USDJPY. Japan Inflation Report (30 June 23:30 GMT)

At the latest Bank of Japan meeting it was decided that there is no need for any additional economical stimulation as the situation is steadily improving. However, since the decision was made prior to “Brexit” and a consequent dip in Yen’s price, this week the attention of traders is going to turn to the report on Inflation.

If the Inflation levels turn out to be higher than expected, it will likely strengthen the Yen.    

“Brexit” had a massive impact on majority of foreign exchange assets. Due to the fact that Japanese Yen is one of top safe-haven assets, during the uncertain periods traders tend to buy either JPY or gold. Japanese Yen has significantly strengthened against USD and even psychologically important level = 100 yen/dollar was broken for a short period of time.

There was a downward trend on USDJPY D1 chart and the results of “Brexit” only strengthened it (indicator of technical analysis “Awesome Oscillator” proves it). Starting from 2016 Japanese Yen strengthened almost by 20%. If such political uncertainties will continue it will have a positive impact on JPY, because lots of investors will reallocate their assets in order to avoid any risks.

EURUSD. US GDP Report (28 June 12:30 GMT)

After the decision to leave the refinancing rate unchanged, the market participants are looking at the three key economic indicators – the labour market, inflation and GDP. At the moment, the US are having no problems with the growth of GDP and the economy is developing steadily. However, keeping the paces up is a very important for the health of the economy.

Should the GDP data turn out to be disappointing it will have a negative effect on the US dollar.

Apart from US GDP data further “Brexit” issue will be massively discussed next week. Will EU fall apart after the “Brexit” or not – that’s the key factor. The Leader of the National Front (France) Marine Le Pen is calling for “Frexit”. Most likely such countries as Belgium and Finland will also use their right to hold a referendum.

Sure, there are still a lot of things to be done and England is yet to leave European Union, cause the parliament has to take this decision, but overall stability of European Union suffered and investors do not like it.

EURUSD chart:

Sure. British Pound and European currency decreased the most, but part of rate decrease has already been considered by the market participants. Even though the rate decrease was massive it did not cause any other issues.

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Withdrawal of the United Kingdom from the European Union (“Brexit”)

This week, on June 23rd, British voters will decide whether the country will withdraw from the European Union. Many experts believe that should Britain decide to leave the Pound will wind up under pressure, at least short term. In any case, high volatility is inevitable, particularly for currency pairs containing the British Pound.

According to the latest polls the amount of supporters of Britain leaving European Union has significantly increased. Some politicians who support this choice have already came up with a plan of what to do next. First of all, it will be the abolition of the rule of EU law over the national law. Secondly, migration policy will be changed and only qualified international specialists will have a chance to stay in UK. Finally, UK will save up to 100 million pounds as they will no longer have to pay their fees and contributions to the EU and they suggest to spend it on medicine and other problematic fields of economy.

Overall situation remains complicated and unclear. There will be no significant economic data published this week, all the attention will be concentrated on referendum. If UK citizens decide to leave the European Union it will have a massive impact on GBP as well as many other currencies, like EUR, JPY and gold.

EURGBP chart:

During the last four trading sessions the rate decreased on EURGBP D1 chart. But according to the indicator of technical analysis “CCI” this rate movement should not be considered as a new downward trend. Traders should be very accurate with technical analysis this week, as fundamental factors will significantly prevail.

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Trading Signals

2016-06-21

10.00

 

EUR/USD                    Duration   1 h.

 

GBP/USD                    Duration    1 h.

EUR/JPY                       Duration    1 h.

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Japan’s Manufacturing PMI

USDJPY. Japan’s Manufacturing PMI (June 23rd 02:00 GMT)

Last week the Bank of Japan against all expectations decided not to widen the scope of measures for economic stimulation. The decision was dictated by the excellent economic indicators coming in lately: growing inflation, low unemployment rate, economic activity improving steadily. The Yen strengthened even further once the news of the decision were made public.

Now the attention of traders is focused on reports associated with changes in GDP. If the Manufacturing PMI report does not disappoint, Japan’s national currency will get yet another impulse to grow.

Other field of Japanese economy continue developing at a moderate pace. Industrial production data was published last week and it was a bit better than the forecast:

Due to “Brexit” and possibility of UK leaving EU, high volatility is expected on all the assets that includes JPY, because it is a “haven-asset”.

USDJPY chart:

According to the technical analysis, there is still a downward trend on USDJPY D1 chart and “Parabolic SAR” and “Stochastic” prove it. But the same as it is with EURGBP, fundamental factors will prevails this week.

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Trading is my new passion

On June 13, 2016, IQ Option and “The Berlin Wall” of football – legendary Napoli and Real fullback Fabio Cannavaro – signed a cooperation agreement. With the signing of this agreement, one of the best-ever players enters the exciting world of trading via the IQ Option platform.

“If you had told me I’d become a trader, I would’ve been very surprised,” says Cannavaro. “But entering the world of options trading turned out to be much simpler than I thought.” He goes on to claim that today IQ Option is the most straightforward and accessible way to enter the world of trading.

Cannavaro singles out IQ Option for the technological advantages of the platform as well. “Personally, I was attracted by IQ Option’s innovativeness and use of high-level technologies,” he continues.

“Now I am at a new stage in my life, first making the switch from player to coach and now taking up binary options trading to begin my career as a trader.”

Years in professional sports helped Fabio Cannavaro to deal with risk and make responsible decisions. “A long time ago I understood that to be the best you have totake responsibility. You should be sure in all you do in order to reach success. My last choice was a pivotal one in my career – to become a coach, and the consequences of my actions grew larger.”

As a coach he has been responsible for uncovering the talent of a player and getting a feel for his potential. In his words, “A long time ago it was the coach who saw that I was destined to be a champion. Now years later, I see strong potential in IQ Option and envision this company as a leader in financial markets.”

The Italian champion knows from his own experience what it is to make bold choices. “If you have much at stake, you need someone to rely on. The world of trading is a game of high risks and high profits, and here I rely on IQ Option.”

“I am back in the game.”

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EURGBP. Eurozone’s Inflation Report (16 June 9:00 GMT)

Inflation is the most problematic aspect of Eurozone’s economy at the moment. At the latest press-conference the head of the ECB Mario Draghi stated that it’s quite possible that inflation levels will remain low for the foreseeable future, which means the refinancing rate (which is now zero points) is highly unlikely to be raised.

Now all the attention is on the CPI of Eurozone:

If the inflation levels next week turn out to be disappointing, it will cause the Euro to depreciate.

It is important to take into the consideration the “Retail Sales” report that was published in the beginning of June (has a massive impact on CPI) as the numbers were significantly lower than the expectations:

..but the level of GDP is increasing and that might help the government to solve specific economic issues in the future:

EURGBP chart:

Despite the weak economic data from Eurozone trader consider the “Brexit” and all the possible risks behind it. That is why British Pound is losing positions in the last several days. There is a clear upward rate movement on the price chart and indicator of technical analysis “Awesome Oscillator” proves it.

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EURUSD. Eurozone’s GDP report (7 June 9:00 GMT)

Last week the ECB had its regular meeting and resolved not to change the deposit facility and interest rates, which tells us there’s trouble with accelerating inflation. Additionally, Mario Draghi made a statement at the press-conference that the inflation rate is forecast to stay low.

CPI is the key economic indicator of the Eurozone economy at the moment, but it remains in a negative zone and it has a massive negative impact on the development of European economy. What is more, it means that the idea to cut the rates did not bring the expected results, because majority of economic data is getting worse:

Retail Sales for April was much worse that expected:

..what is more, Producer Price Index of Eurozone for March was also much lower than the forecast:

However, since the figures from the US labor market aren’t demonstrating a positive dynamic either (despite the fact that Unemployment Rate decreased from 4.9% to 4.7%, NonFarm Payrolls Results were almost 80% worse compared to the previous month), the Federal Reserve committee may be forced to hold off on raising the refinancing rate.

The next important economic data to watch for would be the Changes in the Eurozone’s GDP. If the results turn out to be better than expected, the price of Euro expected to go up.

EURUSD chart:

There was a long downward trend on EURUSD D1 chart, but after the published data from US labor market USD started to decrease against EUR significantly and upper line of Bollinger Bands was broken. It means that correction is possible and further downward rate movement is possible.

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EUR/GBP: Eurozone Interest Rate Decision (2 June 14:45 GMT +3)

The interest rate of the Eurozone remains on very low (0% at the moment). Looks like the monetary policy designed to boost inflation did not bring expected results. Now delaying the rate hike any further will not benefit the Eurozone economy.

If the interest rate remains the same, it will have a negative impact on EUR. Additionally, press-conference of the head of European Central Bank Mario Draghi will be very important.

Apart from the interest rate decision traders should pay extra attention on the economic reports that are related to the CPI of Eurozone. CPI and Unemployment Rate data will be published on May 31st, 12:00 GMT +3:

..Producer Price Index will be published on June 2nd at 12:00 GMT +3:

..Retail Sales data will be published on June 3rd, 12:00 GMT +3:

CPI data is still very poor and if there are no improvements it will have a negative impact on European currency.

But there are difficulties in the UK economy as well. Soon there will be “Brexit” referendum and some experts believe that UK leaving EU is a possible scenario. British Pound is under high pressure due to such uncertainty.

EURGBP chart:

There is a downward trend On EURGBP D1 chart and the indicator of technical analysis “Parabolic SAR” proves it. What is more, the lower line of Bollinger Band is broken regularly and after that there is a minor correction and a further downward rate movement on a price chart.

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