Today, the market began with a great start because our forex trading signal on the Nikkei finally managed to close at take profit, helping us pocket green pips in the early Asian sessions.

This week's two chief economic events, the European Central Bank (ECB) meeting, and the national elections in the United Kingdom have drawn investors' attention. These events have been impacting the market since the beginning of the week and the market has been feeling the echoes of uncertainty caused by UK snap elections. The wait is over and now that the big day has finally come we can expect some action.

Let's look at the major economic events and I will be sharing my stance on both of these key drivers, along with their potential impact on the market.

Top Economic Events To Watch Today

CHF    

• CPI m/m (7:15)

GBP    

• Parliamentary Elections (All Day)

EUR    

• Minimum Bid Rate (11:45)
• ECB Press Conference (12:30)

CAD    

• NHPI m/m (12:30)
• BOC Gov Poloz Speaks (15:15)

USD    

• Unemployment Claims (12:30)

EUR/USD – ECB Policy Meeting Ahead

On Wednesday, in the early New York trading session, the single currency Euro took a tumble against the greenback for more than 70 pips, from the $1.1275 level to a session's low of $1.1204.

The drop in the EUR/USD came as a total surprise. A news update by the Bloomberg said, "ECB’s draft projections now show consumer-price growth at roughly 1.5% each year in 2017, 2018 and 2019. The previous projections in March showed rates of 1.7%, 1.6%, and 1.7%, respectively."

This update clearly extends bearish signals to investors. For instance, a drop in inflation projection clearly demonstrates that the ECB has failed to achieve its goals.

In my opinion, the drop in inflation never comes alone, but with high unemployment rates, lower GDP and dovish monetary policy. Here's a point, the investors are now expecting a dovish policy action from the ECB today.

Forex Trading Signal – Idea

The market precisely moved as per the plan outlined in our Forex Signals Brief for June 7th.  Today, I'm aiming to stick with the same plan of having a sell trade, only below $1.1280 in order to aim at the $1.1240, while risking until $1.1300.

Hourly Chart EUR/USD – Ascending Triangle Fake Out 

Technical Outlook – Intraday

We have a fundamental breakout in an ascending triangle pattern in EUR/USD, which can be seen on the hourly chart. The pattern was providing a significant support at $1.1250, along with a resistance at $1.1280.

EUR/USD broke out of the ascending triangle, but it was a fake-out, rather than a breakout. Thus, the fresh support prevails at $1.1220, whereas, the resistance is the same $1.1280.

Lastly, the momentum indicators are confused with the RSI consolidating above and below 50, demonstrating traders' indecision.

GBP/USD – Most Focused Currency Pair

Interestingly, the cable has stuck in the trading range of $1.2750 – $1.3035 and it trades with a modest upside bias since the beginning of the week. Since the UK election is looming today, there is a high probability of a potential breakout.

Theresa May, the UK Prime Minister had called for the snap election in order to take advantage of the apparent weakness of her domestic opponents and strengthen her position in the negotiations with the European Union.  

Forex Trading Signal – Idea

Though it's risky to talk about GBP/USD, let me share a rough blueprint. I'm planning two scenarios:

First – Trading the range, a quick sell below $1.3035 with a minimum stop loss of above $1.3060 and a take profit around $1.2950.

Second – Buying above $1.2765 with a stop loss below $1.2735 and a take profit of $1.2855.

GBP/USD 4- Hours Chart – Sideways Trading Range 

Technical Outlook- Intraday

We can see on the daily chart, the Cable has maintained a wider trading range of $1.2750- $1.3035, which, once broken, is likely to give a new trend to the currency pair.

The current technical tools are recommending a bullish bias of investors, but most of the decision is dependent upon the outcome of the election.

The GBP/USD is facing an immediate resistance at $1.2970, along with a solid support at $1.2910.

Ending Remarks

Here comes a big day, as we have two main economic events; the ECB monetary policy meeting and the UK national elections. Get set and buckle up as these events are going to be a roller coaster. Make sure to follow strict money management practices.