EUR/USD Forecast and Trade Ideas for June 14 2016

Previous trading day:

During yesterday`s trading session in absence of important data releases for both US and EU economy, currency pair was traded within range of some 60 pips from levels 1.1233 up to 1.13. Yesterday`s bullish trading might be seen as short term trend correction as traders are setting their positions for Wednesday`s FOMC decision. Relatively weak employment data recently posted influenced some market analysts to revise their expectations on Jun/July Feds rate hike. Expectations are currently to some extent split, with some shift toward only one rate increase for this year during September or December FOMC meetings.

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ECB corporate purchase program has made significant impact on European bond market. During first three days of program ECB bought corporate bonds in total worth of 342 million Euros. Corporations are using opportunity to get cheap money, however, market analysts see some significant risks involved in the scheme. Aside from possibility that ECB might end up with huge portfolio of junk bonds, analysts are pointing to possibility of asset bubble followed with market distortions as fundamentals will not be reflected in credit spreads. In effort to support economy growth and inflation ECB has already used 1.74 trillion Euros.

There has not been data releases scheduled for yesterday on Euro Zone or US economy.

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 14-JunEuro Zone Industrial Production: results for April will be released on a monthly and yearly basis. Strong industrial output of 2.1% on a monthly basis during January has been diminished to some extent with drop of -0.8% m/m during February and March. Comparing to same period of last year, strong Euro Zone industrial output of 2.1% during January has slowed down to 0.8% in February, finally reaching 0.2% during March. As per latest market estimate expected industrial production output for April is 0.8% on a monthly and 1.4% on a yearly basis.

US Retail Sales: results for May will be released. After quite modest beginning of the year, US retail sales strongly rebound reaching 1.3% increase on a monthly basis during April. Market is expecting further modest increase of 0.3% during May. Retail sales excluding autos were increased for 0.8% on a monthly basis during April, with market expectations of further 0.4% m/m increase in May.

US Business Inventories: results for April will be released showing changes in wholesalers business inventories from previous month. After significant increase in business inventories during March of 0.4%, market is expecting to see some relaxation with modest increase of 0.2% on a monthly basis during April.

National Federation of Independent Business small business optimism index will be released for May. During April index was standing at 93.6, increased from 92.6 posted previously. As per NFIB two major issues that halt further business expansion of small businesses currently is luck of qualified workers and political climate.

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

 

Chart of day:

Chart 14-JunCheck also Euro Dollar History Graph.

In absence of data releases on both US and EU economy, currency pair was trading in relax mode within range of some 60 pips from levels 1.1233 up to 1.13. Short term resistance level at 1.13 has been tested. Short term support level at 1.1240 has also been tested during yesterday’s trading session.

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 14-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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