Thread: Daily Market Analysis from ForexMart

EUR/USD. June 11, 2020 – Euro weakly declining from 1.14

The EUR/USD pair is consolidating at 1.14. The dollar was supported by the results of the meeting of the Federal Reserve, according to which the regulator kept the rate in the target range of 0-0.25% per annum and gave fairly clear signals about maintaining full-scale stimulation for as long as required.

At the same time, the Fed shared forecasts for US GDP: experts expect a contraction of the economy by 6.5% this year, and the unemployment rate may reach 9.3%, rather than 3.5%, as previously expected. However, these data did not exert any visible pressure on the exchange rate of the American currency.

Today, you should pay attention to the producer price index in the US for May and the number of initial applications for unemployment benefits. Experts predict a gradual decrease in the number of calls – both primary and repeated. If these forecasts are confirmed, then it will be possible to speak not about improving the situation, but at least about the beginning of stabilization in the American labor market. And this can provide significant support to the dollar.

EUR/USD. June 15, 2020 – Euro moves away from highs

The euro remains under pressure after falling to 1.12 at the end of last week. The current quotation of the EUR/USD pair is 1.1240. Today, the macroeconomic calendar is almost empty, the main events of the United States and the eurozone will be held later this week.

Today, attention should be paid only to inflation data in Italy: consumer prices in the country in May fell by 0.2% after a zero change in April. This suggests that the third eurozone economy has already faced deflation, which could push the ECB to further soften the parameters of its monetary policy.

The dollar was supported by data on consumer confidence from the University of Michigan: the index rose in June to 78.9 points against the May mark of 72.3. The restoration of the indicator signals that the «bottom» of consumer sentiment has already been passed. However, fears of the second wave of the US epidemic continue to be a risk factor for the US currency.

EUR/USD. June 16, 2020 – Dollar resumes its growth

Yesterday, the EUR/USD pair appreciably strengthened, reaching the level of 1.1350. However, on Tuesday, the euro began to decline to 1.1300. Before the US dollar was under pressure amid a fall in the levels of ten-year government bond yields and a general improvement in investor risk appetite.

However, the decline was replaced by strengthening after the publication of data on business activity in the manufacturing sector of New York in June: the index was -0.2 points against the May value of -48.5. This means that business and production are gradually returning to life.

Today you should pay attention to the statistics block from Europe. Germany and the eurozone will present reports on the business sentiment index from ZEW in June, experts predict a noticeable improvement in both cases. The day will end, most likely, with a weakening dollar after the publication of the report on retail sales: the rate of decline should accelerate from -21.6% to -32.6%.

Fundamental GBP/USD analysis for June 17

Today, the British sterling does not show visible price fluctuations paired with the US dollar, as market participants are still analyzing the released statistics. In particular, the May consumer price index in the country was 0.5% year on year versus the April value of 0.8% y/y. The producer price index in May rose 0.3% mom after a 5.5% decline in April.

Core inflation in the UK was recorded at 1.2% y/y – lower than it was a month earlier, and weaker than expected. At the same time, the retail price index in the country amounted to only 1.0% y/y in May against the April level of 1.5%.

Such dynamics fully corresponds to the conditions when neither business nor consumers are active in the country. Fresh statistics did not reflect either a positive or a clear negative, so the pair GBP/USD will continue to fluctuate near the level of 1.2560 during the day.

GBP/USD. June 18, 2020 – Sterling continues to decline in anticipation of the Bank of England meeting

On Thursday, the GBP/USD pair continues to decline, following the dynamics of yesterday. The current quotation of the pair is 1.2475. The pressure on the sterling was exerted by weak macroeconomic data from the UK: the consumer price index (CPI) in May rose by only 0.5% after rising by 0.8% in April. At the same time, the target level of the Bank of England is at around 2%.

Such a sharp decline in inflation may force the British Central Bank to introduce additional monetary incentives, which will negatively affect the exchange rate of the national currency. Today, a meeting of the Board of the Bank of England will take place, from which market participants expect the interest rate to remain at 0.1% and increase the QE program.

An additional source of pressure on the pound remains uncertainty around Brexit. And if today the regulator decides on a new round of monetary easing, the British currency could fall to the level of 1.2400.

EUR/USD. June 19, 2020 – The euro is growing slightly from the level of 1.12

Yesterday's trading ended with a decrease in the euro to around 1.1180. The dollar rose in price to its main currency competitors amid sales of the euro and the pound, as well as amid growing investor appetite for defensive assets. The probability of the potential occurrence of the second wave of the coronavirus epidemic puts pressure on the entire spectrum of risky assets.

However, today the EU summit took place, during which the head of the European Parliament, David Sassoli, called on the heads of state to approve a plan for the restoration of the EU economy by €750 billion and a draft next seven-year budget for 2021-2027. At the same time, he recognized the presence of many disagreements on important issues and the need for another summit in the future. Such news provided some support to the European currency, and today we will see a weak growth of the euro from the level of 1.12.

EUR/USD. June 22, 2020 – Euro fluctuates slightly near the level of 1.12

The EUR/USD pair continues to trade near the level of 1.12, fluctuating slightly on both sides of it. Today, the macroeconomic calendar is almost empty, so the dynamics of the instrument will not differ in activity.

At the end of last week, market participants drew attention to the speech of US Federal Reserve Chairman J. Powell, who noted that economic recovery would be long and difficult. These comments put pressure on the dollar, which led to the pair growing to the level of 1.1230.

Today, you should pay attention to data on home sales in the US secondary market. The indicator may show growth of 1.6%, which will provide some support to the US dollar. On Thursday, important statistics on the final estimate of GDP will be released: experts predict confirmation of a preliminary estimate of the economic decline by 5%.

EUR/USD. June 23, 2020 – Euro could not overcome the level of 1.13

Yesterday, trading on the euro ended with an increase to the level of 1.1300. The reason for the growth of the EUR/USD pair was made by the statements of the White House economic adviser Larry Kudlow. The politician noted that in the USA there is no second wave of coronavirus diseases, which led to an increase in demand for risky assets.

Today, the eurozone countries have submitted their reports on business activity in the manufacturing sector and the services sector. Eurozone PMI rose from 39.4 to 46.9 points, better than forecast. The index of business activity in Germany also showed growth: from 36.6 points to 44.6, which was higher than analysts' forecasts either. Such figures provided strong support for the European currency.

In the afternoon, the US will publish business activity indexes in the manufacturing sector and services for June. Experts forecast growth from 39.8 to 48.0 points. You should also pay attention to data on new home sales in the USA for May: the forecast assumes an increase from 623 thousand to 640 thousand.

The RSI indicator pushed off the resistance level and turned towards the neutral zone. This signals that the euro is limited by the level of 1.13, and during the day we can expect a corrective decline in the pair to the level of 1.1270.

Brent. June 25, 2020 – Oil declines amid expectations of the second wave of coronavirus in the world

On Thursday, Brent quotes continued to be under pressure, fluctuating slightly at $40 per barrel. Concerns about a new outbreak of the coronavirus infection pandemic have a negative effect on the asset. WHO has announced a significant increase in the number of new diseases in the United States, China and Latin America. As a result, concerns about the slowdown in global economic recovery and lower demand for hydrocarbons returned to the market.

An additional factor in lowering oil prices was also data on changes in US oil reserves. Yesterday, the US Energy Information Administration (EIA) announced a 1.4 million barrels increase in raw material inventories in a week, while experts forecast a decrease of 100 thousand barrels. Stock growth has been observed for the third week in a row.

Today, attention should be paid to data on US GDP and durable goods orders. If statistics support the US dollar, oil will have another factor for further decline.

EUR/USD. June 26, 2020 – Euro is under pressure near the level of 1.12

The European currency continues to remain under pressure paired with the dollar amid growing demand for safe assets. Investors fear the second wave of Covid-19, as more and more new cases of coronavirus infection are recorded in the world. The current quotation of the EUR/USD pair is 1.1225.

Additional pressure on the euro was exerted by reports that the White House administration is considering options to introduce new and increase existing tariffs on imports of products from the European Union and the UK worth $7.5 billion.

At the same time, the US dollar received support from data on the volume of orders for durable goods: the indicator in May showed an increase of 15.8% m/m after a month earlier decline of 17.7% m/m. Today, you should pay attention to the publication of statistics on personal income and expenses of Americans for May.