Forex Signals Brief for June 4: Eurozone CPI in Focus
Rowan Crosby • 2 min read
It has been a busy day on markets to get the week started, with the risk-off feel certainly still present.
We saw big moves in GOLD and weakness in the SPX as risk assets still remain under pressure.
As we move into the European open, the main data point of the day will be Eurozone CPI. This is a bit of a prelude to the ECB interest rate decision which is due out on Thursday but is unlikely to see any significant changes being made. That said ECB President Mario Draghi would certainly like to see the inflation rate tick above the expectation of 1.3% YoY.
There is also an event that is happening later today that will be well worth watching that will impact the AUD/USD. Given the events of the day and the RBA interest rate decision, Governor Lowe is scheduled to speak at 0930GMT. at the RBA Board Dinner with the business community. This might well give us some further monetary policy guidance and might very well have a big impact on the Aussie.
During the European session, we will also get Construction PMI from the UK which is likely to impact the GBP/USD.
Forex Signal Update
The FX Leaders Team finished with 4 wins from 5 signals in a strong start to the week.
Gold – Active Signal
GOLD has seen a really strong rally as tensions remain high and risk-off dominates. However, given how vertical price has moved, we are looking at a bit of a fade trade here and a potential reversion back towards 1300.
GBP/USD – Active Signal
The GBP/USD signal has played out for us quite well so far and the little bounce off key support has taken shape nicely. We are moving very close to our take profit target so let’s hope this one can hit at the start of the European session.
BTC has been absolutely smashed this morning and is now back around the $8,000 level in what is very bearish looking price action.
After price spiked into $8,000 in a mini-crash a few weeks ago, the quick snap back looked like it might give the bulls some hope. But it appears resistance is a bit too strong. There are also reports of volume significantly increasing in the last 24-hours which is another bearish indicator for us.
For now, all that matters is how price responds at the $8,000 level. If there is no rebound and price consolidates below that level, then that could be a big signal that the bull run is well and truly over.