It is like deja vu all over again.  Yesterday hawkish Fed saw the dollar rally and then reverse lower.  A hawkish ECB saw the euro make a new session high and then turned around and traded below yesterday’s lows.
The ECB meeting was never live in the sense that it was going to change interest rates, and it did not surprise on this count.  The ECB’s statement was more detailed and hawkish than expected.  It confirmed it would complete its purchases in December.  It indicated provided details of the amount it would taper by in Q4.  It would taper by cutting the 30 bln a month that is it will purchase through September to 15 bln a month.  This means it will purchase 45 bln euros of bonds in Q4.  Many had anticipated about 30 bln, but the difference is really inconsequential.
The ECB reaffirmed that it will continue to reinvest the proceeds of maturing issues for “an extended period of time.”   It also gave some clearer sense of the first rate hike by saying that rates will “remain at their present levels at least through the summer of 2019.”  When a newswire headline claimed this ECB meeting was live last week, the market brought forward the first hike to mid-year from Q4 19.
The ECB staff shaved this year’s GDP forecast to 2.1% from 2.4% and left the 2019 and 2020 forecasts unchanged at 1.9% and 1.7%.  The inflation forecasts were lifted for 2018 to 1.7% from 1.4%.  It sees headline CPI at 1.7% in 2019 as well from 2.104.  The 2020 forecast was unchanged at 1.7%.
The ECB appears to have taken itself out of play by providing some many details and pre-commitments.  There was a violent reversal in the euro after it was bid through last week’s highs to see $1.1850 for the first time in nearly a month (May 16).   A close below yesterday’s low near $1.1725 would confirm the potential key reversal.  The next key chart point is near $1.1640.   – MARCTOMARKET.

Markets Today: Euro trashed on ECB hike delays

The ECB announced today, as anticipated, that their QE program will finish at the end of the year. But markets weren’t quite expecting the anticipated delay in raising rates – which could be late in 2019. Read More @ https://business.nab.com.au/markets-today-euro-trashed-on-ecb-hike-delays-30157/

US DATA IMPROVES FURTHER -US retail sales post biggest gain in six months

  • U.S. retail sales increased more than expected in May as consumers bought motor vehicles and a range of other goods.
  • Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.5 percent last month.
  • The strong retail sales report added to data ranging from the labor market to manufacturing and trade in suggesting the economy was regaining momentum in the second quarter. Read More @ https://www.cnbc.com/2018/06/14/us-retail-sales-may-2018.html?__source=sharebar|twitter&par=sharebar

WHAT IS THE USD INDEX SAYING?

USD eyeing 95 to 96 – be cautious if you are trying to short the USD; money management is the key. Follow the 10/2 rule and never break those rules. ECB hawkish statement didn’t convince the market without winding down the QE – EURO crashes however is never a better time to buy EURO then before – look for next RSI and start the DCA technique (Dollar Cost Averaging).

TODAYS NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES.

  1. BOJ will address the market and JPY PAIRS will start its move. Be cautious if you are trading the EURO.
  2. 2.00pm – German news WPI – It’s a leading indicator of consumer inflation – when wholesalers charge more for goods and services the higher costs are usually passed on to the consumer. Expected to be good.
  3. 5.00pm – EURO inflation focus – could be another round of sell-off or buy back euro. Be cautious.
  4. 5.00pm – EURO will release their Trade Balance and is expected to be good.
  5. 8.30pm – Canada will release their Foreign securities and Manufacturing sales and is expected to weaken further. More downside for CAD awaits.
  6. 8.30pm – US will release their Empire state mfg data and is expected to be weak.
  7. 10.00pm – Prelim Consumer and Inflation expectation and is expected to be the same or good. USD prepares to go higher.

High Risk Investment Warning:

Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary.

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