Traders are taking risks so far today!
How will the next data releases and trading sessions affect EUR/USD’s consolidation on the 4-hour chart?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s symmetrical triangle while the U.S. markets go on a holiday. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
NZ new dwellings drop by 8.5% in April after 6.2% uptick in March
Japan’s jobless rate falls by 2.5% in April vs. 2.6% expected
Japan’s industrial production down by 1.3% in April vs. -0.1% expected, 0.3% previous
NZ ANZ business confidence fell 14 points from -42.0 to -55.6 in May
AU building approvals dip by 2.4% after 19.2% drop in March
China’s manufacturing PMI improves from 47.4 to 49.6 as COVID curbs ease
China’s non-manufacturing PMI shoots up from 41.9 to 47.8 in May
Switzerland’s annual retail sales disappoint with 6.0% drop vs. 1.4% decrease expected
EU agrees to ban two-thirds of Russian oil imports
Biden to discuss inflation with Fed Chairman Powell
Asian stocks perk up as China hopes overshadow inflation fears
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.K.’s mortgage approvals and individual lending at 8:30 am GMT
Eurozone’s flash CPI estimate at 9:00 am GMT
Canada’s monthly GDP at 12:30 pm GMT
U.S. CB consumer confidence at 2:00 pm GMT
AU AIG manufacturing index at 10:30 pm GMT
AU quarterly GDP at 1:30 am GMT (June 1)
China Caixin manufacturing PMI at 1:45 am GMT (June 1)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/USD
EUR/USD has done a good job of maintaining its gains after finding support at 1.0350 two weeks ago.
However, the pair is now having trouble making new highs as it knocks on the 1.0800 previous area of interest. Heck, EUR/USD is locked inside a rising wedge pattern on the 4-hour chart!
Let’s see if EUR/USD breaks out of its consolidation today.
The Eurozone is printing its flash CPI report. If it comes in faster than the 7.8% increase that markets are expecting, then more EUR bulls could price in an ECB rate hike as early as July.
Meanwhile, risk-taking from the Asian session could spill over to the European and U.S. sessions.
Unless we see catalysts that turn the spotlight back to inflation and global growth concerns, then EUR/USD may revisit its monthly highs.
Don’t discount a downside breakout just yet!
Remember that the EU had just agreed to banning most of Russia’s oil imports. Any retaliation from Russia would mean a longer wait for a resolution and a longer period of uncertainty in the markets.
This could drag EUR/USD down from its consolidation and probably dip to the 200 SMA zone near 1.0550.
