Trading plan for 30/06/2017:
The US Dollar continues to lose ground against most major currencies. EUR/USD is close to the annual maximum. It is worth noting the sharp reversal of USD/JPY in response to the decline of sentiment in the US. Yesterday's session on Wall Street is clearly down, SP500 fell 0.9%, the NASDAQ Technology fell 1.7 %. In Asia, the weakest index is Nikkei 225 which has shed 1.25%.
On Friday 30th of June, the event calendar is busy with important news releases. Switzerland will release KOF Economic Barometer data, Germany will unveil Unemployment Rate and Unemployment Change data, the UK will present Final GDP, Current Account, and Business Investment data, and the Eurozone will post Flash CPI and Flash Core CPI data. During the US session, the Canada will reveal Gross Domestic Product data and the US will provide Personal Spending and Personal Income data. Moreover, two important US sentiment gauges will be released as well: Chicago Purchasing Manager Index and Revised UoM Consumer Sentiment Index.
EUR/USD analysis for 30/06/2017:
The Unemployment Rate and Change data are scheduled for release at 7:55 am GMT and market participants expect no change in the number of individuals in the labor force who are without a job but actively seeking one (5.7%) and in the number of unemployed people during the previous month (-10k). Another set of good data is expected from the German job market, which comes as no surprise after very high and positive sentiment readings that are currently dominating the economic performance of the Eurozone's most wealthy nation. The figures better than expected (lower rate and change) will only lift the Euro even higher across the board.
On the other hand, the Eurozone Flash CPI data, that is scheduled for release at 09:00 am GMT, might cast a shadow on the overall positive mood in the Eurozone. Market participants are expecting a tick up in the core inflation from 0.9% to 1.0% on a yearly basis and a downtick in CPI from 1.4% to 1.2%. The inflation is stubbornly below the ECB target of 2.0% and it does not look as it wants to skyrocket higher despite the ECB monetary policy. Any numbers worse than expected might very soon cause a corrective pullback in the Euro-related pairs, but market participants will need something more significant to change overall positive sentiment towards the Euro these days.
Let's now take a look at the EUR/USD technical picture on the H1 time frame. The market conditions are now overbought and multiple bearish divergences can be seen on this time frame. In a case of a worse than expected data, the price might very quickly test the technical support at the level of 1.1386 or even 1.1295. On the other hand, any price move above the 1.1444 level will be considered overstretched and prone for correction.
GBP/USD analysis for 30/06/2017:
The Final GDP and Current Account data from the UK are scheduled for release at 08:30 am GMT and market participants foresee unchanged GDP figures at the level of 0.2% in the first quarter and the Current Account gap is expected to widen from -12.1Bln to -17.2Bln Pounds. The lack of an economic progress in the UK after the Brexit vote, recent political turmoil and prospects of a "hard Brexit" worsen the economic performance. The 0.2% increase in the GDP is surely not enough to be considered as a quality performance, so any talks and speculations regarding the possible change in the monetary policy might very soon get confronted with hard economic data. Currently, any GDP figures worse than expected might quickly start a reverse in positive sentiment towards the British Pound and cause a sell-off.
Let's now take a look at the GBP/USD technical picture on the H4 time frame. The Bulls have managed to push the pair towards the level of 1.3000 after somehow hawkish comments from Bank of England Governor Mark Carney, but the market is still trading below the key resistance at the level of 1.3047. The overbought market conditions are indicating a possible corrective pullback, but no divergence is present at the moment. The next technical support is seen at the level of 1.2978.
