Relevance up to 09:00 2022-06-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Details of the economic calendar from June 9
The European Central Bank (ECB) expectedly kept the base interest rate at the same level. The ECB also said that it intends to raise the rate in July. This became the main topic during the meeting as this will be the first time the regulator will raise the rate since 2011. It is expected that the regulator will raise the rate by 0.25%.
The market reaction to this announcement was not so rosy. Perhaps investors were expecting a stronger rate hike.
The main theses of the ECB:
The ECB, as expected, kept the base rate at zero, and the deposit rate at minus 0.5%.
The ECB will end the asset purchase programme (APP) on 1 July.
The ECB intends to raise its base rate by 0.25% in July.
The ECB forecasts eurozone GDP growth of 2.8% in 2022, 2.1% in 2023 and 2.1% in 2024.
The ECB intends to gradually raise the base rate after September.
The ECB forecasts eurozone inflation at 6.8% in 2022, 3.5% in 2023 and 2.1% in 2024.
The ECB plans a second rate hike in September, the pace of its rise will depend on inflation.
At the same time as the press conference, data on jobless claims in the United States was released which recorded an increase in the overall rate.
This is a negative factor for the US labor market, but in connection with the comments of the ECB that coincided at that time, the dollar did not react in any way to the negative on the applications.
The volume of continuing claims for benefits decreased slightly from 1.309 million to 1.306 million.
The volume of initial claims for benefits increased from 202,000 to 229,000.
Analysis of trading charts from June 9
The EURUSD currency pair has covered more than 120 points during an intense downward momentum. This movement led to the breakdown of the lower border of the side channel 1.0636/1.0800. Based on the behavior of the price, we can state the fact of speculation in this period of time.
The GBPUSD currency pair rushed down through a positive correlation with the European currency. This led to another convergence of the price with the lower border of the side channel 1.2450/1.2500.
Economic calendar for June 10
Today, the focus will be on inflation data in the United States, where it is predicted that the consumer price index will remain at the same level—8.3%. In some ways, this is a positive signal that indicates a slowdown in the rate of inflation. The US dollar is likely to receive a local incentive to strengthen.
Inflation in the USA - 12:30 UTC
Trading plan for EUR/USD on June 10
The technical pullback is still relevant in the market due to the local overheating of short positions in the euro. This movement can temporarily return the quote to the boundaries of the previously passed flat.
The next downward movement is expected in the market after holding the price below 1.0600. This move will lead to a gradual recovery of dollar positions relative to the recent corrective move.
Trading plan for GBP/USD on June 10
The price movement within the flat is still relevant in the market, so another price rebound from its lower border cannot be ruled out. As the main strategy, traders consider the tactics of breaking through one or another frame of the established range.
Trading recommendations are based on the breakdown tactics:
Buy positions on the currency pair are taken into account after holding the price above the value of 1.2600 in a four-hour period with the prospect of a move to 1.2660-1.2720.
Sell positions should be considered after holding the price below 1.2450 in a four-hour period with the prospect of a move to 1.2350-1.230.
What is reflected in the trading charts?
A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices.
Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.
Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.
The up/down arrows are the reference points of the possible price direction in the future.