The European Central Bank (ECB) has raised interest rates by 25 basis points, marking its tenth consecutive rate hike since July 2022 and bringing the total increase to 450 basis points. The ECB is primarily concerned about high inflation levels, both current and projected, with concerns extending into the future.
Trading plan for June 28
2019-11-11 • Updated
- The US dollar index managed to recover and reach the psychological level at $95. Although the core durable goods orders data was weaker than the forecast one, durable goods orders data showed a less decline. As a result, mixed data didn’t let the index fall further. On Thursday, traders will look at final GDP, unemployment claims data (15:30 MT time) and a speech of the Federal Open Market Committee’s member (19:00 MT time). The forecast isn’t encouraging as the GDP is anticipated to stay at the same level, and the number of the unemployment claims is supposed to rise. If the actual data are more positive than the forecast ones, the index will be able to move further. The next resistance will be at $95.30. Otherwise, the index will return to $94.50.
- The euro can’t recover after a significant fall on June 14. Up to now, the pair has broken the support at 1.1615. On H4, you can recognize the “Head and shoulders” pattern. The pair has already passed the way down it was anticipated to pass, so the further direction will depend on the economic data. If actual German prelim CPI (all day) and Spanish flash CPI (10:00 MT time) data are greater than the forecast ones, the pair will turn around and will rise above 1.1615. Otherwise, the support at 1.1590 will be broken. And the further fall to 1.1550 will be anticipated.
Moreover, on Thursday, the EU Economic Summit will start. Traders will get clues on the European economic conditions.
- It will be an important day for the New Zealand dollar. The Reserve Bank of New Zealand will release the interest rate (00:00 MT time). Although the rate hike isn’t anticipated, the Central Bank may give clues on the future monetary policy. If there are hawkish comments on it, the NZD will be able to recover. Up to now, NZD/USD has been moving below the support at 0.6840. If the comments are positive, NZD/USD will appear above 0.6840. Otherwise, the fall to 0.6770 is anticipated.
- On Wednesday, the oil market significantly rose as the crude oil inventories data showed a great decline (-9.9M actual vs -2.4M forecast). As a result, WTI has appeared near the resistance at $73.15. If there is more positive news on the oil market, WTI will be able to move further to $77. Otherwise, the support will lie at 71.15.
Brent has been rising as well. The oil benchmark reached the resistance at $78. Some encouraging news on Thursday will support the further rise to $80. Otherwise, Brent will return to $76.80.
The upcoming August inflation data may send mixed signals. The 12-month headline inflation rate is expected to rise to 3.6%, causing concerns for the Biden administration. However, core inflation, which excludes food and energy prices, is projected to decrease to 4.3%, aligning with the Federal Reserve's goals. Past price trends influence both figures, so looking at recent data for a more accurate picture is crucial.
The odds of a final interest rate hike by the US Federal Reserve (Fed) this year have dropped after US job openings hit their lowest levels since early 2021. This has led to a correction in the US Dollar as traders reduced their bets on further rate hikes.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.