FOREX CHART ANALYSIS JUN 11 - ACTIONS FROM FED
The FED caused a lot of changes yesterday. Let's get updated on those changes to choose the most suitable forex trading strategies!
- The FED continued to dovish as expected, confirming it would maintain low interest rates for a long time until it was certain that the economy would recover. New policy instruments such as yield curve control (YCC) are still being considered, signaling readiness to act when needed.
- The Organization for Economic Co-operation and Development (OECD) has revised its forecast for the damage that the coronavirus pandemic could cause to the global economy today, and it is very bad. Specifically, the OECD said global GDP will shrink by about 7.6% by 2020, if there is a new outbreak, and if this does not happen then the figure is still very bad, is -6%. These new projections significantly exceeded previous projections of the World Bank (at -5.2%) and IMF (at -3%), reflecting that situation is quite serious.
- Worry of oversupply came back when the US Petroleum Institute reported late Tuesday that US crude supplies rose 8.4 million barrels in the week ended June 5.
- US inflation decreased by 0.1% over the previous month, as expected.
As a warning of the possibility of an increase in a broken channel only sooner or later and this happened very early. Currently, the price has approached the support zone of 107. The downtrend has lasted for 3 consecutive days so we expect the price to correct in this zone. However, do not encourage you to buy, because if the current resistance area is broken, the price could go to 106, so there are many potential risks. Instead, wait for a correction and sell on the downside. The potential price range is from 107.5 to 108.0.
EURUSD is showing signs of breaking the range we observe. The buying side is still quite strong. However, EURUSD is in a period of overbought and the price target is very low, so I do not encourage you to buy, because the adjustment may come unexpectedly. Wait for selling opportunities when the signals of reversal decreases.
The price pulled back as soon as it penetrated the 1.275 zone, creating a false-break. A very significant bearish pattern has also appeared on the daily chart. If you use oscillating indicators, you can easily see that the market is overbought and divergence signals have appeared, which supports a sell order, at least in the short term. The target is zone 1.262. Remember to set Stop Loss carefully above the newly created peak.
As we warned you not to bottom fishing USD/CAD, yesterday we had a standard Stop Loss sweep. This Stop Loss sweep has also generated bullish signals, and makes long orders less risky. Therefore, currently someone who reverses the trade may consider the order. The target will be zone 1.36.
The price has re-tested the peak of 0.70 but once again it could not cross and create further bearish signals, which makes us more confident in the selling view. You may consider setting a short-term goal at 0.690. If you want to go further, you must wait for signals from price action.