The Bank of England (BOE) may have the biggest event on tap, but something tells me that we’ll also see currency volatility on EUR/USD today.
Are you also seeing EUR/USD’s short-term uptrend?
Before moving on, ICYMI, today’s Asia-London session watchlist looked at EUR/GBP’s consolidation for a “trade the news” setup before the BOE’s policy decision. Be sure to check that out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- U.S. new home sales hit one-year low; prices soar
- Lagarde sees limited U.S. inflation spillovers to Euro area
- Fed’s Bostic sees 2022 rate liftoff, taper call in a few months
- Biden to meet with bipartisan senators to discuss infrastructure plan
- Asian shares tread water, markets eye U.S. inflation signals
Upcoming Potential Catalysts on the Economic Calendar:
- BOE’s monetary policy decision at 11:00 am GMT
- Final U.S. Q1 2021 GDP at 12:30 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
- U.S. core durable goods orders at 12:30 pm GMT
- Fed’s Bostic to give a speech at 1:30 pm GMT
- Fed’s Williams to give a speech at 3:00 pm GMT
What to Watch: EUR/USD
EUR/USD 1-hour Forex Chart
In a few hours, the BOE will publish its June policy statements. Markets believe that central bank members will sit on their hands, but that we could also see statements hinting of tapering or tightening in the foreseeable future.
While it’s tempting to look at GBP pairs, I’m also not discounting potential moves on other dollar pairs.
EUR/USD, specifically, has been on a slow uptrend since late last week. In fact, it’s currently testing its channel support near the 100 SMA on the 1-hour time frame.Today’s final U.S. GDP and initial jobless claims reports could energize the major dollar pairs.
Risk-friendly updates could push the euro higher against the safe-haven dollar, enough to boost EUR/USD to the 1.1985 area near the 200 SMA and the 38.2% Fib retracement of the last downswing.
However, if today’s events remind traders that the Fed is closer to tapering and/or tightening than its counterparts, then the dollar could continue to see currency strength across the board. EUR/USD could drop below the 100 SMA and areas of interest like 1.1885 and 1.1850.
