The involvement of the ECB in today’s monetary policy decision means we have to look at the EUR pairs!
What do you think of EUR/CHF approaching a major resistance area?
Before we go any further, ICYMI, yesterday’s watchlist looked at NZD/USD hitting range resistance ahead of the FOMC decision. Be sure to check if it’s still a good game!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
Producer prices in the United States For May: -0.3% m/m (0.1% m/m expected; 0.2% m/m previously); Core PPI came in at 0.2% m/m (0.1% m/m expected; 0.2% m/m previously)
The Federal Open Market Committee kept the federal funds rate range at 5% to 5.25%. by a unanimous vote, but more tightening (possibly two more increases) is needed; No member indicated a cut in 2023
Environmental Impact Assessment: US crude oil stocks It jumped by 7.9 million barrels instead of declining by 510,000 barrels as expected in the week ending June 9.
New Zealand is now technically in a recession With GDP printing -0.1% qoq in the first quarter of 2023 after declining by 0.7% in the fourth quarter of 2022
Japan exports They rose 0.6% year-on-year in May, the slowest pace since February 2021, while imports fell 9.9% year-on-year, thanks in part to lower fuel prices.
Basic machinery orders in Japan It rose 5.5% month over month in April, the first increase in three months. On a yearly basis, core orders decreased by 5.9% (vs -8.0% expected).
Melbourne Institute: Inflation Expectations Unchanged at 5.2% in June, wages are expected to grow 1.6% over the next 12 months.
Unemployment rate in Australia Decreased from 3.7% to 3.6%, Net Employment +75.9K (vs. 18.6K expected, -4.0K prior) due to increased vacancies and higher demand for skilled labor
Data dump in China Show in general a picture of the refrigeration economy:
- Industrial production It slowed from 5.6% yoy in April to 3.5% yoy in May
- retail Up 12.7% YoY in May, lower than expected 13.6% and April growth of 18.4%
- Fixed asset investment From 4.7% to 4.0% in the first five months compared to last year
- Unemployment rate remained at 5.2%
Switzerland has product and import prices -0.3% vs +0.2% MoM
The State Secretariat for Economic Affairs said Consumer prices in Switzerland It will rise 2.3% this year, down from a rate of 2.8% in 2022
Price action news
Japan did not release high profile economic reports today, but the Japanese Yen was one of the biggest (if not the biggest) drivers of the major currencies today.
The decline in the Japanese yen began almost as soon as traders in the Asian session had a chance to price in the Fed’s rate hike and members’ more hawkish-than-expected expectations on the expected direction of monetary policy.
It is likely that the strength of the USD/JPY pair drove most of the yen pairs but the counter-move in the JPY was wide-ranging.
The Japanese yen fell in general, recording the biggest losses against the Australian dollar, the New Zealand dollar, and the British pound.
ECB policy decision at 12:15pm GMT
US retail sales data at 12:30pm GMT
US Initial Jobless Claims at 12:30pm GMT
Manufacturing index in the US at 12:30 pm GMT
US Philly Fed Manufacturing Index at 12:30pm GMT
ECB pressure at 12:45pm GMT
US Industrial Production at 1:15pm GMT
BusinessNZ Manufacturing Index at 10:30pm GMT
BoJ policy decision made during the Asian session (Jun 16)
Chinese data dump at 2:00 AM GMT (June 15)
Use our new file Currency heat map To quickly see a visual overview of the forex market price movement! 🔥 🗺️
EUR/CHF 15 minute forex Planned by TV
The European Central Bank is about to print its June monetary policy decision!
In case you missed ECB Event Trading GuideYou should know that the markets are expecting President Lagarde and her gang to raise interest rates by another 25 basis points to 4.00%.
What may provide additional volatility for the EUR is the convincingness of ECB members in anticipating a hawkish bias when the data releases an area that is already pointing to economic vulnerabilities.
If traders ignore the threats to raise interest rates again, the euro could lose some of its weekly gains.
EUR/CHF, which is knocking the June resistance and R2 (9790) standard pivot points today, may turn lower.
Depending on how much downside the Euro sees after the ECB decision, I am looking to target R1 (9780) for pivot points today if not the previous inflection point 0.9760.