The ECB sharing its monetary policy decision today means we gotta look at EUR pairs!
What do you think of EUR/CHF approaching a key resistance zone?
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/USD hitting a range resistance ahead of the FOMC decision. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. producer prices for May: -0.3% m/m (0.1% m/m forecast; 0.2% m/m previous); Core PPI came in at 0.2% m/m (0.1% m/m forecast; 0.2% m/m previous)
FOMC kept the Fed Funds rate range at 5% to 5.25% with a unanimous vote, but did signal further tightening (maybe two more hikes) still needed; no member signaled a cut in 2023
EIA: U.S. crude oil inventory jumped by 7.9 million barrels instead of falling by 510K barrels as expected in the week to June 9
New Zealand is now technically in a recession with a -0.1% GDP q/q print in Q1 2023 after a 0.7% decline in Q4 2022
Japan’s exports inched 0.6% y/y higher in May, the slowest pace since February 2021, while imports dropped by 9.9% y/y thanks in part to lower fuel prices
Japan’s core machinery orders rose by 5.5% m/m in April, the first increase in three months. On an annualized basis, core orders fell by 5.9% (vs. -8.0% expected)
Melbourne Institute: Inflation expectations unchanged at 5.2% in June, wages are expected to grow by 1.6% over the next 12 months
Australia’s unemployment rate dipped from 3.7% to 3.6%, net employment +75.9K (vs. 18.6K expected, -4.0K previous) on increased vacancies and high demand for skilled labor
China’s data dump generally showed a picture of a cooling economy:
Industrial output slowed from 5.6% y/y in April to 3.5% y/y in May
Retail sales rose by 12.7% y/y in May, lower than the expected 13.6% and April’s 18.4% growth
Fixed asset investment eased from 4.7% to 4.0% in the first five months compared to a year ago
Unemployment rate remained at 5.2%
Switzerland May producer and import prices -0.3% vs +0.2% m/m prior
State Secretariat for Economic Affairs said Switzerland’s consumer prices will rise 2.3% this year, lower than the 2.8% rate in 2022
Price Action News
Japan didn’t print top-tier economic reports today, but JPY was one of the biggest (if not THE biggest) major currency mover today.
The yen’s downswing started almost as soon as the Asian session traders got the chance to price in the Fed’s rate hike and the members’ more hawkish-than-expected outlook on the foreseeable monetary policy direction.
USD/JPY strength likely led most of the yen crosses but the anti-JPY move was broad-based.
JPY dropped across the board, with the heaviest losses seen against AUD, NZD, and GBP.
Upcoming Potential Catalysts on the Forex Economic Calendar:
ECB’s policy decision at 12:15 pm GMT
U.S. retail sales data at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. NY manufacturing index at 12:30 pm GMT
U.S. Philly Fed manufacturing index at 12:30 pm GMT
ECB’s presser at 12:45 pm GMT
U.S. industrial production at 1:15 pm GMT
BusinessNZ manufacturing index at 10:30 pm GMT
BOJ’s policy decision out during the Asian session (Jun 16)
China’s data dump at 2:00 am GMT (June 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
EUR/CHF: 15-min
The European Central Bank (ECB) is about to print its June monetary policy decision!
In case you missed our ECB event trading guide, you should know that markets are expecting President Lagarde and her gang to raise their interest rates by another 25 basis points to 4.00%.
What may provide extra volatility for EUR is how convincing ECB members are in projecting a hawkish bias when data releases area already pointing to economic weaknesses.
If traders shrug off threats of further rate hikes, then EUR could lost some of its intraweek gains.
EUR/CHF, which is knocking on its June resistance and the R2 (.9790) of today’s Standard Pivot Points, could turn lower.
Depending on how much bearishness EUR sees after the ECB decision, I’m looking to target the R1 (.9780) of today’s Pivot Points if not the .9760 previous inflection point.
