Key Indicators to keep in mind for EUR/USD next week’s trade:
1. Announcement of CPI for May 2023 on Tuesday 13 June 2023
2. FOMC’s decisions on Interest Rates on Tuesday 14 June 2023
3. Press Conference by ECB on Thursday 15 June 2023
The above mentioned announcements are key stimulations for the price movement of EUR/USD. These indicators can guide the price movement in short-term.
US Inflation
Inflation in the US is expected to continue its downward trend. In terms of CPI in May it dropped to 4.1% from 4.9% the previous month. The headline CPI, excluding food and energy items, is expected to fall to 5.2% from 5.5%, and the higher the number, the lower the 5.2%. It's even better for the US dollar. and even worse for risky assets.
Fed Decision
In the past few weeks, the Federal Reserve has become more cautious and has signaled that it may keep interest rates at the same level in June to assess the impact of tightening measures on the economy. However, when considering the flexibility of the US economy, temporarily pausing interest rate hikes could be a significant mistake for the FED. For example, if inflation rates were to rise again, policymakers might need to quickly reverse course to return to higher and non-standardized interest rates. That would cause an unnecessary risk.
ECB Decision
Analysts predict that the European Central Bank (ECB) will raise interest rates in the fourth quarter at the June meeting. This decision is influenced by easing inflation rates and a declining economy in Germany. Therefore, the ECB may exercise caution and avoid presenting aggressive policy forecasts that could have negative implications for the economy.
Technical
EUR/USD has rapidly decreased from its peak in May. During this downward trend, the price has declined for over two months before experiencing a slight rebound and testing the resistance level near 1.0750/1.0800.
For the EUR/USD trend to reverse, the price would need to stay above the resistance level at 1.0750/1.0800 (gray line) in order to test the target at 1.0900 (blue line).
On the other hand, for short positions, the first take profit level could be considered at the initial support zone around 1.05800 (red line).
However, we suggest that there is a chance of a rebound as the current price remains above the EMA 50 and there is a bullish divergence in the 4-hour timeframe. If the price fails to stay above the EMA-50 line, traders could consider following short positions.
1. Announcement of CPI for May 2023 on Tuesday 13 June 2023
2. FOMC’s decisions on Interest Rates on Tuesday 14 June 2023
3. Press Conference by ECB on Thursday 15 June 2023
The above mentioned announcements are key stimulations for the price movement of EUR/USD. These indicators can guide the price movement in short-term.
US Inflation
Inflation in the US is expected to continue its downward trend. In terms of CPI in May it dropped to 4.1% from 4.9% the previous month. The headline CPI, excluding food and energy items, is expected to fall to 5.2% from 5.5%, and the higher the number, the lower the 5.2%. It's even better for the US dollar. and even worse for risky assets.
Fed Decision
In the past few weeks, the Federal Reserve has become more cautious and has signaled that it may keep interest rates at the same level in June to assess the impact of tightening measures on the economy. However, when considering the flexibility of the US economy, temporarily pausing interest rate hikes could be a significant mistake for the FED. For example, if inflation rates were to rise again, policymakers might need to quickly reverse course to return to higher and non-standardized interest rates. That would cause an unnecessary risk.
ECB Decision
Analysts predict that the European Central Bank (ECB) will raise interest rates in the fourth quarter at the June meeting. This decision is influenced by easing inflation rates and a declining economy in Germany. Therefore, the ECB may exercise caution and avoid presenting aggressive policy forecasts that could have negative implications for the economy.
Technical
EUR/USD has rapidly decreased from its peak in May. During this downward trend, the price has declined for over two months before experiencing a slight rebound and testing the resistance level near 1.0750/1.0800.
For the EUR/USD trend to reverse, the price would need to stay above the resistance level at 1.0750/1.0800 (gray line) in order to test the target at 1.0900 (blue line).
On the other hand, for short positions, the first take profit level could be considered at the initial support zone around 1.05800 (red line).
However, we suggest that there is a chance of a rebound as the current price remains above the EMA 50 and there is a bullish divergence in the 4-hour timeframe. If the price fails to stay above the EMA-50 line, traders could consider following short positions.