For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for June 21
Here’s a trading plan for Thursday, June 21.
Highlights of Wednesday
- A central banking conference took place in Sintra, Portugal. Both heads of the ECB and the Chairman of the Federal Reserve gave rather hawkish comments, so the impact on the EUR/USD was neutral.
- It was announced that the European Union will begin charging import duties of 25% on a range of US products on Friday. This is negative for the USD, and for both EUR and USD versus such currencies as the JPY.
- Brexit again. Brexit: Theresa May wins 'meaningful vote' battle in parliament about Brexit. Good news for the GBP as there will be more order to the Brexit.
The highlight of Thursday will be the meeting of the Bank of England. Its results (Official Bank Rate, Monetary Policy Summary, and MPC Official Bank Rate Votes) will be out at 14:00 GMT. The bank’s Governor Mark Carney will speak at 23:15 MT time. No policy changes are expected, the pound’s dynamics will depend on whether the BoE is positive or negative about the nation’s economy. The possibility of a rate hike in August is currently estimated as less than 40%. If traders start to see this hike as more likely, this will make the GBP go up. If no clear signals about further hikes come, the GBP will suffer.
So far EUR/USD respected support at 1.1530. A decline below this level will bring the euro to 1.1480. Resistance is at 1.1666.
GBP/USD reached the first weekly pivot support at 1.3178. A decline below this level will open the way down to 1.3075. Pullbacks up will meet resistance at 1.33. The overall trend is still negative.
A decline of EUR/GBP will accelerate below 0.8760 with the target at 0.8725.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
Although the last week was intense, this one may be more dynamic and volatile. After the FOMC meeting and controversial decisions from the Bank of England, we saw a historical pound decrease, and the gold plunge. And there’s even more for you.
After the US CPI last week came out above the forecast, traders started expecting a 75-basis point rate hike…
In this video, we will talk about the potential change of a trend in the euro, another stock rally amid a global downtrend, gold prospects, and news that shakes the world right now. It’ll be a helpful video you don’t want to miss.