The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
Weekly Market Outlook: June 24-28
On Monday, we will get a chance to trade the British pound on the inflation report hearings.
Tuesday will be highlighted by the release for the US. Pay attention to the figures of CB consumer confidence.
Wednesday will be important for the NZD traders. The Reserve bank of New Zealand will publish its rate statement. After the rate cut during the previous meeting, we do not anticipate any changes to the current interest rate, but it may be interesting to hear how the bank sees its monetary policy in the future. Also, the USD may be supported by the release of core durable goods orders.
On Thursday we will get another chance to trade the New Zealand dollar on the release of ANZ business confidence. At the same time, pay attention to the level of the final GDP growth for the US.
On Friday, we will finally get another chance to trade the British pound on the release of the current account for Great Britain. Also, the loonie will be awaiting monthly GDP growth for Canada and the Business outlook survey by the Bank of Canada.
Let’s not forget that Friday will be the first day of the G20 Summit in Japan. The main question is whether US president Donald Trump and Chinese President Xi Jinping finally have a wonderful discussion concerning the trade tensions between their countries? The outcome of the meeting will determine the risk environment in the market.
Now let’s look at the technical picture.
Will the USD be supported?
After the Fed indicated the possibility of a rate cut during the last Wednesday’s meeting, On the daily chart, EUR/USD rose above the 100-day SMA and tested the border of the descending trendline on Friday. If the USD continues to weaken, the pair will rise above the 1.1316 level. The next resistance lies at 1.1348, which is close to the 200-day SMA. After that, pay attention to the 1.1390 and 1.1445 resistance levels. From the downside, the first support for bears lies at 1.1257 (100-day SMA). After the break, the pair may fall to the next support at 1.1213 (50-day SMA). The next level is placed at 1.1180.
Will the kiwi weaken after the meeting of the central bank?
The New Zealand dollar took advantage of the weak USD and tested the 50-day SMA on the daily chart. The RBNZ meeting on Wednesday will determine its further direction. If the central bank is hawkish, the pair will break the resistance at 0.6594. In this case, the pair will rise as far as the 0.6681 level will be reached. The next resistance will lie at 0.6719. If the kiwi is not supported and the market is hit by risk aversion, the key levels will be, as follows: 0.6543, 0.6499 and 0.6440.
What are the next levels for USD/CAD?
The loonie was strengthening last week. If the pair continues to go down, it will fall below the 1.3180 level to the next support at 1.3130. After the break, the next support will lie at 1.3065. From the upside, the resistance levels at 1.3249, 1.3316 and 1.3355 are important. If we look at indicators, RSI left the oversold zone on Friday.
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