Let’s start with a look at the economic calendar for the upcoming days.
Weekly Forex Outlook: June 18-22
The US dollar reached a seven-month high last week.
American central bank – the US Federal Reserve – gave a hawkish signal on interest rates while the European Central Bank had a dovish tone.
The USD index, which tracks the dynamics of the US dollar versus 6 other currencies, has resistance at 95.00. If the greenback breaks higher, next target will lie at 96.00. Support is at 94.20.
The United States and China enacted trade tariffs upon each other, but traders think that they would avoid a full-blown trade war. Such optimism supports the USD, although risks remain.
The economic calendar for this week is interesting. There will be many speeches of central bank members and meeting on the Swiss National Bank and the Bank of England on Thursday. One of the highlights will also be the meeting of the world’s largest oil exporting countries on Friday. As top suppliers Saudi Arabia and Russia would likely increase production oil price is under pressure. US building permits will come out on Tuesday, New Zealand will release GDP on Thursday and Canada will publish CPI and retail sales on Friday.
The Canadian dollar, which is closely linked to oil, is suffering. USD/CAD broke above March high at 1.3125. The next target is at 1.3290.
The ECB said it would keep interest rates unchanged through the summer of 2019 and the euro didn’t take it well. EUR/USD plunged to 1.1560. Support is at 1.1480 ahead of 1.1357. Resistance is at 1.1665 and 1.1790.
GBP/USD made a swing down last week. There’s support at 1.32/1.3175. The divergence on the daily chart makes this support rather strong, although the overall downtrend is still in place. Traders expect the BoE to keep rates on hold on Thursday but will look for any signs that the central bank is more comfortable with how the economy is performing after a difficult first quarter.
USD/JPY went above 200-day MA at 110.20, which is now a support. Bullish momentum has slowed though. Resistance at 111.28. Trade concerns and a strong earthquake that hit the western Japanese city of Osaka may keep the pair from strong advance.