Daily Market Analysis from ForexMart

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EUR/USD. May 11, 2021 | Dollar continues to decline after Friday's Payrolls report

The US dollar accelerated its decline after the release of Friday's Non-farm Payrolls report, according to which the number of new jobs created was almost 25% lower than forecasted – 266 thousand against 1 million. The unemployment rate rose from 6% to 6.1%. The latest statistics turned out to be an unexpected shock for market participants, and the quotes of the EUR/USD pair rose to the level of 1.2180.

In total, during the pandemic, the American economy lost 22 million jobs, and about 8 million are still not restored.

Today the pair continues to fluctuate slightly below the 1.22 level. The economic calendar is of little interest. All market participants' attention is directed to the upcoming statistics: on Wednesday the US will publish statistics on consumer prices, on Friday – on retail sales.

The oil market on May 11, 2021

Brent quotes on Tuesday decline from the area of local highs above $69 per barrel. The current price of the asset is $67.50 per barrel.

Black gold is declining amid the gradual reopening of the Colonial Pipeline Co. pipeline system, which suspended operations last Friday due to a hacker attack. This pipeline system is the main source of gasoline, diesel and jet fuel supplies to the US East Coast.

The rapid spread of the coronavirus in India continues to put additional pressure on investor sentiment. The government of the country came face to face with the need to introduce a harsh isolation regime.

In the near future, oil prices can only be supported by data on crude oil reserves in the United States. Analysts expect that statistics from the Ministry of Energy (May 12) will show a decrease in reserves by 2.3 million barrels per week. Gasoline stocks are expected to fall by about 400,000 barrels. Today you should pay attention to the monthly OPEC report, which will include data on production in April.

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EUR/USD. May 12, 2021 | Euro is correcting after strong growth

The EUR/USD pair declines slightly on Wednesday after a sharp rise to the level of 1.2180. The current quotation of the asset is 1.2125.

The statistics from the eurozone published the day before, as a whole, pleased investors: the index of sentiment in German business circles in May rose to 84.4 points from the previous 70.7. The forecast assumed a rise to 72.0 points. The same indicator for the entire euro area soared to the level of 84.0 points from the previous 66.3. Such data speaks about the attenuation of the third wave of coronavirus in Europe and has a positive effect on business prospects.

Today you should pay attention to the report on the volume of industrial production in the eurozone for March. The indicator came out worse than expected, rising only 0.1% against expectations of 0.7% growth.

In the US, the most anticipated indicator of the week will be published – the consumer price index for April. Median forecasts assume only 0.2% MoM gain is possible after the 0.6% rise in March. If the data is in line with expectations, the dollar will have a chance to strengthen and return to the area below 1.21.

GBP/USD. May 12, 2021 | The pound sterling breaks all records

The pound sterling remains the leader of the foreign exchange market, demonstrating a sharp rise to 1.4170, which was the highest since the end of February. In general, the pair is approaching the level of 1.42 – the last time such values of the British currency rate were recorded in April 2018.

The pound received strong support on the results of the regional elections. Scottish National Party SNP won 64 seats in the Scottish Parliament, one less for the majority. Analysts note that calls for a referendum on independence will continue, but this is unlikely to lead to increased political risks for the pound sterling.

Additional positive was brought by the report from the BRC chain: the volume of retail sales in April on an annualized basis increased by 39.6% after increasing by 20.3% a month earlier.

A busy news day awaits the UK today. The country's GDP contracted by 1.5% on a quarterly basis (which turned out to be better than the forecast of -1.6%). Industrial production statistics in March showed an increase in the indicator by 1.8% (against the forecast of growth by 1%). The data on the trade balance reflected a decrease of 6.55 billion. 

It can be said that the strong statistics were the result of successful mass vaccinations and the relaxation of quarantines.
 

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EUR/USD. May 13, 2021 | Dollar remains strong after inflation data

The EUR/USD pair has weakened noticeably after the release of yesterday's statistics on inflation in the US. The current quote for the pair is 1.2050. According to the US Department of Labor, in April, consumer prices rose at their most in almost 12 years due to increased demand amid the opening of the economy. Excluding food and energy prices, consumer prices rose 0.9%, the highest since April 1982. Annualized inflation rose to 4.2%, the highest since 2008.

There is a logical reason for this rise in prices: as the American economy recovers, the consumer is faced with a noticeably reduced supply, which pushes prices up.

Additional pressure on the euro was exerted by macroeconomic reports from the eurozone. According to Eurostat, industrial production in the region rose 0.1% in March, after falling 1.2% a month earlier. Experts forecast an increase of 0.7%. On an annualized basis, the indicator grew by 10.9% against the forecast of 11.6%.

Today we should pay attention to the report on the number of initial claims for unemployment benefits and the producer price index in the United States.
 

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GBP/USD. May 17, 2021 | Sterling weakly declines after rising to 1.41

The British pound suspended its gains in the 1.4100 area and the GBP/USD pair bounced back to 1.4090. The pound is under pressure from concerns about new coronavirus outbreaks in the country. On Friday, British Prime Minister Boris Johnson said that the weakening of the lockdown is in question due to the risk of the spread of the Indian strain of the coronavirus.

Earlier, the dynamics of the dollar was influenced by economic reports from the University of Michigan: the consumer expectations index in May fell from 82.7 to 77.6 points, while the forecast assumed an increase to 85 points. The consumer sentiment index was 82.8 points against the forecast of 90.4 points. The index of current conditions fell from 97.2 to 90.8 points, experts had expected an increase to 99.6 points.

Today the macroeconomic calendar is empty. Only the statements of the Bank of England and FOMC representatives can arouse interest.

The RSI indicator weakly declines from the neutral zone, which indicates further moderate weakening of the pound sterling.

GBP/USD. May 14, 2021 | Sterling rises moderately towards 1.4100

The British currency continues to show signs of strengthening against the US dollar, recovering from 1.40 to 1.41. The current quote for the GBP/USD pair is 1.4080.

The economic calendar for the UK is empty today, all investors' attention will be drawn to the statistics from the US. In particular, we are waiting for a report on retail sales, data on imports and exports, as well as on industrial production in April. Of particular interest will be the consumer expectations and sentiment index from the University of Michigan in May.

In general, the pound sterling retains potential for growth, as the growth of the UK economy in March was better than forecasted: the economy grew by 2.1% compared to the previous month, while growth was expected by 1.5%. 

Moreover, yesterday the chief economist of the Bank of England Andrew Haldane said that inflation in the UK will exceed 2% by the end of 2021. He also noted that it is quite possible to expect double-digit GDP growth over the year.

During the day, market participants will analyze statistics from the US, which will allow the GBP/USD pair to determine the direction of movement before the weekend.
 

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Brent. 18.05 | Oil market reached new highs

The oil market again demonstrates significant growth: Brent quotes rose today to $70 per barrel.

The prices for «black gold» are supported by the improved forecasts for the demand for energy resources, despite the rather weak statistics from the USA and China. For example, in the Celestial Empire, the report on retail sales showed an increase of 17.7%, which is significantly worse than the expected 24.9%.

Investors are quite optimistic, expecting that demand this year will still reach its peaks in the second half of the year. Similar forecasts were presented to OPEC and the International Energy Agency. It should be noted that analysts ignored the difficult epidemiological situation in India, the world's third largest oil importer.

In addition to fundamental factors, Brent quotes are supported by the decline in the US dollar. Greenback is being sold amid the Fed's wait-and-see attitude, as well as weak US macroeconomic reporting. Recent reports indicate that the US economy will not recover as fast as previous forecasts suggested.

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Brent. May 19, 2021 | Oil declines after local highs

Oil prices are falling for the second day in a row amid concerns about lower demand due to a new wave of coronavirus in Asia. Additional pressure on Brent quotes is exerted by fears that the US Federal Reserve will raise interest rates due to rising inflation, which may limit further economic growth.

On Wednesday, the price of «black gold» fell to $67.38 per barrel, although on Monday Brent was trading above $70. This growth was driven by optimism about the lifting of coronavirus restrictions in the United States and Europe. However, it did not last long as India, Taiwan, Vietnam and Thailand reported a sharp spike in Covid cases.

Moreover, the uncertainty due to inflation has also forced investors to withdraw from riskier assets such as oil. Analysts note that the US Federal Reserve may raise rates due to fears of inflation, thereby affecting growth prospects and demand for commodities.

A report from the American Petroleum Institute (API) was released yesterday, according to which US oil inventories rose by 620 thousand barrels, while gasoline and distillate stocks fell sharply last week. Today investors are awaiting the release of similar data on reserves from the US Energy Information Administration.

GBP/USD. May 19, 2021 | Sterling is correcting after strong growth 

Yesterday was marked by a sharp rise in the pound sterling to the level of 1.4220. However, today the GBP/USD pair started to decline to the level of 1.4160.

The British currency received support amid the improvement in the epidemiological situation in the UK, where quarantine restrictions have been significantly eased since May 17. An additional positive was brought by economic statistics, according to which, in April, the consumer price index rose by 0.6%, which coincided with expectations, and the producer purchase price index rose by 1.2%, which turned out to be better than the 1.1% forecast.

At the same time, the pressure on the dollar was exerted yesterday by data on construction in the United States: the number of permits for building houses issued in April amounted to 1.76 million, while expectations were 1.77 million.

Today, the American currency is strengthening as part of the correction and in anticipation of the evening publication of the FOMC minutes. The pound sterling still has strong upside potential as economic data show a strengthening UK economy: the UK labor market is on the rise – 84,000 new jobs were created in March, benefits applications fell by 15,000 and unemployment fell from 4.9% to 4.8%.

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EUR/USD. May 20, 2021 | Euro is recovering after yesterday's drawdown

The EUR/USD pair is recovering its positions on Thursday after yesterday's drawdown to the level of 1.2150. The current quote for the pair is 1.2190.

Yesterday, the US Federal Reserve released the minutes of the last meeting. The document says that the US economy is still very far from the regulator's goals, and supply problems continue to impede its recovery. At the same time, it was noted that economic activity has nevertheless increased sharply recently.

Regarding the state of the labor market, the Federal Reserve is confident that the growth rates of employment in certain sectors have become lower than they were before. The global outlook for inflation has not changed, and core inflation remains weak and insignificant.

The US dollar weakened somewhat after the publication of the minutes, as the regulator did not clearly indicate its position on stimulating and supporting the economy. As a result, there were rumors in the market that a strong labor market report for May could be a signal for a $ 120 billion reduction in the asset purchase program in June.

At the same time, the European currency is supported by the improved prospects for the economic recovery of the eurozone. If the situation continues to improve, the ECB may consider the possibility of reducing the volume of the quantitative easing program at the end of this year.
 

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EUR/USD. May 24, 2021 | The pair is in the range of 1.2150-1.2250

At the beginning of the new trading week, the euro continues to trade in the range of 1.2150-1.2250. The current price of the EUR/USD pair is 1.2200.

The European currency was supported by the publication of the composite index of business activity (PMI) in industry and services of 19 eurozone countries in May. According to preliminary estimates, the indicator rose to 56.9 points in May from 53.8 points in April. At the same time, analysts had expected the indicator to rise to 55.1 points. Such figures became a record for three years and three months.

The index of business activity in the service sector of the euro zone in May, according to preliminary estimates, rose to 55.1 points against 50.5 points in April. Experts predicted growth to 52.3 points.

It is worth noting that many financial institutions are beginning to revise their forecasts for the euro area. For example, the Bundesbank believes that Germany will reach pre-pandemic levels in the fall of this year, and consumer prices may rise by 4%.
 

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EUR/USD. May 25, 2021 | Euro is correcting after strong growth

The euro rate accelerated its growth on Tuesday, breaking through the upper boundary of the sideways trend 1.2150-1.2250. The European currency continues to be supported by the optimism of investors regarding the imminent recovery of global economies. And against this background, the demand for the «safe» dollar is declining, which is putting strong pressure on the American currency.

Additional support for the euro was provided by economic data from Germany. According to the final estimate of the country's Federal Bureau of Statistics, GDP in the first quarter of 2021 declined by 1.8% against a projected decline of 1.7%. On an annualized basis, the GDP of Europe's largest economy fell 3.4%, while experts had expected a decline of 3.3%.

The index of business expectations in Germany in May rose to 102.9 points (from 99.2), the forecast assumed the indicator at the level of 101.4 points. The business climate index was 99.2 points (forecast – 98.2 points).

However, the RSI indicator bounced off the resistance area, which signals a weakening of the euro and the return of the EUR/USD pair to the range of 1.2150-1.2250.
 

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EUR/USD. May 27, 2021 | Dollar strengthened on positive macro data

The EUR/USD pair dropped below the level of 1.2200 and the bulls are unlikely to be able to return the euro to the area of local highs in the near future. The current quote of the instrument is 1.2180.

Important macroeconomic statistics were not published yesterday, however, the dollar strengthened against the background of good yields on US government bonds, as well as due to general market neutrality. At the same time, the euro was pressured by data from the GfK company, according to which the leading consumer confidence index for June rose to -7 points from -8.6 points in May, worse than expected.

Today the focus of traders' attention is shifted to the USA, where the GDP data in the second estimate was published. The US economy expanded by 6.4% qoq, worse than expected. The initial level is also fixed at 6.4%. Data on the volume of orders for durable goods in April showed an increase of 1.0%, which turned out to be better than analysts' forecasts, who had expected an increase of 0.8% m/m.

Also today you should pay attention to the number of initial applications for unemployment benefits in the United States. The number of Americans who filed new applications for unemployment benefits last week fell more than expected – to 406 thousand. Analysts had expected 425 thousand applications. Taking into account these statistics, we can conclude that the US dollar will continue to strengthen and the pair quotes will return to the 1.2150 area.

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EUR/USD. May 28, 2021 | The dollar strengthens below 1.22

The main currency pair continues to trade below the 1.2200 level. The current quote for the pair is 1.2180.

The dollar was supported yesterday by macroeconomic statistics on the US labor market. According to the Ministry of Labor, the number of claims for unemployment benefits for the week was 406 thousand, reflecting a sharp decrease compared to last week at the level of 444 thousand. Analysts predicted the figure at the level of 425 thousand.

The second estimate of US GDP for the first quarter did not reflect changes compared to the initial estimate, confirming the economic growth of 6.4% qoq. Experts had expected growth to 6.5% q/q. The volume of orders for durable goods in the US in April fell by 1.3% m/m after an increase in March by 0.8% m/m and the forecast of an increase this time by the same 0.8% m/m.

The dynamics of the dollar is now mainly influenced by the position of the FRS. If the regulator continues to continue its stimulating policy, ignoring inflationary risks, the greenback has little chance of strengthening. US Treasury Chief Janet Yellen believes that annual inflation in the country will be high at least until the end of this year, and Yellen estimates the recent inflationary surge as a temporary phenomenon.

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European indices Stoxx Europe 600 and DAX on Friday updated records

The composite index of the largest enterprises in the region Stoxx Europe 600 increased by 0.57%, to a record 448.98 points. The German DAX climbed 0.74% and surpassed the 15,500 mark for the first time.

The French CAC 40 gained 0.75% and hit its highest level in 21 years.

The British FTSE 100 indicator rose 0.04%. Italy's FTSE MIB and Spain's IBEX 35 added 0.45% and 0.42%, respectively.

Global markets are being supported by signs that the US economic recovery from the COVID-19 pandemic is gaining momentum.

The data on the US labor market, released yesterday, showed a more significant than expected reduction in the number of applications for unemployment benefits in the country. The number of new applications last week decreased by 39 thousand, to 406 thousand, the lowest since the beginning of the coronavirus pandemic. Analysts on average expected the number of applications to decrease to 425 thousand.

The consensus forecast of experts provides for the growth of the PCE Core index in April by 2.9%, the highest since 1993.

Market participants are also watching talks in Washington on an infrastructure spending plan to further support the economy.

In the fourth quarter of last year, according to revised data, French GDP fell by 1.5%, not 1.4% as previously reported.

Shares in UK developer Vistry Group PLC jumped 4.3% in Friday trading, ranking among the top gainers among the Stoxx Europe 600 components.

Siemens AG, Europe's largest industrial conglomerate, rose 3.8%.

The leaders of the fall were the shares of the Spanish bank Banco de Sabadell SA, which lost 4.5%.

Antofagasta Plc, one of the world's largest copper producers, lost 2.2%.

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The dollar is waiting for specifics from the Fed

Fundamentally, the dollar looks weak. Arguments in favor of its further decline have been listed for several weeks. If last week a deeper sinking of the dollar did not take place, in particular, due to large placements of the US Treasury, then it is quite possible to fall to new lows this week. The next few sessions are exempted from bond placements.

It is worth noting that the marks of 89.00–90.0 points serve as a kind of support for the American currency index, which is quite efficient. Despite the increased pressure, the dollar does not fall below. Yes, the American dollar is weak, but in order to gain more arguments in favor of further weakening, you need to look around and carefully study what is happening. Not everything is so simple here, some statements of the FRS members caused some distortions in the markets. And yet, the US Central Bank in the near future may begin substantively talking about the beginning of the reduction of quantitative easing.

Real estate in the USA is becoming more expensive at alarming rates, which provokes comparison of the current situation with the period of 2006-2007. After the coronavirus crisis, it was not enough to get into a mortgage. At least some kind of reaction is now expected from the Fed.

Expectations of hints of at least some action support the dollar a little, at least they are able to keep it from falling deeper. At the same time, the technical picture in the dollar index on the weekly time frame indicates the possibility of a double bottom formation around 89.00 points.

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Euro and the US dollar continue to fight for control in the currency market

The race for leadership continues between the American and European currencies. The competition between these two currencies keeps the market in good form, heating up an already tense situation.

On the morning of June 2, the EUR/USD pair was sharply trading around the level of 1.2214, gradually rising from the previous close at 1.2211. But compared to June 1, the main currency pair loses noticeably, declining from the level of 1.2230. It can be noted that an important resistance level for the euro has formed near this level.

In order to strengthen the "bearish" sentiment and to break through the support level of 1.2212 and the mirror level of 1.2200, the EUR/USD pair will head to the levels of 1.2163, 1.2128, and 1.2102. In the other scenario, the instrument will remain within the price range of 1.2212-1.2232. It can be noted that the ANZ Research Bank's experts expect the pair to slowly increase to the level of 1,2300 in the second quarter of 2021, and to 1.2400 and to 1.2600, respectively in the third and fourth quarters.

However, the continuation of the growth may become more complicated amid the high probability of curtailing the Fed's stimulating policy. There are ongoing discussions about this in the market, but the implementation of these plans is still uncertain. The current situation keeps the US dollar in suspense, and its dynamics are far from stable. This week, the US dollar is trading near five-month lows, yielding not only to the Euro, but also to commodity currencies.

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AUD/USD: Does the Australian dollar need help to see further paths?

The Australian dollar remains relatively calm, being in the existing price range. However, experts warn traders against being too relaxed, believing that the currency can change direction at any time.

During the current week, the Australian dollar experienced a slight volatility. On Wednesday, June 2, the Australian dollar sank slightly, despite the positive macro statistics received from Australia. According to a report from the Australian Bureau of Statistics (ABS), in the first quarter of 2021, the country's GDP increased by 1.8%, and on an annualized basis – by 1.1%.

The current situation has had a positive impact on the dynamics of the Australian dollar. On the morning of Thursday, June 3, the AUD/USD pair was trading near 0.7724, trying to get higher. According to analysts, since the beginning of this year, the tandem has remained in a wide range – from 0.7600 to 0.7835. Over the past three weeks, it has narrowed to 0.7680 and 0.7815. According to experts, the AUD/USD pair lacks strong drivers for a further breakthrough. In the event of their appearance, the scale of the tandem can tilt either downward or go up.

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BTC reaches $38,100 after five days slump

On June 2, the crypto community froze in anticipation of the formation of the "death cross" figure on the horizontal charts of bitcoin. Despite the high probability of such a scenario, the market supported bitcoin. The indicators of the BTC/USD pair rose by 5% and reached $38,100 for the first time since May 28. Bitcoin has shown signs of life and encouraged the entire market, but it is still too early to talk about the beginning of an upward trend.

Despite the encouraging results and the almost complete exclusion of the possibility of retesting $30,000, bitcoin is in an unstable position. To consolidate the sudden success caused by the activity of the market, the indicators of the cryptocurrency need to overcome and gain a foothold above the $40,000 mark. Given the current dynamics of price changes (+0.5%) and the daily trading volume that has dropped to $33 billion, there is reason to believe that BTC is still at the consolidation stage. The asset continues to accumulate the volumes necessary for a successful assault of the $40,000 mark and is a little nervous around $39,000. At the same time, the sudden increase to $38,000 indicates an upward trend in market support. This may be a signal for the entry of more skeptical players, who will accelerate the accumulation of the necessary volumes to gain a foothold above the psychological mark.

As of 10:00 UTC, bitcoin quotes are in a safe corridor, and the asset is gaining momentum, as can be seen on the horizontal charts. It is likely that with the proper level of market support, the cryptocurrency will be able to reach $40,000 by the evening of June 3. The latest decline in bitcoin indicators occurred in the region of $38,900, but the coin almost immediately won back the fall and continued to grow. BTC quotes had problems reaching the $39,000 mark, where the coin collapsed on June 29. This threshold will be the last significant problem before the retest of the $40,000 mark. Given the growing interest in the first cryptocurrency, we can expect a successful breakout of the round mark in the upcoming test.

Ethereum and the Ripple token are able to provide a reverse service to bitcoin, increasing interest in the cryptocurrency market by accumulating their own reserves. This interaction between assets was made possible due to the significantly increased correlation between altcoins and bitcoin, which reached 60%-80%. At the same time, the positive news was not fully won back by the market, which may become an additional factor in the success of BTC. For example, it became known that Google will lift the ban on advertising cryptocurrency platforms and wallets in the United States. In addition, Messari analysts added a positive message to the market, who believe that the collapse of the crypto market and bitcoin is caused by excessive oversaturation and inadequate reactions of players to economic events, and not by the fundamental problems of the first cryptocurrency. The Chainalysis platform also confirmed that whales continue to actively increase their positions in bitcoin and have purchased from 70,000 to 120,000 bitcoins over the past days of the collapse. The growing confidence of investors, supported by positive announcements, can be a determining factor in the successful retest of bitcoin of the $40,000 mark.

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Euro has the potential to rise but it is not easy to reach

The Euro currency is trying to rise again, taking advantage of the weakening of the US currency. However, experts are worried that these efforts will end unsuccessfully.

Throughout the previous week, the euro was behind the dollar, which reacted sensitively to any nuances of the market. Such changes in the USD dynamics include the May report on US employment. It can be noted that the national currency started to slip after its publication, and the euro tried to take advantage of the situation, but it failed to noticeably rise. According to current macroeconomic data, the number of jobs outside of agriculture increased by 559 thousand last month in American, and the economy recorded an influx of workers. The improvement in the economic situation has been facilitated by health gains resulting from large-scale vaccination against COVID-19, and strong fiscal incentives. However, there is a question recently about their curtailment, which was raised by Fed representatives.

Economists believe that the euro's further dynamics will be influenced not only by the Fed's actions but also by the ECB's monetary policy strategy. They think that with the strengthening of the "hawkish" tone on the part of the regulator, the euro will start losing positions. If the representatives of the Governing Council of the ECB slow down the pace of buying up state bonds under the PEPP program, then the indicated currency will begin to decline.

The continuation of the current trend contributes to the growth of the EUR/USD pair. Its nearest target is the level of 1.2300. On the morning of, June 7, the main currency pair was trading near the 1.2163 mark, trying to reach 1.2200, but failed.

According to experts, the bullish mood in the EUR/USD pair may increase in the current situation, if a strong resistance level near the level of 1.2167 is broken. If so, the pair will open the way to the round level of 1.2200, and to 1.2212 and 1.2258 in the future. The next barrier for the EUR/USD pair will be the level of 1.2300, which can be reached anytime soon.

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Simplified wave analysis and forecast for GBP/USD and AUD/USD on June 9

GBP/USD

Analysis:
The upward trend in the main pair of the British pound sets the direction of the trend since the spring of last year. A correction is formed in the wave structure. The price is located in the area of the intermediate resistance zone. The incomplete wave from May 10 has the form of a shifting plane. Its ascending section from June 4 has a reversal potential.

Forecast:
Today, the price of the pair expects a general lateral movement vector. After a likely attempt to put pressure on the resistance zone, you should wait for a reversal, and the price moves down to the lower border of the price corridor.

Potential reversal zones
Resistnce:
- 1.4200/1.4230
Support:
- 1.4100/1.4070

Recommendations:
Trading on the British pound market today is possible only in the framework of individual trading sessions with a reduced lot. Purchases of the pair are more promising.

AUD/USD

Analysis:
The chart has been dominated by bullish momentum since last year. Since February 25, the price has been forming a horizontal correction along the lower border of the strong resistance zone. The unfinished part of this wave has been reported since May 10. In its structure, the middle part is nearing completion.

Forecast:
In the first half of the day, you can expect a flat nature of the movement, with an upward vector. By the end of the day, in the area of the calculated resistance, there is a high probability of a reversal and the beginning of the price move down.

Potential reversal zones
Resistance:
- 0.7770/0.7800
Support:
- 0.7700/0.7600

Recommendations:
Trading on the Australian dollar market today can only be successful within the intraday. It is recommended to sell the instrument from the resistance zone.

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American stock market closed in the red

Food manufacturer Campbell Soup Co. in the 3rd quarter of 2021 fiscal years, which ended on May 2, reduced net profit and revenue, and also worsened the annual forecast. On this news, the company's share price fell 6.5%.

The world's largest express delivery service United Parcel Service said it expects to increase its annual revenues to $ 98-102 billion by 2023. Last year, UPS revenues were $ 84.6 billion. According to FactSet's forecast, in 2021 it will reach $ 93.68 billion. , in 2023 will reach $ 99.92 billion. Nevertheless, the company's shares fell by 4.2%.

Wendy's Co., the third largest fast food chain in the United States, plunged 12.7% after jumping nearly 30% a day earlier. Stifel analysts downgraded their recommendations to Hold from Buy.

Target Corp. lost 1.3% in a day, despite the fact that the retailer announced an increase in quarterly dividends by almost a third, to 90 cents per share.

Caterpillar, one of the world's leading manufacturers of road construction and mining equipment, also increased its quarterly dividend by 8% to $ 1.11 per share. However, the shares of this company also fell in price by the results of the session by 2.3%.

Regeneron Pharmaceuticals Inc. was the leader of the recovery among the companies whose stocks are included in the calculation of the S&P 500. (+ 3.1%), Fox Corp. (+ 2.9%), Biogen Inc. (+ 2.9%).

The most significant rise in quotations among the securities included in the Dow Jones was shown by Merck & Co. Inc. (+ 2.3%), Johnson & Johnson (+ 1.4%) and Amgen Inc. (+ 1.1%).

At the same time, the strongest decline in value was recorded in the securities of Travelers Cos. (-1.2%), American Express Co. (-1.5%) and JPMorgan Chase & Co. (-1.3%).

The US Federal Reserve has previously said inflationary pressures are temporary as the economy continues to recover from the crisis caused by the COVID-19 pandemic. However, the acceleration in the rate of rise in consumer prices is causing concern for analysts and traders.

As a result, the market continues to trade in a fairly narrow range in anticipation of inflation data, while the indices remain close to record levels.

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Simplified wave analysis and forecast for USD/JPY and AUD/USD on June 14

AUD/USD

Analysis:
A bullish trend dominates the Australian dollar major market. A correction has been developing along the lower border of the strong reversal zone since February. The unfinished section counts down from May 10. In the structure of this wave, the middle part is nearing completion in the form of shifting planes.

Forecast:
Today, the pair's price is expected to flat in the price corridor between the nearest counter zones. After an attempt to put pressure on the support, a reversal and an increase in the rate to the resistance area is likely.

Potential reversal zones
Resistance:
- 0.7750/0.7780
Support:
- 0.7690/0.7660

Recommendations:
Today, trading on the pair's market is only possible in separate sessions with a fractional lot. As a result, purchases of the pair are more promising.

USD/JPY

Analysis:
The ascending wave sets the direction of the short-term trend of the main pair of the Japanese yen from January 6. A stretched descending plane has been forming in its structure since the beginning of March. All price movements of the last two months do not go beyond this wave.

Forecast:
On the next day, the full completion of the upward movement vector, the formation of a reversal, and the beginning of the price move down are expected. The calculated support shows the lower limit of the expected daily course of the pair.

Potential reversal zones
Resistance:
- 109.80/110.10
Support:
- 109.30/109.00

Recommendations:
Trading the yen today is possible within the intraday, with a reduced lot. There are no conditions for purchases on the market. It is recommended to track sell signals in the area of the calculated resistance.

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Stock Asia is trading without a single dynamic

As a result of the next meeting of the leadership of the American Central Bank, in addition to the traditional statement on the rate and volume of asset redemption, economic forecasts will be published, as well as expectations regarding further dynamics of interest rates.

Experts believe that the Fed will not give signals about plans to gradually reduce the volume of redemption of bonds earlier than in August-September this year.

At the same time, a dot plot - that is, a chart that reflects the individual expectations of the Fed's Board of Governors and the heads of the Federal Reserve Banks regarding interest rates - could show that all 18 central bank leaders expect at least one rate hike in 2023.

According to Marcella Chow, global markets strategist at JPMorgan Asset Management, at some point ignoring inflation concerns will no longer convince investors, so the focus will be on what the Fed says about its expectations for economic growth, inflation and interest rates.

The Japanese Nikkei 225 Index climbed 1.01% by 8:37 GMT + 2.

Among the leaders of the increase in quotations are shares of Eisai Co. (+ 6.2%), NEC Corp. (+ 4.9%) and Taiyo Yuden Co. (+ 3.9%).

Market value of consumer electronics manufacturer Sony Group Corp. growing 1.4%, semiconductor manufacturer Advantest Corp. rises by 1.8%.

The leaders of the decline are J. Front Retailing Co. (-2.9%), Kajima Corp. (-2.6%) and IHI Corp. (-2.4%).

The price of securities investment and technology SoftBank Group Corp. fell 0.2%, Asia's largest apparel retailer Fast Retailing Co. decreased by 0.2%.

The Chinese Shanghai Composite Index dropped 0.75% by 8:42 GMT + 2, while Hong Kong's Hang Seng lost 0.71%.

The most significant losses during trading on the Hong Kong Stock Exchange were incurred by the shares of the restaurant chain Haidilao International Holding (-4.2%), the manufacturer of power tools Techtronic Industries Co. (-3.5%) and biologics manufacturer Wuxi Biologics (Cayman) Inc. (-3.2%).

Consumer electronics manufacturer Xiaomi Corp. down 0.4%, one of the key players in the PRC's Internet services Meituan fell 1.6%.

The leaders of growth were shares of the manufacturer of electric vehicles BYD Co. (+ 4.5%), which produces traditional cars Geely Automobile Holdings (+ 3.4%) and China Mengniu Dairy Co., the largest dairy producer in the country. (+ 2.5%).

Internet giants Tencent Holdings and Alibaba (NYSE: BABA) Group Holding gained 0.6%.

The South Korean Kospi index rose by 0.15% by 8:57 GMT + 2.

Capitalization of one of the world's largest chip manufacturers Samsung Electronics Co. increased by 0.4%, another industry representative SK Hynix Inc. rose 1.2%.

The price of shares of the automaker Hyundai Motor Co. dropped 0.2%, Kia Corp. practically do not change in price.

Australian indicator S & P / ASX 200 added 0.96% by 8:57 GMT + 2.

Representatives of the Reserve Bank of Australia (RBA) came to the conclusion that it is too early to consider the issue of curtailing the bond buyback program, according to the minutes of the June meeting of the Australian Central Bank.

As a result of the June meeting, the RBA kept the base interest rate at a record low level of 0.1% per annum, as most economists believed. At the same time, the leadership of the Central Bank confirmed its commitment to maintaining a super-soft monetary policy at least until 2024, when inflation is expected to return to the 2-3% range.

The market value of the world's largest mining companies BHP Group and Rio Tinto rose 0.6% and 1.5%, respectively.

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Oil rises continuously on the back of the news from the USA and Europe

Today, the world oil market demonstrates steady growth following a spectacular rise in the past week and a general three-week increase against the background of an improvement in the global situation.

The main upward factor for the positive dynamics remains the prospects for demand for oil in developed countries, which is permanently increasing due to high rates of vaccination and the lifting of restrictive measures.

Thus, US residents began to actively return to work, gather in companies and visit crowded places. In addition, the average daily air traffic in the United States, for the first time since the beginning of the COVID-19 pandemic, has stepped over the level of 2 million passengers.

According to the forecasts of the International Energy Agency, world oil demand will return to the dock level by the end of next year. This year, according to IEA experts, demand will grow by 5.4 million barrels per day - up to 96.4 million barrels per day, and in 2022 - by 3.1 million barrels per day.

In its Friday report, the agency said that OPEC and its allies must increase oil production to ensure the required level of supply in world markets.

At the same time, analysts cite multiple positive news from North America and Europe that are opening after the pandemic quarantines as the reason for the bright growth of the oil market over the past week.

At the time of writing this material, the oil market is showing the following indicators: the price of August Brent oil futures on the London ICE Futures Exchange was at $73.35 per barrel, exceeding the previous session's closing level by 0.91%.

The cost of July contracts for WTI crude oil on the New York Mercantile Exchange NYMEX increased by 0.78% - $71.46 per barrel.

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The Fed's rhetoric caused BTC to "stumble". Is its failure a short-term phenomenon?

The first cryptocurrency did not stay away from the main event of the current week – the meeting of the Federal Open Market Committee (FOMC). However, the decisions taken by the regulator tripped bitcoin, which demonstrated a downward trend.

On the evening of Wednesday, June 16, the main digital asset fell to $38,100, but later regained some losses. On the morning of Thursday, June 17, the first cryptocurrency was trading near $39,200, losing 2.8% over the past day. The driver of the sharp decline in bitcoin was the results of the June meeting of the US Federal Reserve. Recall that the US regulator kept the key rate at the level of 0-0.25% per annum, and also left low interest rates until the moment when the level of employment and inflation will be near the target 2%. At the same time, the Federal Reserve extended the program of asset repurchases in the amount of $120 billion per month.

The publication of the Fed report contributed to a noticeable decline in the stock and cryptocurrency markets. To date, the capitalization of the digital asset market has decreased by 2%. Experts are afraid of further subsidence, although they record minor signs of stabilization. Experts note a long-term medium-term correction for bitcoin, which continues to increase. According to analysts, the crypto market has tested the lower limits of the long-term trend in the BTC (near the support level of $34,972) and continues to recover. On the morning of Thursday, June 17, the BTC/USD pair was trading near $39,197, trying to expand the boundaries of the current range.

The market for virtual cryptocurrencies has repeatedly tried to turn upward, acting within the short-term trend. According to experts, the possibility of breaking the upper limit of this range ($43,402) is quite achievable. However, the implementation of this plan is difficult at the moment, although in the near future it is possible.

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EUR/USD. Fed woke up the dollar

Markets reacted to the FOMC meeting as if they were genuinely surprised by the shifting of the federal funds rate hike from 2024 to 2023. Did investors really believe that the Fed would turn a blind eye to rising inflation and remain the most peaceful central bank in the world? If so, they were in for a serious disappointment, resulting in a 1.8% collapse in the EUR/USD over the course of two trading days.

To prevent the recurrence of the 2013 taper tantrum, the Fed promised to inform in advance of all changes in monetary policy. In fact, the Central Bank has let its guard down, and the fact that rates may be raised twice in 2023 has become a real thunderbolt for investors. Short positions on the US dollar began to collapse en masse, which led to the fall of the EUR/USD to the base of the 19th figure. The confidence of the market majority that the main currency pair will soon reach the level of 1.25 is gone, and Nordea predicts a fall in the euro to $1.15 by the end of the year against the background of the outperforming dynamics of US inflation over European inflation.

In my opinion, what happened was what should have happened. The Fed could not look at inflation at the level of the 1990s indefinitely. Its previous passivity could be explained by disappointing statistics on American employment, but in the near future, the situation in the US labor market risks a serious change. Judging by the dynamics of vacancies, the gap between potential and actual employment will be filled quickly. If this does not happen, wages will increase dramatically. Both options are potentially bullish for the US dollar.

How can the euro respond to the US dollar? Because of the Fed, investors forgot that thanks to the accelerated vaccination in the EU, a boom in economic growth is expected in the eurozone in the second half of the year. That Brussels successfully sold the first bonds from the European Rescue Fund, while the demand at the auction was off the scale. That after the ECB meeting, the members of the Governing Council recalled that the emergency asset purchase program will end in March 2022. That next year, the currency bloc will surpass the United States in terms of GDP growth. I do not think that the "bulls" on EUR/USD will just throw a white flag.

The key events of the week to June 25 will be the speeches of Christine Lagarde and Jerome Powell, as well as the releases of data on European business activity, the German business climate, and American orders for durable goods. The market needs the dust from the shocks to settle, and then it will determine the direction of further movement.

Technically, only the return of EUR/USD quotes above 1.198 will revive the scenario of the transformation of the blue "Shark" to 5-0, followed by the continuation of the rally to the targets on the "Wolf Wave". With this option, purchases will become relevant. If it is not possible to catch on to 1.198, there is a scenario with the implementation of the target by 88.6% according to the model of the red "Shark". It is located near 1.175, so we use a sell strategy on pullbacks.

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Analysis of transactions in the EUR / USD pair

A sell signal appeared in the market last Friday, but it had to be ignored because it came when the MACD line was at the oversold area. Nonetheless, it set off a strong bearish trend, where if traders had short positions, it was easy to earn around 30 pips of profit.

Trading recommendations for June 21

Pay attention to the upcoming economic reports from the ECB and Bundesbank. Positive projections will help euro rally, while weaker data will resume the decline in EUR / USD. Then, in the afternoon, the Federal Reserve will hold a press conference, where if they announce future changes on monetary policy, dollar will continue to rise, while pound will collapse further.

For long positions:

Open a long position when euro reaches 1.1876 (green line on the chart), and then take profit around the level of 1.1942. Any rise in EUR / USD is going to be seen as a good opportunity to sell, so be careful when setting up transactions. And before buying, make sure that the MACD line is above zero, or is starting to rise from it.

For short positions:

Open a short position when euro reaches 1.1840 (red line on the chart), and then take profit at the level of 1.1775. Pressure will continue on the pair, and the breakout of yesterday's lows will form a new wave of decline in the market. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.