EUR/USD Forecast and Trade Ideas for June 13 2016

Previous trading day:

During Friday`s trading session currency pair continued bearish trend started on Thursday, with EUR/USD finishing week at level of 1.1250.

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Additional stimulus measures imposed by ECB through corporate bond purchase program became operative on June 8th. Program made significant influence on bond market considering that almost 19% of all corporate bond trades have been made as part of CSPP program within first two days. Additional program of long term loans to banks will become operative as of the end of this month. ECB introduced additional stimulus measures as part of its efforts to cope with deflation trend and to generate growth within Euro Zone.

As Brexit referendum is approaching, its negative effects are becoming one of the major topics among economists. Organization for Economic Cooperation and Development estimated that Britons exit would influence 1% drop of Euro Zone gross domestic product during Y2018. They also noted that negative economic developments would imply further quantitative easing measure by ECB. In case that Britain remains within European Union, OECD estimated Euro Zone growth of 1.6% during this year followed by 1.7% during next year. In an interview, Latvian Central bank Governor Rimsevics noted that all tools are at disposal to European Central Bank to use them in case of emergency if Britons vote for exit. Such measure would also include swap lines allowing British banks to borrow in Euro from Bank of England. On the other side, many traders are now seeing U.S. as safe haven in case of exit. British referendum is scheduled for June 23rd.

List of results released during previous day are following:

EU results 10JuneGerman Consumer Price Index final result for May has been released without any change from initially released data. Since the beginning of this year German inflation has been quite volatile, following general deflation trend within Euro Zone. After significant drop of -0.4% on a monthly basis during April, inflation is back on positive territory during May with 0.3% m/m. Similar changes occurred also on a yearly basis, where CPI dropped to -0.1% in April, and returned to 0.1% during May. Following published data on Harmonized Index of Consumer Prices, German HICP inflation was standing at 0.4% on a monthly and 0.0% on a yearly basis during May.

US results 10JunePreliminary results for June of University of Michigan Confidence show very modest decrease in consumer sentiment to 94.3, down from 94.7 released for May. Released data are modestly below market estimate of 94.5. Other preliminary results are also posted for Current Conditions and Expectations. Released results show increase in current conditions sentiment to 111.7 up from 109.9 posted previously, while there is modest drop for expectations index, reaching 83.2 down from 84.9 previously released.

 

DAY AHEAD:

There are no data releases scheduled for today on Euro Zone or US economy.

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

 

Chart of day:

Chart 13-JunCheck also Euro Dollar History Graph.

Dollar rally started on Thursday session after release of better than expected results on initial jobless claims and increase in wholesale inventories, has been continued during Friday. Currency pair started day testing short term resistance at 1.13. Without strength to break it, EUR/USD reverted toward short term support at 1.1240. This level has been tested on several occasions since the beginning of this year.

Break from 1.1240 short term support level would lead currency pair to next level of 1.12, down to 1.113 and 1.105. On the opposite side, next resistance level from 1.1240 are found at 1.13, 1.1390 up to 1.14 and 1.1450 which is significant long term resistance level tested several times during previous period .

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 13Jun

For 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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