Alpesh Patel
InvestingBetter.com
General market theme
On Friday volatility remained elevated in the major currency instruments but even though we’ve received fresh data from Europe and the US the majors continued trading within their pre-established formations. The better than expected UK Retail Sales did little to help the Pound that before the end of the day plummeted when news of the upcoming Brexit referendum hit the wires.
This week the focus will turn mainly on the Euro as investors are expecting a host of important data from the Eurozone that will offer fresh stimulus to traders. The release of the flash PMI reports starting today will provide fresh insight to how the Euro area is coping with the elevated volatility in the financial markets, the low oil prices and the expensive Euro rate. Expectations are set for a bearish round of figures that will put the Euro under pressure again.
Price action highlights
The Euro ended the week without much change trading between the 1.1060 and 1.1140 levels waiting for fresh stimulus, the previous decline has halted for the time being but we’re seeing no signs that the Single currency will attempt a correction to the upside. To the contrary as we mentioned above the bias for the Euro is bearish and if today’s PMI reports confirm analysts’ expectations then we could see a further decline with the 1.1050 area as the prime target.
The Cable came under pressure on Friday when the referendum dates were made public and traders turn to safer havens as the polls still show a mixed outlook for the voting outcome. Expectations were that the referendum wouldn’t take place so soon and given the lack of a clear majority investors looked to limit their exposure on the Pound and the same is taking place this morning with the currency testing the 1.4200 support area.
Focus of the day
Traders’ attention will be focused on the Euro and the release of the flash PMI levels from the Euro area as we discussed above. There are no other important reports pending for release today so any trading opportunities will have to revolve around the Euro and the FTSE 100.
Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts. 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.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.