EUR/USD Forecast and Trade Ideas for June 01 2016

Previous trading day:

In light of forthcoming ECB policy meeting on Thursday, yesterdays release of Euro zone CPI figures was crucial event. Figures show -0.1% CPI for May on a yearly basis, which is quite modest improvement from -0.2% posted previously. Although result for May might be seen as modest slowdown in inflation trend, it is still early to give definite conclusion on trend reversal. How it is going to be perceived by ECB members is about to be seen on Thursday.

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Released figures on US economy show real personal spending increased for 0.6% m/m during April. This is additional data that implies on potential future course of inflation and in this sense, reaction from Fed through strengthening of monetary policy during forthcoming June or July meetings.

List of results released during previous day are following:

EU results 31-mayGerman Retail Sales are down -0.9% in April compared to previous month and significantly below market expectation of 0.9%. However, compared to same period of last year retail sales are increased by 2.3%. Figure is also better from 0.7% posted in March and above market consensus at 1.7%.

German unemployment is continuing steady down trend reaching 6.1% in May, down from 6.2% posted previously. Result is also modestly below market expectations at 6.2%.

There has not been any change in Euro zone unemployment rate in April from 10.2% posted previously, which is also fully in line with market expectations.

Euro zone Consumer Price Index estimate for May show quite modest improvement, reaching -0.1% on a yearly basis, from -0.2% posted for April. Core inflation is also modestly increased to 0.8% y/y from 0.7% released for April.

US results 31-MayUS Personal Income is increased for 0.4% in April on a monthly basis, same as month before. However, Personal spending is increased for 1.0% m/m in April, compared to 0.1% posted for March and above market consensus at 0.7%. Real Personal Spending is up for 0.6% m/m, significantly above 0.0% released previously.

US Core Personal Consumption Expenditure is modestly increased for 0.2% on a monthly basis, in line with market expectations, leading to no change from previous release of 1.6% on a yearly basis.

 

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

fundament 01-JunFederal Reserve Beige Book will be released today. Although release of Beige Book usually does not imply on any significant market reaction, it is valuable source of information on current situation in US general business conditions and sentiment.

Final for May Markit Manufacturing Purchasing Managers Index will be released today for German and Euro zone manufacturing. From the beginning of this year sentiment for Germany is significantly improved, reaching 52.4 in May during first release. On the other side, sentiment for Euro zone was modestly decreasing since January, reaching 51.5 in May, but still above 50. Market is not expecting to see any change from initially released figures.

Final May Markit US Manufacturing PM index is also scheduled for today, with market expectation of no change from previous release of 50.2. In addition Institute for Supply Management will release it`s US Manufacturing index for May with market expectation of modest decrease in manufacturing sentiment to 50.4 from 50.8 previously posted.

US Construction Spending : results for April will be posted on a monthly basis. Taking into account rebound of US housing market followed with increase in wages and employment, market is expecting to see some further increase in US construction spending of 0.5% in April. Previously posted result was 0.3%.

Update on released results you can follow-up on Euro Dollar News and EUR/USD Economic Calendar.

Chart of day:

Chart 01-JunCheck also Euro Dollar History Graph.

Yesterday was additional relatively calm day on EUR/USD market with currency pair trading between levels of 1.1172 down to 1.1122, testing short term support level at 1.113.

Next resistance levels are at 1.12 up to 1.1320 and 1.1390.

Break of 1.113 current support level followed with short term 1.11 level would lead to next support levels found at 1.105 down to 1.096 and 1.082 which is long term support level.

Below are presented some trading ideas for today, based on technical analysis taking into account current level of EUR/USD trend and excluding overnight open positions.

Trading idea 01-junFor long term EUR/USD forecast from investment bankers check Euro to Dollar Forecast

Disclaimer: Above presented trading ideas represent personal view of the author and should not be treated as any sort of investment advice or trading recommendation.

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