EUR/USD Forecast and Trade Ideas for June 22 2016

Previous trading day:

During yesterday’s trading session currency pair was traded with bearish sentiment between levels of 1.1348 down to 1.1243 supported by Fed Chair Yellen semi-annual testimony on monetary policy to Senate Banking Panel. She acknowledged that hiring has slowdown and that Fed will pay close attention to US job market before final decision on next interest rate move. In this sense, she noted that most probably Fed will not act during July meeting, as only one additional employment report would be at disposal to FOMC members to draw conclusion on its trend. Once again it has been noted that Fed will in future take cautions approach toward any move in monetary policy. As Brexit referendum is recognized as one of risks for US economy during both April and June FOMC meetings, Fed Chair Yellen noted that it could put negative outlook on economy through slowdown in productivity, but not explicitly seeing that Britons exit could drag US economy back into recession. Fed Chair Yellen will continue testimony to Senate today with House Committee.

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List of results released during previous day are following:

EU results 21JunZEW economic sentiment for Germany significantly increased for June reaching 19.2 points from 6.4 posted for previous month. This is index highest level since August Y2015. As per ZEW report, such strong increase in economic sentiment for Germany for period of next six months is “paradox” considering current relatively difficult conditions for German economy including forthcoming Brexit referendum and global economic slowdown. Reason for such strong move from pessimistic to optimistic outlook among financial experts, ZEW experts are finding both in recent poll estimate that Britons would not leave EU, and also in resilience of German economy to economic shocks. Index on current situation is also increased with 54.5 points, up from 53.1 posted for previous month and also above market estimate at 53.0.

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 22JunUS MBA Mortgage Applications: data will be released showing changes in mortgage applications for release week of June 17th. After strong increase of 9.3% during first week of June, applications modestly slowdown with -2.4% in the following week. Some forecasted figures are showing potential increase of 1.22% for previous week, but still without market consensus.

US House Price Index: data for April will be released showing changes in index from previous month. Since the beginning of this year HPI is continuing up trend with increases of 0.5%m/m in January, 0.4%m/m in February and 0.7%m/m in March. Market is expecting HPI to be further increased by 0.7% m/m during April.

US Existing Home Sales: results for May will be released. During second quarter of this year, US housing market generally rebound with some strong figures released on home sales. After strong drop in February of -7.1% on a monthly basis, existing home sales market rebound by 5.1%m/m in March followed with 1.7% in April. Market is expecting continuing positive trend with 1.8% m/m increase during May.

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

 

Chart of day: Euro Dollar History Graph.

 

During yesterday’s trading session currency pair was traded with bearish sentiment between levels of 1.1348 down to 1.1243 supported by Fed Chair Yellen testimony to Senate. Short term support level at 1.13 has been breached with EUR/USD heading toward next support at 1.1240.

Clear further break of 1.1240 support level would move currency pair to test next levels found at 1.12, down to 1.113 and 1.105.

On the opposite side, current resistance levels are at 1.13, 1.1320 further to 1.1390 and 1.1450 which is long term resistance level.

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 22JunFor 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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