EUR/USD: Attention On Macroeconomic Indicators
Yuri Papshev | Jun 19, 2017 08:47
Last Sunday, the results of the election of deputies of the National Assembly of France were summed up. Observers noted a record low voter turnout. Despite the fact that the Macron party received an absolute majority in the country's parliament, the euro reacted rather sluggishly to the results of the elections. Apparently, all the potential of the positive momentum that was observed immediately after the victory of Macron in the presidential elections in France has already been exhausted.
Now, market participants switch to macroeconomic indicators of the eurozone and the US. Also, investors will continue to evaluate the results of the two-day meeting of the Fed, which ended on Wednesday. As you know, the Fed raised the interest rate by 0.25% to 1.25% and confirmed that it plans another increase towards the end of the year, as well as cutting its budget, which is about 4.5 trillion US dollars. As the head of the Federal Reserve, Janet Yellen stated at a subsequent press conference:
Do not react too harshly to economic indicators. Data on inflation can draw a rather mixed picture.
Nevertheless, among the representatives of the Fed there were disagreements in the matter of raising the interest rate. So, the president of the Federal Reserve Bank of Dallas, Robert Kaplan, said on Friday:
We should be extremely cautious about raising interest rates. We must wait for the acceleration of inflation before advocating for a further tightening of monetary policy,
And yet, the dollar continues to trade with a rise against the assets-shelters - yen, precious metals, franc.
The EUR/USD is also declining from the opening of today's European session. The absence of important economic news today contributes to rather sluggish dynamics in the foreign exchange market. It is likely that the volatility will increase during the American session, when at 12:00 (GMT) the speech of the President of the Federal Reserve Bank of New York, William Dudley, begins at a public discussion of business issues in the United States.
At 15:00 it will be interesting to hear the speech of the head of the German Bundesbank, Jens Weidmann, who is part of the ECB's Governing Council, and who has repeatedly criticised the extra soft monetary policy of the ECB.
At the beginning of today's European session, the EUR/USD pair fell below the short-term important resistance level 1.1200 (200-period moving average on the 1-hour chart) and moves towards the lower border of the descending channel on the 4-hour chart passing near the support level 1.1110 (200- Period moving average on a 4-hour chart).
Technical indicators on 1-hour, 4-hour, daily charts went to the side of sellers, signaling a downward correction.
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On the weekly chart, the indicators also unfold to short positions. The nearest targets in case of further reduction of the EUR/USD pair will be support levels 1.1155 (144-period moving average on the 4-hour chart), 1.1130, 1.1110.
Back to consideration of long positions on the currency pair is possible only after it returns above the level of 1.1230.
In the case of the breakdown of the support level 1.1110, the downward dynamics of the EUR/USD pair will increase.
Support levels: 1.1155, 1.1130, 1.1110, 1.1100, 1.1080, 1.1000, 1.0950, 1.0890
Resistance levels: 1.1200, 1.1230, 1.1280, 1.1340, 1.1600
Trading recommendations
Sell in the market. Stop-Loss 1.1210. Take-Profit 1.1155, 1.1130, 1.1110, 1.1080, 1.1000, 1.0950, 1.0890
Buy Stop 1.1210. Stop-Loss 1.1180. Take-Profit 1.1230, 1.1280, 1.1340, 1.1600
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