EUROPEAN FX HEADLINES: WEEK OF JUNE 16
EURO-ZONE ECONOMIC CALENDAR
There are no key events on the calendar for the Euro on Wednesday, June 19.
UK ECONOMIC CALENDAR
The Bank of England held its key rate at 0.50% and its Asset Purchase Target at £375B at its June 6 meeting, and the British Pound only saw a modest bump once the decision was released. If there’s been one thing that’s true about the BoE in recent months, it’s that it remains very patient as it watches the economy’s growth and inflation environments develop. With data on a bit of an upswing leading up to the meeting, a greater willingness to keep policy on hold is likely to be reflected in the Minutes, which should be supportive of a stronger British Pound on balance.
SWISS ECONOMIC CALENDAR
There’s a chance for some Swiss-borne volatility this morning with the ZEW Survey (JUN) due. The ZEW Survey, while lacking a forecast, appears to be losing momentum, with the May print of 2.2 representing a significant decline from the April reading of 20.0. A return back to negative territory could help ignite speculation that might weaken the Swiss Franc ahead of the Swiss National Bank’s quarterly monetary policy meeting on Thursday. A signficant deviation away from the prior – on either side – will inevitably feed into speculation of the question. “Will the SNB raise the EURCHF floor from Sf1.2000?”
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— Written by Christopher Vecchio, Currency Analyst
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AUDUSD – AUDUSD is assessed to be in large (monthly) channel pattern. Although we have seen a mild recovery from levels close to .9295 (the 261.8% extension level from 1.0630-1.0120) a full AB=CD formation target is not located until the channel base at .8885. It should be noted that commodity based currency have a tendency to extend to as far as 423.6%. This is not seen until at .8470. The overnight rally was sold and the dip bought yesterday resulting in AUDUSD posting the 3rd negative daily performance in succession. However, price action has broadly stayed within Tuesdays range highlighting the lack of momentum in the selloff. This decline stalled close to .9454, the 61.8% pullback from .9665-.9324, and an intraday double bottom has been posted. Although we need to see a break of .9516 to confirm the bullish momentum, this has resulted in the bias being for higher levels today. Our call is a cautious Buy from the 7am open with a stop of .9450. The profit targets are .9516, .9550 and towards .9650
The risk would be selling through a stop of .9450
Sweden’s economic confidence improved more than economists expected in June, but stayed well below the long-term norms suggesting that growth in the domestic economy is weaker than normal, latest data showed Wednesday.
The headline business tendency indicator climbed to 94.5 in June from 91.8 in May, which was revised down from 91.9, data from a survey by the National Institute of Economic Research revealed. Economists had forecast a more modest rise to 92.8. The index, however, continued to stay below its long-term average.
In the business sector, Swedish manufacturers were less downbeat about their business conditions in June, with the relevant sub-indicator rising to -12 from -15 in the previous month. The index was forecast to rise to -10.
Confidence among Swedish households also recorded a notable improvement during the month. The index advanced to 4.3 from May’s 3.6, but was below 4.5 forecast by economists.
The confidence indicator for the building and civil engineering industry was largely unchanged in June, and remained far below the historic average. Meanwhile, the measure of sentiment among retailers gained more than 4 points, and the indicator for the private service sector rose by 1.5 points.
The material has been provided by InstaForex Company – www.instaforex.com
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