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FxPro Forex Analysis: EURUSD and EURJPY Analysis – June 6, 2018

The Euro is strengthening after comments by ECB speakers have hinted that the central bank may look to announce an end to Quantitative Easing (QE), possibly as early as at the June meeting. Coordinated comments made by Praet, Hansson, and Weidmann all indicate a potentially upbeat projection by the ECB with inflation rising back to its target. In particular, Peter Praet, a member of the Executive Board of the ECB, gave a strong hint that the June meeting would see the ECB signal the end the QE programme in September. A rate hike was expected for Q3 2019 but this is now being brought forward with the probability of a hike in June 2019 rising to 70%.

EURUSD
On the 4-hourly chart, EURUSD has broken out of the descending trading channel and has formed an inverted head and shoulders pattern with a measured target of 1.1920 with resistance at 1.1775 and the 38.2% retracement of the April highs at 1.1850. A reversal below the neckline at 1.1715 would negate the bullish outlook and the pair could continue to the downside with support at 1.1660.

EURUSD(£)H4-6Jun

EURJPY
The recent weakness in JPY has helped the EURJPY pair stage a sharp rally. In the 4-hourly time frame, EURJPY has also formed and inverted head and shoulders pattern with a measured target of 132.70. Upside resistance is likely at 129.50 and the 61.8% retracement from the highs in April at 130.10. On the flip-side, a reversal should find support at 128.70 and then 127.70.

EURJPY(£)H4-6Jun



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