EUR/USD Forecast and Trade Ideas for June 17 2016

Previous trading day:

During previous trading session currency pair was traded between levels of 1.1290 down to 1.113, finishing day above 1.1230 levels. Strong volatility has been supported by both Euro Zone and US CPI figures released yesterday, however, BOJ rate decision has also been accounted this time.

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Released data on US consumer price index are showing further modest increase of 0.2% on a monthly basis during May. Although yearly inflation is quite modestly decreased to 1.0%, core inflation reached 2.2% y/y for same period, showing that inflation is slowly picking up. This might provide some accommodation to FOMC members for rate increase later this year. Although Fed revised its initial estimate of four rate increases during this year to two, from this point one rate increase would be much more realistic. Rational for such view is based on simple time schedule. If rates are not increased in July, than it would mean that Fed will increase rates during September and December meetings, which, from policy view, is just not realistic to expect.

List of results released during previous day are following:

EU results 16JunEuro Zone Consumer Price Index picked up during May for 0.4% on a monthly basis, better from market expectation at 0.3%. This might be seen as positive development considering extensive quantitative easing measures imposed by ECB aimed to cope with growth and deflation trend. Whether this is finally reversal of CPI trend within Euro Zone is up to be seen. On a yearly basis inflation is modestly increased to -0.1%, up from -0.2% posted during April, and fully in line with market consensus. Core inflation is unchanged during May of 0.8% posted previously.

US results 16JunUS Current Account Balance reached $-124.7b during first quarter which is its highest increase during one quarter for last seven years. Released figure is modestly above market estimate at $-124.3b, and significantly above revised $-113.4 from $-125.3b posted for previous quarter.

US Initial Jobless Claims are increased during previous week to 277k, after drop for three consecutive weeks. Released data are above market estimate at 270k, and from 264k posted previously.

US Consumer Price Index is modestly up during May with 0.2% increase on a monthly basis but below market expectation at 0.3%. On a yearly basis, inflation modestly dropped to 1.0%, down from 1.1% posted for April. Released data is below market consensus at 1.1%. Core consumer prices are increased for 0.2% during May same as month before, while compared to same period of last year, core CPI is modestly up to 2.2% from 2.1% posted for previous month.

National Association of Home Builders Housing Market Index for June is increased to 60 after four months standing at 58, showing generally improved sentiment on US housing market. Released result is also better from market estimate at 59.

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 17JunEuro Zone Current Account figures for April will be released, both seasonally and non-seasonally adjusted. After strong start of this year with Eur25.4b, current account surplus modestly dropped to Eur19.0b in February, rebounding in March to Eur27.3b.

US Housing Starts data for May will be released showing changes on a monthly basis. After significant drop of -8.8%m/m during March, housing construction reverted to 6.6% m/m in April. Market is expecting modest drop in indicator of -1.9% for May.

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

 

Chart of day:

Chart 17JunCheck also Euro Dollar History Graph.

Yesterday was quite interesting trading session with both strong bearish and bullish trades during a day. Day started with strong bearish trend from levels around 1.1290, this time supported mostly by BOJ rate decision. After reaching short term support level at 1.113, currency pair reverted to bullish trades up to levels of 1.1250. Short term resistance level at 1.1240 has been tested during yesterday`s session.

Clear break of 1.1240 short term resistance level would lead currency pair to next level at 1.1320, 1.1390 up to 1.1450 which is long term resistance level.

On the opposite side, next support levels are found at 1.12, 1.113 down to 1.105.

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 17JunFor 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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