Last week ended with mixed data as the U.S. equity indices ended with DJIA at 0.5% gain, S&P at 0.1% gain, and the Nasdaq lost at 0.9% due to the continued selling pressure on tech stocks… In the U.S. front, Federal Reserve went ahead and hiked rates as expected with chair Yellen stressing the confidence over recent inflation readings and vowed to continue the current normalization process, which in normal speak means more rate hikes are coming.
In UK, the BOE’s MPC members surprise change of heart with 3 members voting for rate hikes following recent 2.9% CPI reading is a bit unnerving for the market. As of now, traders are pondering whether or not to start buying the GBP as this maybe a potential turning point, if there aren’t so many issues going on with UK at the present moment.
Crude oil prices continue to remain stable as both OPEC and the IEA are gauging their supplies to match demand in efforts to maintain prices. The week ended with a bit of mixed trading as traders react to various geopolitical incidents across the globe. BOE decided to keep rates unchanged, BOJ also kept the current rate at -0.1%, SNB again reaffirmed rates at -0.75%, and the Federal Reserve hiked rates to 1.25% as expected.
EURUSD; Euro has been under a bit of selling pressure as last ECB meeting provided no support for the combined currency. With the ECB stating that they could very well ease further if warranted, despite of current optimism, traders are definitely taking the cautious approach to the Euro. I would be interested in buying on dip, preferably around the 1.1100 level as the current sell-off may be a bit overdone in my opinion. The long-term view for the Euro is still long and unchanged.
GBPUSD: I would be looking to BUY on dip, especially following the CPI reading (2.9%) and the MPC vote count. It is clear that there are inflationary pressure in UK, and as soon as there are positive news on Brexit, we should see GBP gain.
USDJPY: Seeing a bit of strength last week due to risk aversion sentiment. BOJ didn’t provide any reason to trade one way or the other, but presently market is likely to continue improve, thus the long-term is to BUY USDJPY on dip, especially if we see it drops below the 109.30 area.
USDCHF: Staying out as usual.
AUDUSD: I’d be interested in BUYING on dip, especially if the pair would drop towards the 0.7500 level. I know it may take a while but the average range for this pair is very tight, so unless we see a decent drop, it’s probably best just to steer clear.
NZDUSD: I’d stay out and wait until the RBNZ Rate Decision then focus on the official statement. If RBNZ is positive over the current economic situation, I would be interested in going LONG. If RBNZ is more or less the same as last meeting, then it is probably the best just stay out as even RBNZ themselves aren’t sure what’s going on.
Please pay attention to news events scheduled this week. Happy Trading!
Forex Weekly Outlook June 19 ~ 23, 2017
June 19, 2017 by 1 Comment