FX.co ★ Trading plan for 26/06/2018

Risk aversion is shifting to Tuesday, although this does not mean any stronger moves for the currency market. Nevertheless, there is an atmosphere of fear that US trade disputes with the rest of the world may eventually affect the moods of business and consumers, inhibiting recovery. Stock markets in Asia do not interrupt the downward series and the Chinese Shanghai Composite loses 0.8%. Only Japanese Nikkei are distinguished, where they were able to return just above the reference point.

At the currency market, the USD / JPY pair managed to save 109.30 and bounced slightly. EUR/USD has stopped picking up against resistance at 1.1720 and is now slightly receding. After the night, the NZD, NOK and SEK are the weakest, although the volatility of the pair is small. Investors apparently do not want to react rashly to the mixed signals coming from China and the USA.

Crude oil found itself in ticks of optimism after OPEC's decision and deterioration of market sentiment. WTI yesterday corrected Friday's rally, but today we have consolidation close to 68.3 USD / b. Copper remains at 2.5 months lows. Gold still does not reveal the safe-haven status and drifts lower towards the 6-month period bottom.

On Tuesday, 26th of June the event calendar is light in important data releases, but the global investors should keep an eye on Consumer Confidence and Richmond Fed Manufacturing Index data from the US. There are two speeches scheduled for today as well: first from MPC Member Ian McCafferty and the second from FOMC Member Raphael W. Bostic.

EUR/USD analysis for 26/06/2018:

The German index of Ifo entrepreneurs' moods in June fell to 101.8 from 102.2, in line with the median of forecasts. The modest improvement in the index of future expectations is satisfactory in the components - at 98.6 out of 98.5 and the forecast 98. This is the first time since November last year when the index has not fallen. The EUR/USD pair gained after data was published and moved higher towards the level of 1.1660. The move suggests that part of the market was afraid of a deep fall in the main index, which was justified after a disastrous series of readings of industrial production and orders in previous weeks.

Today's data from the US in form of Consumer Confidence figures might impact the EUR/USD rate. The market participants expect only a slight drop in confidence from 128.0 to 127.6. Any significantly better or worse data than expected might increase the volatility on the EUR/USD.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has retraced 61% of the last swing down and it looks like it topped at the level of 1.1720. This Fibo retracement level is located just inside of the important technical resistance zone between the levels of 1.1719 - 1.1740. The trigger for the bulls to break out higher above this zone and continue the correction might come after the US data will be disappointing for the market participants. Please notice, the momentum stays strong, but the market conditions are now overbought at this time frame, so short-term correction or consolidation is now expected.