General market theme
Limited price action in the major money markets on Friday with the instruments we monitor in our daily report showing nothing new in terms of news or fresh developments. However we must not fail to note down the important of last week’s events with BoE’s comments on potential easing being the most important while rumors have been going around that the ECB might do so as well. This adds to the uncertainty surround the UK and the whole European region at this time and as markets hate uncertainty the sentiment for both the euro and the pound remains grim.
The dollar will come to focus this week though with two important events coming up in the next 5 days: the release of the minutes from the previous FOMC meeting and the upcoming NFP report on Friday. Even though we expect quite a rebound in the employment levels this month trades know that a further rate hike this year seems unlikely in the midst of the uncertainty that the Brexit referendum has brought upon us. However the dollar could enjoy some short-term gains offering interesting trading opportunities.
Price action highlights
The euro found it hard to overcome the 1.1160 highs on Friday and after trading for a second day in a row to move above the 200-period moving average that lies around that area it ended the week a bit lower. The momentum to the upside seems to be dying out and the euro could face some losses this week ahead of the NFP report and the key area to watch is the 1.1100 support. A possible break below it would open the door for the euro to look towards the 1.1000 lows and possibly even lower if the correction picks up pace.
The cable remains unpredictable as price action continues to be erratic and totally news-dependent, with the political uncertainty in the UK becoming even worse the domestic currency struggles to find its footing in the post-Brexit era and any analysis at this point can prove useless from day to day. On a more general note if the dollar picks up pace this week then the pound will most likely move towards its recent lows once again as the US currency will dominate flows ahead of the important US-related events ahead of us.
Focus of the day
With the US markets closed for the Independence Day holiday there’s only a couple of interesting events on the calendar today but we doubt whether they will affect the price action of the day ahead as investors are focused more on the dollar rather than anything else.
Disclaimer: The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.
InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.