Forex Insight 19-June, Tuesday

June 19, 2018

This week News Sites are flooded with Trade War between US and China. U.S.-China trade-war concerns intensified after U.S. President Donald Trump threatened China with fresh tariffs. Following are the insight for the major Currencies:




The US Dollar

  • The U.S. dollar rose to its highest level in nearly a year against its rivals, as U.S.-China trade-war concerns intensified after U.S. President Donald Trump threatened China with fresh tariffs.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.31% to 94.70 after trading as high as 94.94.

  • EUR/USD fell 0.46%, while GBP/USD fell 0.60% as the latter pair continued to come under pressure ahead of the vote on the Brexit Withdrawal bill slated for Wednesday, and the Bank of England meeting due Thursday.

  • USD/CAD rose 0.57% to C$1.3277 as oil prices fell heavily, weighing on the loonie, amid concerns major oil producers were set to lift output at OPEC's meeting later this week.



The Great Britain Pound

  • According to preliminary figures for GBP futures markets from CME Group, investors added more than 2.6K contracts to their open interest positions on Monday from Friday’s final 240,369 contracts.

  • GBP/USD: Recent price action in Cable has been amidst rising open interest although volume decreased significantly. 

  • The likeliness of deeper pullbacks remains well on the cards with the next relevant level being the 1.3040 area, November lows.

The Euro

  • European Central Bank (ECB) President Draghi spoke in Portugal today, emphasizing the need for patience in the timing of the first rate hike. 

  • The ECB met last week and announced an end to its bond purchasing program by the end of the year. 

  • The central bank surprised markets by moving to calendar-based guidance for rate hikes and communicated intentions to keep rates unchanged well into the summer of 2019. EUR/USD posted a single-day loss just shy of 2% as a result of the meeting.

  • Last week's one-day drop in the exchange rate patently changed the near-term technical outlook for EUR/USD, confirming a continuation of the bearish downtrend after a brief correction higher from a low posted in late May. On a weekly chart, the pair printed a bearish engulfing candle last week – this invalidates the prior morning star candlestick pattern, which is considered to be a bullish reversal pattern.











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