Trading plan for 22/06/2017

Trading plan for 22/06/2017:

In the last few dozen of hours, the US dollar lost momentum, and now it is dominated by the Pound Sterling and supported by the Reserve Bank of New Zealand. USD/JPY is moving back towards 111.00 and EUR/USD is trading around 1.1170. Meanwhile, precious metals are taking advantage of Dollar's weakness. Silver has grown by 1% and Gold is balancing on the 200-session moving average, having risen to $1,254 per ounce. After yesterday's sharp fall to 7-month lows, the Crude Oil price has bounced slightly to trade at $42.50 a barrel.

On Thursday 22nd of June, the event calendar is light in important economic news releases, but the global investors will pay attention to Retail Sales data from Canada and Unemployment Claims data from the US. Moreover, later during the US session, FOMC official Jerome Powell will give a speech.

EUR/USD analysis for 22/06/2017:

The Unemployment Claims data from the US are scheduled for release at 12:30 pm GMT and market participants expect jobless claims to rise slightly to a seasonally adjusted 241k for the week through June 17, up to 4k from the last week's number. That leaves claims close to the multi-decade low of 227k, which was set earlier in the year. The Unemployment Claims is a leading indicator and if it stays close to the lows, then it is a clear bullish signal for the job market. This means, that if the expected number is correct, then today's release will strengthen the view that employment growth may lead to a faster rate of growth in the months ahead. The Unemployment Rate in the US is already at record lows of 4.6%, but the problem seems to be in persistent lack of increase in the average wages growth.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The bulls failed to break out above the golden trend line at the level of 1.1211 and the price reversed towards the technical support at the level of 1.1130. The volatility is so far limited, so the market is trading inside of a range marked by this two levels. The market conditions are oversold, but the momentum indicator stubbornly refuses to move above the fifty level. The most important support is still at the level of 1.1075 and violation of this level might lead to gap fill.

USD/CAD analysis for 22/06/2017:

The Retail Sales data from Canada are scheduled for release at 12:30 pm GMT and market participants expect a decrease in sales from the level of 0.7% to 0.3% in the reported month. As a leading economic indicator, retail sales gauge the goods sold at retail outlets last month. Rising consumer spending fuels economic growth, confirms signals from consumer confidence and may spark inflationary pressures. However, in the current economic situation, the retail sales volatility is not big enough to initiate a discussion regarding a potential interest rate hike by the Bank of Canada due to the inflationary pressures.

Let's now take a look at the USD/CAD technical picture at the H4 timeframe. The price is trading just at the level of 200 days moving average at 1.3333, but on the H4 time frame, it is still below the average. Moreover, the price is testing from below the golden trend line from February lows, so it might get rejected here, especially as the market conditions are now starting to be overbought a little. The key level to the upside is the resistance zone between the level of 1.3387 - 1.3408. Weak data from the Canadain economy might trigger an attempt to test this level. On the other hand, better than expected data might cause a move lower towards the next technical support at the level of 1.3309 and 1.3222.

Market Snapshot: EUR/JPY is not strong enough to break out

After a 200-pips rally from the technical support zone, the price of EUR/JPY was capped at the level of 124.64. The price has managed to violate the golden trend line, but the breakout was false and now the price got back to the range. The most important support is still the area between the levels of 122.53 - 123.26 and only a sustained impuslive sell-off might initiate the attempt to fill the French Elections gap.