled for release at 09:00 am GMT and market participants expect no change here, so the 1.4% yearly infaltion increase should remain in place. In April, the increase was much higher at 1.9%, which some commentators erroneously interpreted to imply that the European Central Bank is close to its inflation target of 2%. Low inflation readings, as well as the moderate and declining inflation outlook, will more or less keep the ECB from too-hawkish statements in the near future. Despite a lack of changes in ECB monetary policy, the inflation is not rising fast enough in the Eurozone and recent dovish comments from ECB President Mario Draghi still support the view of wait-and-see approach implemented by ECB. Moreover, the FED hawkish comments this week might suggest the EUR/USD pair will face more selling pressure in the near future as US policymakers have agreed to deliver at least one more hike this year.
Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market is too weak to rally above the golden trend line resistnace, so a failure is expected around the level of 1.1200 again, even if today's data will be better than expected. The market conditions are starting to look oversold and the momentum indicator is still hovering below the fifty level, so the price action at the end of the week should remain sideways. The nearest technical support is seen at the level of 1.1130 - 1.1108 and the next technical resistance is seen at the level of 1.1236.
Market Snapshot: Crude Oil trades below 78% Fibo level
The prices of Crude Oil deteriorated below the 78%Fibo and now are trading just above the last May's low at the level of $43.74. All of the attempts to rally higher resulted only in a fake breakout above the navy trend line and after that the price made new lows. The market conditions remain oversold, but the momentum indicator is still hovering below the fifty level, so no bullish pressure is present at the moment. The next technical resistance is seen at the level of $45.21.
Market Snapshot: AUD/USD under an increasing selling pressure
On the daily time frame chart of AUD/USD, selling pressure (gray rectangle) around the 61%Fibo level can be seen, but the pair is still trying to break out above the technical resistance at the level of 0.7636. The market conditions look overbought, so a corrective move to the downside can happen anytime now. The next technical support is seen at the level of 0.7568
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