QOver in Europe, Germany’s Preliminary HICP rates for May are set to be released later on today. The current expectations by economists are for the preliminary HICP rate to accelerate to 2.7%, from 2.4%. In such a scenario, it may be implied that inflationary pressures remain persistent in one of Europe’s largest economies. Thus, potentially increasing pressure on the ECB to maintain current interest rate levels for a prolonged period of time, rather than cutting rates in their next meeting. In such a scenario, we may see the EUR gaining.

In the US Equities markets, Google (#GOOG), Amazon (#AMZN) and Apple’s (#AAPL) lobby group, are against India’s EU-like antitrust proposal according to Reuters. The bill may lead to increased regulation for the aforementioned companies, in addition to opening up their business practices for potential probes and fines should they be in breach of the proposed law. Hence, should the future revenue for the aforementioned companies, from the Indian market be ‘threatened’, it could weigh on their respective stock prices.

A bulk carrier was attacked yesterday whilst sailing through the Red Sea. According to Bloomberg, the vessel was targeted with three missiles near the Yemeni city of Hodeida. The naval vessel appears to be taking on water and could be on track to sink near its last reported location. The continued interruption of the vital trade artery near the Suez Canal could lead to a resurgence of market concerns in regards to the supply chain of oil, and thus may provide some support for oil prices.

On a technical level EUR/USD appears to be moving in a sideways fashion. We maintain a sideways bias for the pair and supporting our case is the smoothening out of the 50MA and 100 MA lines, in addition to the Bollinger bands also narrowing which imply low market volatility. Furthermore, the RSI Indicator below our chart currently registers a figure near 50, implying a neutral market sentiment. For, our sideways bias to continue, we would require the pair to remain confined within the 1.0810 (S1) support line and the 1.0892 (R1) resistance level. On the flip side, for a bullish outlook, we would require a clear break above the 1.0892 (R1) resistance line, with the next possible target for the bulls being the 1.0955 (R2) resistance line.Lastly, bearish outlook, we would require a clear break below the 1.0810 (S1) support line, with the next possible target for the bears being the 1.0725 (S2) support level.  

AUD/USD appears to be moving in a sideways fashion. We maintain a sideways bias for the pair and supporting our case is the flattening out of the 50MA and 100MA lines in addition to the narrowing of the Bollinger bands, which all imply low market volatility. Further aiding our aforementioned argument, could be the RSI indicator below our chart which currently registers a figure of 50, implying a neutral market sentiment. For our sideways bias to continue we would require the pair to remain confined between the 0.6590 (S1) support level and the 0.6670 (R1) resistance line. On the flip side, for a bearish outlook, we would require a clear break below the 0.6590 (S1) support level, with the next possible target for the bears being the 0.6520 (S2) support line. Lastly for a bullish outlook we would require a clear break above the 0.6670 (R1) resistance line, with the next possible target for the bulls being the 0.6735 (R2) resistance level.

Other highlights of the day

Today we note the release of the UK’s Nationwide house prices rate for May, followed by Germany’s Gfk consumer sentiment figure for June and France’s consumer confidence figure for May. Later on in the day we get Germany’s Preliminary HICP rates for May, followed by the US weekly API crude oil inventories figure. In tomorrow’s Asian session, we get Australia’s building approvals rate for April. On the monetary front we note the speech by New York Fed President William’s later on today, in addition to the release of the Fed’s beige book. In tomorrow’s Asian session, we note the speeches by Atlanta Fed President Bostic and SNB Chairman Jordan.

Technical Analysis

EUR/USD H4 Chart

• Support: 1.0810 (S1), 1.0725 (S2), 1.0655 (S3)
• Resistance: 1.0892 (R1), 1.0955 (R2), 1.1015 (R3)

AUD/USD H4 Chart

• Support: 0.6590 (S1), 0.6520 (S2), 0.6445 (S3)
• Resistance: 0.6670 (R1), 0.6735 (R2), 0.6810 (R3)