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 8
2019-11-11 • Updated
The US dollar index continues its downward movement. It tested levels below $93.30. The next support lies at $93. No important economic data will be released on Friday. As a result, the further fall may happen.
Oil managed to recover from the negative economic data, however, it didn’t support the Canadian dollar. USD/CAD pair is rising, however, 50-hour MA doesn’t let the pair to move higher. On Friday, traders will take into consideration Canadian job data. The forecast is mixed. If the data are positive, the CAD will be able to rise. The support is at 1.2930 (50.0 Fibo level) and 1.2860. Otherwise, the USD/CAD pair will go up. Resistances are at 1.2975 and 1.3050.
The pound can’t break the resistance at 1.34. No important economic data will be released on Friday. If the pair closes below the resistance, a fall to 1.33 (the pivot point) may be anticipated. However, if the pair is able to break the resistance at 1.34, the further rise will be stopped at 1.3460 (50-week MA). Moreover, the pound fell to a one-month low versus the euro as investors sold the British currency before the British government publishes its proposals for a “backstop” plan for the Irish border.
On Thursday, Australian trade balance data was at the same level as anticipated (0.98B), however, it didn’t support the AUD. As a result, AUD/USD couldn’t stick above the resistance at 0.7660 again, 100-week MA weighs on it. The pair has already tested the support at 0.7640. If the pair closes below the support, the further fall is anticipated. No important economic data will be released on Friday.
The G7 summit is an important thing to look at. It starts on Friday in the morning. Traders will be able to get clues on the world economic growth and make a forecast on future currency movements. The summit is supposed to be interesting as the France President Mr. Macron has signaled that a progress on tariffs, Iran nuclear agreement and Paris climate accord must be made before he'll be willing to sign a joint statement. Let’s see what new we will learn from the summit.
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.