Forex Technical & Market Analysis: June 06 2013

Forex Technical & Market Analysis: June 06 2013

Jun 6 • Market Analysis • 1555 Views • No Comments

2013-06-06 04:20 GMT

EUR Prime for a Breakout on ECB

The euro is prime for a breakout. Unlike other major currency pairs, EUR/USD traded in a relatively tight range throughout the European and North American sessions. On a technical basis, the currency pair stayed between the 100 and 200-day SMAs for the past 48 hours, which reflects the hesitation of investors who are waiting for a catalyst to take the currency pair out of its range. Tomorrow could be the perfect opportunity for a breakout in the pair with the European Central Bank scheduled to deliver its monetary policy decision. The ECB is widely expected to leave interest rates unchanged leaving Mario Draghi's press conference as the primary focus for FX traders.

ince the last monetary policy meeting, we have seen both improvements and deterioration in Eurozone data. There were no revisions to PMI services today but Eurozone retail sales dropped more than expected. Up until this weekend when ECB President Draghi noted "few signs of possible stabilization" in the Eurozone and said he expects a "very gradual recovery" later this year, the head of the central bank seemed to be a larger advocate for negative rates. This contrasts with some of the skepticism on the effectiveness of negative rates expressed by Nowotny, Mersch, Asmussen and Noyer, all members of the Governing Council. Nonetheless, economic conditions have not deteriorated enough to warrant this nuclear option and Draghi won't be looking to it rule out on Thursday. Instead, the head of the central bank will carefully balance a slightly more optimistic outlook for the economy with an open mind on negative rates. As this may be confusing to investors, clarification could come from the central bank's latest economic forecasts. While we are optimistic that the EUR could rally, we are not particularly hopeful as the ECB will want to avoid saying anything that could drive the euro sharply higher. So if Draghi emphasizes the possibility of negative rates over improving data, the EUR/USD could reverse its rise. If he focuses on the bright spots in the economy however the EUR/USD could squeeze higher and finally muster a strong break of 1.31.-FXstreet.com

FOREX ECONOMIC CALENDAR

2013-06-06 11:00 GMT

BoE Interest Rate Decision

2013-06-06 11:45 GMT

ECB Interest Rate Decision

2013-06-06 12:30 GMT

ECB Monetary policy statement and press conference

2013-06-06 12:30 GMT

USA. Initial Jobless Claims

FOREX NEWS

2013-06-06 05:16 GMT

GBP/USD dealing around 1.54 ahead of BoE

2013-06-06 04:59 GMT

USD lower but holding above 82.50 DXY; Aussie smacked

2013-06-06 04:24 GMT

Economic data set to heighten volatility in EUR/USD

2013-06-06 00:24 GMT

AUD/USD cracks the big 0.95 figure down

Forex Technical Analysis  EURUSD

MARKET ANALYSIS – Intraday Analysis

Upwards scenario: EURUSD stabilized after the initial uptrend formation. Potential to move higher is seen above the next resistance level at 1.3116 (R1). Loss here would suggest next intraday targets at 1.3135 (R2) and 1.3155 (R3). Downwards scenario: We would shift our intraday technical outlook to the negative side if the price manage to penetrate below the key support at 1.3074 (S1). Clearance here is required to enable intraday targets at 1.3053 (S2) and 1.3033 (S3).

Resistance Levels: 1.3116, 1.3135, 1.3155

Support Levels: 1.3074, 1.3053, 1.3033

Forex Technical Analysis  GBPUSD

Upwards scenario: Ascending structure on GBPUSD suggest possible correction ahead though break above the resistance at 1.5418 (R1) is liable to stimulate bullish pressure and validate interim target at 1.5443 (R2) en route final aim at 1.5469 (R3). Downwards scenario: Retracement action is possible if the price manages to overcome our initial support level at 1.5359 (S1). In such case we would suggest intraday targets at 1.5353 (S2) and 1.5327 (S3).

Resistance Levels: 1.5418, 1.5443, 1.5469

Support Levels: 1.5359, 1.5353, 1.5327

Forex Technical Analysis  USDJPY

Upwards scenario: Next hurdle on the upside is seen at important technical level – 99.55 (R1). If the price manages to overcome it we expect further acceleration towards to our initial targets at 99.83 (R2) and 100.12 (R3). Downwards scenario: On the downside next challenge is seen at 98.86 (S1). Breakthrough of this mark would open way for a downside expansion and could possibly trigger our initial targets at 98.58 (S2) and 98.30 (R3) later on today.

Resistance Levels: 99.55, 99.83, 100.12

Support Levels: 98.86, 98.58, 98.30

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