Intraday Analysis 22nd June 2018

The Bank of England’s monetary policy meeting held yesterday saw officials keeping interest rates steady at 0.50% as widely expected. However, this came amid three dissenting votes including that of the BoE’s chief economist, Andrew Haldane.

The central bank also signaled that it would begin to unwind its bond purchases once interest rates hit 1.5% and laid the groundwork for a potential rate hike at the August BoE meeting. The British pound initially fell ahead of the BoE meeting but managed to post a strong rebound thereafter.

Economic data for the day will see the European trading session coming up with the flash manufacturing and services PMI figures for the month of June. Business  activity is expected to remain more or less at the same levels from May.

The OPEC meetings conclude today with possibly a statement. Investors will be looking to see whether the oil producing nations have managed to reach an agreement on oil production levels.

Data from Canada will see the release of inflation and retail sales figures. Economists forecast that inflation increased 0.4% on the month, accelerating from 0.3% the month before. Core retail sales are forecast to rebound, rising 0.5% on the month, following a decline of 0.2% previously.

EURUSD intra-day analysis

eurusd

EURUSD (1.1614): The EURUSD currency pair was seen holding up above the support level of 1.1539 following a brief intraday decline to the support zone. The daily chart is signaling a possible bullish rebound with the Stochastics posting a higher low. The resistance level at 1.1730 is likely to be the upside target for a near term retracement to the losses. On the 4-hour chart, price action is also signaling a possible rebound unless the EURUSD dips lower once again. A close above 1.1610 level could trigger the move to 1.1730 following a move toward the 1.1846 – 1.1824 level of resistance.

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USDJPY intra-day analysis

usdjpy

USDJPY (109.97): The USDJPY currency pair posted strong declines following the retest of the resistance level at 110.62. The declines are likely to continue with a retest of the major trend line which could offer some short term support. A breakout below this major trend line could keep the USDJPY currency pair biased to the downside. Support at 109.57 – 109.43 is the next downside target. However, with the Stochastics oscillator signaling a possible reversal, we could expect to see a lower high being formed ahead of further declines.

XAUUSD intra-day analysis

xauusd

XAUUSD (1268.25): Gold prices were seen posting a modest rebound after price fell sharply to fresh lows of 1262.50. Any reversal is likely to be seen with the resistance at 1274 holding the gains. We expect gold prices to continue consolidating below the 1274 handle with the potential to post further declines on a close below the 1262.50 lows formed recently. To the upside, a close above 1274.50 could signal a move toward the 1282.50 handle.

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About the Author
“John Benjamin Resident Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.”
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