Forex Signals Brief For 19th – 25th June, 6 Important Economic Events To Watch This Week
Arslan Butt • 4 min read
Following a great week with 4 major central banks' policy decisions and a huge round of volatility in the market, our forex trading signals did very well. The Fed Rate Hike helped the buck gain some support. The Federal Reserve will continue to manipulate the forex world, due to many speeches ahead, particularly those from the top officials of the US central bank.
This week, I'm expecting weaker volatility and thin trading volume compared to the previous week's due to a lack of significant economic events. Let's discuss which economic events are worth monitoring.
- Brexit – The Brexit negotiations between the United Kingdom and the European Union are due to begin on June 19th. Following the results of the UK General Elections, the government doesn't have a very strong stance, as the conservative and labor party are likely to collaborate on negotiations. They are supposed to talk about a clean exit from the European Union while retaining access to the FTA (Free Trade Agreement) in order to trade outside the single market. The sterling is likely to stay vulnerable until the talks show a clear direction.
- FOMC’s Dudley Speak – The New York Fed President Bill Dudley is due to speak at the North Country Chamber of Commerce, in Plattsburgh on Monday at 12:00 (GMT). He is an official who often keeps a dovish stance, therefore, any hawkish comment will underpin the dollar.
- FOMC’s Fischer Speak – The Governor of the Fed, Fischer, is due to speak at the Riksbank macroprudential conference in Amsterdam on Tuesday at 12:00 (GMT). In contrast to Dudley, Fischer is considered an official who often keeps a hawkish stance, therefore, any dovish remarks are likely to hurt the bullish sentiment of the dollar.
- US Existing Home Sales – The figures are due on Wednesday, June 21st at 14:00. Though they are expected to drop a bit, I'm more concerned to see if the surprisingly weaker inflation (released over the previous week), translates into the existing home sales figures.
- RBNZ Monetary Policy – The RBNZ Rate Statement and Official Cash Rate are due to be released on Thursday, June 22nd at 20:00 and 21:00 (GMT) respectively. Overall, New Zealand's economic figures have been favorable causing investors to trade it with a hawkish policy sentiment. Having said that, the RBNZ is expected to tighten monetary policy. Failure to do so will result in a weaker New Zealand Dollar.
- US Jobless Claims & Crude Oil Inventories – These two major events are always worth watching. They are released every week and have the potential to produce volatility in the market.
EUR/USD – Triple Top Pattern
The Euro, single currency, is trading slightly on the downside against the Buck, followed by two consecutive weekly drops. This was highly anticipated upon the release of the FED Rate Hike decision.
This week, we don't have high impact economic events from the Eurozone, but the medium impact macroeconomic events can have a mild impact on the market. I'm referring to the Manufacturing & Services PMI's from the German & France on Friday, June 23rd.
USD/JPY – Daily Chart
Technically, the pair is rangebound and trading with an unclear bias. It's consolidating in a trading range of $1.1100 – $1.1285. The moving averages support the bullish bias, but the momentum indicators are neutral. Tthe triple top resistance around 1.1285 is a big plus for sellers.
Lastly, the formation of a weekly spinning top candlestick is catching my attention. Don't forget, it's followed by a massive bullish trend, so is it signaling a reversal? Only time and the upcoming fundamentals will determine.
EURUSD – Key Trading Levels
Forex Trading Signal
Traders, we need to keep a close eye on $1.1207 in order to determine the bullish vs. bearish market. I'm looking to add buying above $1.1210, aiming at $1.1260 and $1.1285. Below this level, I recommend staying in sell with a target of $1.1160 and $1.1035.
USD/JPY – Safe Haven Demand Fades
The Japanese Yen remained stronger against the US dollar but dipped lower, ending the week higher. This was due to the Fed interest rate hike as well as the neutral BOJ policy statement.
This week, we need to wait and see the Japanese trade balance, monetary policy minutes and the flash manufacturing PMI. Frankly, these events are not market movers. However, the events discussed above from the US side definitely have the potential to make a difference.
Besides, the ongoing geopolitical tensions, such as Trump, North Korea, the Brexit talks, any update from the Middle East may impact the safe haven currency.
USD/JPY – Daily Chart
Technically, on the daily chart, the pair is holding right below 50-periods EMA which is extending a solid resistance at $111.200. On the same page, we can see that the bullish momentum was initiated with a bullish Marubozu, which is signaling investor's strong buying intentions.
The RSI isn't all together bullish or bearish, rather, it's nearly neutra. This is possibly because most of the investors are looking for additional fundamentals to decide if it's worth to break above the 50 – periods EMA. The nearest support can be found at $110.650.
USDJPY – Key Trading Levels
Forex Trading Signal – Idea
This week, $110.50 is a crucial trading level. We need to stay in buying above this level, in order to target $111.300 & $112. On the other hand, sell positions are recommended below $110.500 with a target of $110.050 and $109.560.
This week, investors are likely to trade the echoes from the FED Interest Rate Hike & FOMC meeting minutes in order to support the US dollar. Additionally, speeches from the FED officials will be in focus this week. Keep following us for live market updates and forex trading signals this week.