EUR/USD Forecast and Trade Ideas for June 20 2016

Previous trading day:

St. Louis Fed Chief Bullard noted on Friday his view that given current state of US economy, most appropriate Fed rate would be 0.63%. As his expectations are on side of neutral economic growth of US economy for future period from where it stands now, he is arguing that only one rate increase would be needed for period of next two and half years. Bullard also openly criticized Fed`s members noting that misbalance between actual projections and actual actions are making distortions and confusion on financial markets, and at bottom line, having negative consequences on credibility of FOMC committee. His expectations on major economic variables over forecast horizon are GDP around 2%, unemployment around 4.7% and inflation moving toward 2%, which is target set by Fed.

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New York FED lowered projections for US gross domestic product to annualized rate of 2.1%, down from 2.4% projected previously. Projected GDP for third quarter is revised to 2.1% from previous 2.2%. This revision in GDP is coming mostly from drop in manufacturing figures recently posted, while retail sales and housing data contributed positively on projection. At the same time Atlanta FED GDPNow forecast figures, based on econometric model, show real GDP growth for second quarter of this year of 2.8%. US economy annualized growth during first quarter was standing at 0.8%.

Week ahead is going to be marked with Brexit referendum scheduled for June 23rd. Central bankers are ready to intervene on markets in case of Britons vote for leave. Anyway, some market volatility might be expected.

List of results released during previous day are following:

EU results 17JunEuro Zone Current Account: released data for April show further increase in current account surplus, reaching Eur36.2b from Eur26.3b revised for March.

US results 17JunUS Housing Starts dropped by -0.3% during May compared to previous month, much lower than market estimate of -1.9%. Decrease has been influenced mostly by construction of multi-family housing.

US Building Permits increased by 0.7% during May on a monthly basis. Although released results are below market expectations at 1.3%, it still signals on improvement in US housing market which would support second quarter economic growth.

 

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 20JunGerman Producer Prices: results for May will be released showing changes in producer prices of German manufacturers both on a monthly and yearly basis. In line with deflation trend within Euro Zone, German producer prices has been following this trend since the beginning of this year, moving from -2.4% on a yearly basis in January, down to -3.1%y/y during March and April. Market is expecting some modest improvement in German PPI of 0.3%m/m and -2.7%y/y.

Euro Zone Construction Output: data for April will be released both on monthly and yearly basis. After significant increase in January of 4.9% on a yearly basis Euro Zone construction output modestly decreased during following months, reaching -0.5% y/y during March.

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

 

Chart of day:

Graph 20JunCheck also Euro Dollar History Graph.

During previous trading day currency pair was traded with bullish trend from levels 1.1220 up to 1.13. Resistance level at 1.13 became significant during recent trades, considering that each day during previous week it has been tested.

Clear break of 1.13 resistance level would lead currency pair to next short term resistance at  1.1320 further to 1.1390 and 1.1450 which is long term resistance level.

On the opposite side, next support levels are found at 1.1240, 1.12, down to 1.113 which has been tested on Thursday last week.

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 20JunFor 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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