EUR/USD Forecast and Trade Ideas for June 28 2016

Previous trading day:

During yesterday`s trading session markets continued down trend but in much calmer way after Friday`s shock. EUR/USD was traded in range 1.108 to 1.09, down from 1.11 where currency pair finished last week. While US country leaders are  trying to calm markets with rhetoric denying emerging financial crisis after Britons vote, central bankers of developed countries are expressing readiness to provide as much liquidity as need in order to calm market turmoil. US Secretary Lew sees Brexit impact as “orderly” however, putting additional “headwinds” to US economic output, but he expressed general confidence into US economy. On the other side, there was still no comments from ECB officials on Brexit outcome and future moves. President Draghi will hold a speech today on ECB Forum in Portugal, while later will attend European Council summit in Brussels with Brexit as main topic. Hopefully, there would be some more news on ECB`s view on current situation. In addition, European Union Parliament will hold extraordinary session today in order to discuss and vote on resolution on UK referendum.

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List of results released during previous day are following:

US results 27JunUS International trade balance deficit is increased to $-60.6b in May, down from $-57.5b posted previously. Released figure is above market estimate of $-59.0b. Although US started this year with increased  trade deficit of $-62.23b in January, it has been modestly decreased to $-57.53b during April.

Preliminary results for June on Markit Services PMI for services show no change in sentiment from previous month of 51.3 points. Market expectations were standing on side of modest increase to 51.9. On the other side, Markit Composite PMI is modestly increased to 51.2 points from 50.9 posted previously.

 

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 27JunGerman Import Price Index: data for May will be released showing changes in import prices on a monthly and yearly basis. In line with global slowdown, Germany`s import prices had been on a clear down trend since middle of last year, reaching -6.6% on a yearly basis during April. Market is expecting its modest increase in May by 0.6% on a monthly basis, reaching -5.8% y/y.

US Gross Domestic Product: third estimate for first quarter will be released. Initial estimate of 0.5%q/q has been improved during second release, reaching 0.8%q/q. Market is estimating that final GDP figure for first quarter will reach 1.0%q/q. During last quarter of last year GDP was standing at 1.4%q/q.

US Personal Consumption Expenditure: third estimate for first quarter will be released. During first two estimates PCE was standing at 1.9% on a quarterly basis, however, market is expecting its modest increase to 2.0%. During last quarter of previous year, PCE was standing at 2.4%.  There had not been change in core PCE during first two estimates of 2.1%, while market is not expecting any change during third.

US Consumer Confidence: data for June will be released. Significantly increased consumer confidence index during January of 98.1 has been gradually decreasing during the course of this year, reaching 92.6 points during May. Market is expecting its modest increase in June to 93.4 points.

 

Chart of day:

Graph 28-junCheck also Euro Dollar History Graph.

Markets are calming down after Friday`s shock, but are still on bearish side. EUR/USD was traded in range 1.108 to 1.09, down from 1.11 where currency pair finished last week.

Long term support level at 1.09 has been tested on Friday, and again shortly yesterday. Without further strength to break it currency pair reverted toward resistance level of 1.105, reaching 1.108, but finishing day around 1.102 level.

Clear break of 1.09 support level would lead currency pair to next long term support levels at 1.082, 1.07, 1.05 and finally 1.0 which is more perceived by market as “psychological” level.

On the opposite side, next resistance levels are at 1.105, 1.113 up to 1.12 and 1.1240.

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 ideas 28JunFor 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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