Forex Signals Brief for June 22nd – Bulls Vs. Bears, A Shifting Sentiment
Arslan Butt • 3 min read
Yesterday, the dollar index traded mixed despite the optimistic fundamentals from the United States. This was because most of the investors felt uncertain about the unexpectedly positive existing US homes figures. The US existing home sales surged from 5.56M to 5.62M, which is higher than the predicted 5.54M.
Additionally, the investors switched their interests to the sterling after Queen Elizabeth delivered a Brexit-focused speech. In her speech, Queen Elizabeth outlined 8 bills that lawmakers should concentrate on in order to ensure a smooth Brexit. She also stressed the need for an immigration law that would be one of the key features of Brexit.
Today, investors are recommended to focus on the following fundamentals. The Core Retail Sales from Canada & Unemployment Claims from the United States seem to be the most important on the list.
- Core Retail Sales m/m & Retail Sales m/m are due to be released at 12:30 (GMT) with a forecast of 0.6% and 0.3% respectively. However, the Core Retail Sales are expected to be significantly higher than the previous figure of -0.2%. The lower figure is likely to strengthen the Loonie but the Retails Sales figure is expected to drop from 0.7% to 0.3%.
- US Unemployment Claims is expected to be released at 12:30 (GMT) with a minor gain of 241K from 237K. Any significant change will definitely shake the US dollar.
- US FOMC Member Powell is scheduled to testify about economic growth before the US Senate Committee on Banking, Housing, and Urban Affairs, in Washington DC at 14:00 (GMT). We can expect volatility during his speech.
- UK MPC Member Forbes is due to speak at the London Business School at 18:00 (GMT). Seeing as he is a voter of the BOE (Bank of England) interest rate, his remarks are worth paying attention to.
EUR/USD – The Choppy Trader
Yesterday, the EUR/USD gained support near $1.1120 during the US session. The market kept on consolidating due to a notable lack of new economic events during the day.
We had no significant Eurozone data releases as well as no remarks from ECB officials to extend another bullish or bearish push to the market.
Once again, the market is likely to trade in a boring sideways trend, with no trendy trade opportunity. Let's take a look at the trade setup below. For a better understanding of EUR/USD, refer to the article here.
Forex Trading Signal – Idea
Today the central point is $1.1160, which is likely to define the bullish or bearish trend. Investors are recommended to buy only above 1.1160 with minor stops below it and take profit above at $1.1190.
EUR/USD – Hourly Chart
Technical Outlook – Intraday
I can see a slight shift in the technical outlook but in lower timeframes. For instance, looking at the hourly chart, we can observe a bullish crossover in the 20 & 50 periods moving averages. This crossover signifies the beginning of a bullish trend. For more about moving average trading strategy, refer to the article here.
As we can't base our decisions on a single technical friend, let's refer to the leading indicators on the same timeframe. The RSI and Stochastic are bullish above 50, supporting a bullish trend in the EUR/USD.
Lastly, the pair has crossed and closed above a major resistance level of $1.1160, which is now working as a support level. Let's wait for the US fundamentals to see which side investors choose.
Investors are likely to trade the dollar with a bullish bias during the European & US trading sessions before the release of macroeconomic events from the United States. Additionally, we need to monitor the Canadian Retail Sales and Core Retail Sales m/m as they could provide us with a reason to enter the thinly volatile market.