Ian Coleman running through his anaylsis this morning on EURUSD. Join us on Telegram for more trade ideas – https://t.me/signalcentre
The rally was sold and the dip bought resulting in mild net losses yesterday. Trading inside the Daily Ichimoku Cloud. Ichimoku cloud support comes in at 1.1192. There is no clear indication that the downward move is coming to an end. We are trading at oversold extremes. Risk/Reward would be poor to call a sell from current levels. Further downside is expected although we prefer to set shorts at our bespoke resistance levels at 1.1237, resulting in improved risk/reward.
Our profit targets will be 1.1130 and 1.1100
Resistance: 1.1237 / 1.1265 / 1.1310
Support: 1.1192 / 1.1128 / 1.1100
EUR/USD – News
The US NFIB small-business confidence index declined to 103.5 for June from 105.0 the previous month, although this was close to market expectations. JOLTS data recorded a slight decline in May job openings to 7.32mn from 7.37mn the previous month. There was a decline in the number of hire and separations for the month, but still a solid pace of employment growth.
Fed Chair Powell made no comment on the economy or monetary policy in his remarks on Tuesday ahead of important congressional testimony on Wednesday. The dollar continued to draw support from reduced expectations of aggressive Federal Reserve interest rate cuts with the US currency making headway against commodity currencies.
Philadelphia Fed President Harker stated that there was no need for interest rate changes, although slowing global growth and uncertainty over trade policies have created clear risks to the no change outlook. Atlanta head Bostic stated that the Fed was debating the merits of running a ‘hot’ labour market which maintained underlying uncertainty.
ECB Chief Economist Lane stated that the bank has the tools it needs to keep inflation on track towards its goal of just under 2.0%, although he also commented that it was not its job to keep markets happy.
Very narrow ranges prevailed with the dollar maintaining a firm tone at 3-week highs while EUR/USD found some support below 1.1200. There was little change on Wednesday with EUR/USD only just above 1.1200 amid a firm dollar and lack of yield support for the single currency. Volatility is likely to increase following Powell’s comments in New York.