US Dollar, EUR/USD, ECB, Fed, BoE, BoJ, Kanda, AUD/USD, Oil, Gold – Talking Points
- The American dollar may see some volatility with the star-studded cast for today
- At the ECB conclave, key representatives from the BoE, BoJ, ECB and Fed will speak on a joint panel
- Not all central bankers swim in the same direction. The comments will move EUR/USD?
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The US dollar appears poised ahead of the European Central Bank’s (ECB) Central Banking Forum on Wednesday.
The policy panel discussion at the Sintra event in Portugal will include all the heavy hitters – Andrew Bailey, Governor, Bank of England, Christine Lagarde, President of the European Central Bank, Jerome Powell, Chairman of the Federal Reserve Board of Governors and Kazuo. Ueda, Governor, Bank of Japan.
Comments coming out of the gathering will be carefully scrutinized to see if they apply Monetary Policy agendas.
Ahead of the meeting, Mr Bailey, Ms Lagarde and Mr Powell reiterated their hawkish view. Mr. Ueda and the Bank of Japan have different views as they maintain a very relaxed setting.
Earlier today, Masato Kanda, Japan’s deputy finance minister for international affairs, said the authorities would react if there were excessive exchange rate movements. USD/JPY dropped below 144 on comments but has since stabilized.
Australian Monthly CPI was a notable miss and the Australian dollar collapsed as a result. The annual CPI indicator for May was 5.6% instead of the expected 6.1% and against 6.8% previously.
The ASX 200 shares climbed over 1% on hopes that the RBA will suspend its tightening regime at its meeting next Tuesday. Major Japanese indexes were also higher following the positive Wall Street management after US economic data sold off overnight.
China’s CSI 300 and Hong Kong’s Hang Seng Index (HSI) were slightly weaker as concerns about their economic recovery persist after industrial earnings data remained muted in May.
Treasury yields were mostly unchanged on Wednesday after adding several basis points across most of the curve in the North American session.
Honey is fighting to hold as it remains near its three-month low around $1,920.
Petroleum settled down after rolling through the night. The WTI futures contract is back above $68 a barrel, while the Brent contract is trying to regain $73 a barrel. Current prices for these markets can be found here.
Apart from the ECB panel discussion, the economic calendar is mostly secondary data. You can view the entire economic calendar here.
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How to trade EUR/USD
EUR/USD TECHNICAL ANALYSIS
euros/American dollar it remains in a six-week range of 1.0516-1.1096 after failing to meaningfully challenge the upside last week.
The rise above barely eclipsed 78.6% Fibonacci retracement moving from 1.1096 down to 1.0635 to 1.0997 when it peaked at 1.1012. These levels may continue to offer resistance ahead of a number of potential resistance levels in the 1.1076 – 1.1096 area.
Nearby support could be at the recent low of 1.0844, which is just above the 1.0831 breakout point.
Furthermore, there are a number of disadvantages Fibonacci retracement move levels from 1.0635 to 1.1012 that could provide support. The 50% retracement level is at 1.0824, 61.8% is at 1.0779 and 78.6% is at 1.0716.
The late May low of 1.0635 was just a fraction below 78.6% Fibonacci retracement move from 1.0516 to 1.1096 to 1.0640. This could make the 1.0635-40 area a possible area of support ahead of the previous lows at 1.0525, 1.0516, 1.0483 and 1.0443.
— Written by Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @DanMcCarthyFX on Twitter