June is going to be a highly exciting trading month, which could set the stage for new trends in the forex market. We have got some major events this month like the upcoming U.K. referendum on June 23, the Fed meeting on June 14-15 and the U.S. jobs report tomorrow, supporting the arguments for or against an imminent rate increase by the Federal Reserve. Investors are looking ahead to the payroll data for May, while analysts expect fewer than 200K jobs. The U.S. dollar therefore lost momentum against most major peers on concerns tomorrow's jobs report may disappoint the market's expectations. Investors are holding back with any dollar positions ahead of the payroll data. Fed chair Janet Yellen said last week that a rate hike would be probably "appropriate" in the coming months, provided that there is no major hurdle in terms of economic data. However, we will know soon.
The ADP report, scheduled for release at 12:15 UTC could provide a foretaste of the non-farm payrolls figures.
Today, all eyes will be on the key meetings for OPEC and the European Central Bank. The ECB is not expected to change monetary policy and ECB President Mario Draghi will probably hold off on boosting stimulus. While the central bank is still struggling to meet its inflation goal, chances are that Draghi sounds less dovish this time, emphasizing that the economy is performing well. If the ECB even consider raising its economic projections, the euro could rally as a result. However, traders should bear in mind that the main focus will be on the upcoming U.S. data tomorrow which is why the performance of the U.S. dollar will also play an important role.
The ECB will announce its rate decision at 11:45 UTC, followed by the ECB press conference 45 minutes later.
As always, anything can happen and that is why we will prepare for breakouts to either side.
We see the currency pair trading between 1.1215/40 and 1.1115/1.11. If the euro is able to break significantly above 1.1240, it could rise towards 1.1290 in a next step. Next hurdles will then be around 1.13 and farther 1.1335. On the bottom side we expect the area between 1.11 and 1.1070 to act as a support for the pair. With a sustained break below 1.1060 we expect the euro to fall towards 1.0990 and 1.0830.
The British pound was finally able to gain some ground above 1.4385. If that support level is breached to the downside we see lower targets at 1.4330. The 1.4460-level could, however, act as a current resistance for the GBP/USD. Above 1.4465, upswings towards 1.45 and 1.4520 are becoming more likely.
Sterling traders should keep an eye on the release of the U.K. Construction PMI, due at 8:30 UTC and a speech by BoE Governor Mark Carney which is scheduled for 13:00 UTC.
Here are our daily signal alerts:
EUR/USD
Long at 1.1220 SL 25 TP 30, 110
Short at 1.1158 SL 25 TP 40, 100
GBP/USD
Long at 1.4465 SL 25 TP 25, 50
Short at 1.4385 SL 25 TP 50
We wish you good trades and many pips!
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