On Tuesday the 9th of July, trading on the euro closed slightly down. All the majors were trading down against the US dollar, which rose sharply following a positive jobs report in the US on the 5th of July.
Growth on the euro saved the EURGBP cross from decline. Here, bulls bought up the euro amid Brexit uncertainty and expectations that there could be a decline in British GDP for Q2.
Day’s news (GMT 3):
- 11:30 UK: GDP (May), industrial production (May), manufacturing production (May), trade balance (May).
- 17:00 Canada: BoC interest rate decision and rate statement.
- 17:00 US: wholesale inventories (May), Fed’s Chair Powell speech.
- 17:15 Canada: BoC press conference.
- 17:30 US: EIA crude oil stocks change (5 Jul).
- 21:00 US: FOMC minutes.
The first half of my forecast went as planned. The second didn’t go as smoothly, as the bulls were chipping away at the euro crosses. At the time of writing, the euro is trading at 1.1217. The pair is trading around the LB balance line.
I reckon that the bears will go on the attack once the bulls on the euro crosses run out of steam. Judging by the channel and the three lows shown on the chart, my target for today is at 1.1180, with yesterday’s target of 1.1175 also still in play.
Traders will have their eyes on Fed Chair Jerome Powell’s speech. Today, he will testify before the House Financial Services Committee, and on Thursday before the Senate Banking Committee. Traders will be listening out for hints on how big a rate slash to expect at the end of July: 25 or 50 base points.