Forex Signals Brief for May 31st – Chief Story – Is It a Euro Day? - Forex News by FX Leaders

Forex Signals Brief for May 31st – Chief Story – Is It a Euro Day?

Posted Wednesday, May 31, 2017 by
Arslan Butt • 4 min read

It's been a good week so far as we remained on a positive side in each of our forex trading signals. The fluctuations in the market are not that strong, as investors are staying out of the market before the release of big news. Yes, I'm talking about the U.S Non-farm employment change and Unemployment Rate which are scheduled to be released on Friday.

Yet, the U.S dollar traded mixed despite the solid probability of another Fed interest rate hike in the month of June. However, the chief market mover isn't the Dollar, but the Euro. It has maintained a solid trading range, Anyways we will talk about it the next section, but prior to this, let's have a look at major economic events for the day.

Top Economic Events To Watch Today

AUD

  • Private Sector Credit m/m (1:30)
  • AIG Manufacturing Index (23:30)

JPY

  • Housing Starts y/y (5:00)
  • Capital Spending q/y  (23:50)

EUR

  • German Retail Sales m/m   (6:00)
  • French Prelim CPI m/m   (6:45)
  • German Unemployment Change (7:55)
  • Italian Monthly Unemployment Rate  (8:00)
  • Net Lending to Individuals m/m    (8:30)
  • CPI Flash Estimate y/y  (9:00)
  • Core CPI Flash Estimate y/y (9:00)
  • Italian Prelim CPI m/m  (9:00)
  • Unemployment Rate (9:00)

USD

  • FOMC Member Kaplan Speaks  (12:00)
  • Chicago PMI   (13:45)
  • Pending Home Sales m/m  (14:00)
  • Beige Book  (18:00)

GBP

  • M4 Money Supply m/m (8:30)
  • Mortgage Approvals (8:30)

CAD

  • GDP m/m  (12:30)

EUR/USD – Bulls Dominated Currency Pair

The Euro fell to place a low of $1.1108 but missed our expected target suggested in our Forex Signals Brief for May 30th. The single currency Euro pulled lower due to two chief developments:

First – The remarks of ECB's President Mario Draghi to the European Union Parliament on Monday regarding the probabilities for an early Italian election.

Secondly – Mario Draghi tempered the expectations for an expansionary policy ahead of the upcoming meeting and weaken the single currency by demonstrating a softer inflation in the Eurozone. Moreover, the ECB still requires ample stimulus to underpin the subdued inflation.

We have several economic events above board, especially from the Eurozone which may offer us a huge round of volatility in the European session.

Forex Trading Signal – Idea

Today, I'm looking at the $1.1190 trading level, as we can try a sell position below this level. In addition to this, the breakage of $1.1160 is likely to add additional sellers in the market.

EURUSD - Descending Trend-line On Hourly ChartEURUSD – Descending Trend-line On Hourly Chart

Technical Outlook – Intraday

The EUR/USD hasn't changed a lot since the previous trading day, but one noticeable thing is the bearish trend line which is formed on the 4- hours chart.

The descending trendline is extending a strong resistance at $1.1195, whereas, the pair has formed several pin bar candlesticks below the resistance area. It demonstrates the selling sentiment of the investors.

The pattern is sort of a descending triangle, which is showing a tug of war between bulls and bears. At the moment, we have to wait for the market to break out and unveil the trend.

Support     Resistance

1.1137        1.1245

1.1094       1.131

1.1029       1.1353

USD/JPY – Range-Bound Currency Pair

Likewise, the USD/JPY has also traded in a narrow trading range, proving to be a chicken feed as the Investors are feeling shy to enter any major trade before the U.S labor market figures on Friday.

In the early Asian session today, the Japanese economy just released the Preliminary Japanese Industrial which showed a gain of 4% in the month of April, followed by a 1.9% drop in the previous month. However, the outcome came with a muted impact as it's below the expectation of 4.2%.

Forex Trading Signal – Idea

The previous trade idea went really well and traded in line with our predictions in Forex Signals Brief for May 30th. For now, there are two rough trading ideas in my mind.

Firstly, we need to keep an eye on $111.399 for Selling as the market has a potential to show reversal below this area.

Secondly, the $110.650 can be a good buying level for the day. Anyways, wait for our forex trading signals, as we may share it during the New York session.

USDJPY - 61.8% Retracement In 4 Hour ChartUSDJPY – 61.8% Retracement In 4 Hour Chart

Technical Outlook – Intraday

Most of the technical tools are signaling a bearish sentiment of investors. Such as looking at the 4- hour chart, the USD/JPY is trading below a 50- periods moving average which is extending it a strong resistance at $111.375. The prices below moving average reveal that investors are more interested in keeping the USD/JPY in selling.

Moreover, the pair has also completed 61.8% Fibonacci retracement at $110.450 and the breakage below this level is probable to add further room for selling until $110.050.

Support     Resistance

110.74        111.400

110.16        111.950

109.47       112.350

Ending Remarks

We are experiencing thin trading volumes in the wake of Non-farm payroll and unemployment rates from the United States, but today, the Eurozone has a lot to offer us in the throughout the European sessions. Get seated and wait for our further live market updates for exciting trade ideas.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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