EUR/USD Forecast and Trade Ideas for June 10 2016

Previous trading day:

During yesterday’s trading session US dollar gained against Euro and other major currencies, supported by further decrease in initial jobless claims and increase in wholesale inventories, finishing day around 1.13 level.  Such move is perceived by market experts mostly as short term trend correction rather than trend reversal, in light of forthcoming FOMC meeting next week. During previous few weeks several FOMC members supported further rate increase during June / July meetings, however, market expectations are much more on side of July rate hike considering general uncertainty over Brexit referendum and its global consequences.

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In a speech held on economic forum in Brussels, ECB President Draghi called again on joint effort of EU governments to boost growth and inflation in support to already implemented quantitative easing measures by ECB. Reliance only on monetary measures, without conducting structural reforms, might put Euro Zone at risk of continuously slow economic growth with very weak productivity, as noted by Draghi.

List of results released during previous day are following:

EU results 9-JunGerman Trade Balance surplus modestly dropped during April to Eur25.6b from 26.0b reached during March. Released figure is modestly better from market consensus at 22.8b. During first three months of this year German trade surplus was continuously growing, but mostly supported by decrease in imports, and quite modest increase of exports. During April there has not been change in level of exports compared to previous month, while imports are decreased for -0.2%. Both figures were away from market expectation of -0.8% decrease in exports and 1.3% increase in imports. Some market analysts are expecting further relaxation in German trade balance during second quarter considering economic slowdown of its major trading counterparts like China, Russia but also United States.

US results 9-JunUS Initial Jobless Claims reached 264k during previous week, down from 267k posted previously and better from market consensus at 270k. This is third consecutive week with decrease in jobless claims. Continuing claims are also down to 2095k from 2172k posted previously and below market estimate of 2171k.

US Wholesale Inventories are increased by 0.6% during April, above market expectations of 0.1%.

 

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 10JunGerman Consumer Price Index final May result will be released today both on a monthly and yearly basis. Considering deflation trend within Euro Zone, German CPI has been quite volatile since the beginning of the year, reaching 0.1% on a yearly basis, as initial estimate for May, which was increase from April`s -0.1%.  Market does not expect any change from initially posted data: 0.3% on a monthly and 0.1% on a yearly basis.

University of Michigan Confidence preliminary result for June will be released showing current  consumer sentiment in US. During May index reached its highest value since the beginning of this year, reaching 94.7, while market is estimating minor change in sentiment to 94.5 during June.

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

 

Chart of day:

Chart 10JunCheck also Euro Dollar History Graph.

During yesterday`s trading session dollar gained against all major currencies, supported by unexpected further decrease in jobless claims. Dollar reached levels of 1.13 against Euro, down from 1.14 levels traded previously. Short term resistance level at 1.1390 has been tested during last two days. Without strength to break it, currency pair reverted toward short term support at 1.1320.

Clear break from 1.1320 support level would lead currency pair to next levels at 1.12 down to 1.113. On the opposite side, break of 1.1390 resistance would lead to 1.1450 which is long term resistance level tested on several occasions during both this and last year.

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.

 

Trade idea 10JunFor 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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