EUR/USD Forecast and Trade Ideas for May 19 2016

Previous trading day:

Minutes of April FOMC meeting has been released revealing FED officials positive opinion on June rate-hike in case that such move is supported by further economic growth. There are three major economic areas closely monitored by FED based on which further rate increase will depend on, including : second quarter output of US economy, inflation and labor market developments. On the other side, forthcoming Brexit referendum and China currency movements are seen as external risks for outlook, Minutes reveal. Data posted previously on inflation, consumption, labor and output are showing positive developments that could support FEDs decision to strengthen monetary policy during June meeting. Such decision is currently supported by several FED voting members, who publicly expressed their opinion in support of June rate-hike during last few weeks. Still it needs to be considered that UK referendum is scheduled for June 23rd, only eight days after FOMC meeting, indicating on some probability for FED to take cautious approach and once again postpone rate increase. Anyway, June 14-15 will be extremely important days for all Forex traders.

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After release of FOMC Minutes, which heated market expectations on June rate hike, US Dollar gained 0.8% in value against Euro from previous close, trading at 1.1220 levels.

Whether measures imposed by ECB are finally outputting some results is still hard to say with high certainty, however, released CPI figures for April are showing that EU inflation is on halt, at least in this moment. Posted figures show that monthly CPI change in April was 0.0% leaving EU inflation level at -0.2% on a yearly basis also with no change in core inflation of 0.7%.

List of results released during previous day are following:EU results 18-MayUS results 18-May

Released data on Euro-Zone CPI reveal slowdown in EU inflation, and were fully in line with market expectation. Monthly CPI change was 0.0% from 1.2% posted for March, leaving yearly inflation to -0.2%. There has also not been any change in EU core inflation of 0.7%, as previously posted. Although released figures are showing some positive developments at this moment, it is still too early to conclude whether ECB imposed monetary measures are giving results in their major aim to revert deflation trend.

US Mortgage Applications as of May 13th are modestly down to -1.6% from 0.4% previously posted.



EUR/USD Economic Calendar for today is following:

Fundamentals 19-MayToday is going to be relatively relaxed day when fundamentals are in question. ECB account of the latest monetary policy meeting will be released today providing some insight on ECB members view on current economic developments within Euro-Zone. Prior to account release, Euro-Zone current account data for March will be posted. After significant slowdown from beginning of the year, in current account surplus, market is expecting to see some improvements taking into account forecasted figure of Eur22.1b from Eur11.1b posted for February.

As for US data, most important to watch today is initial jobless claims for previous week. After significant increase is claims to 294K posted previously, market is now expecting to see some slowdown of jobless claims to 275K.

Chart of day:

Chart 19-MAY

Release of FOMC Minutes from April meeting heated market expectations on possible June rate-hike, bringing US Dollar to the levels of 1.1220 against Euro, from levels of 1.13 traded previously.

Strong support level at 1.13 that has been tested during previous few days has been breached. Currently, currency pair is trading at next support level at 1.1220 that has been tested on several occasions since February this year.

Break of 1.1220 would lead to currency pair testing next levels at 1.113 down to 1.104.

On the up side, resistance levels are at 1.13, 1.1390 and 1.1450. Euro to Dollar Forecast

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 19-May









Disclamer: 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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