The USD Was Subject to Massive Sales (Weekly Review)

The absence of a trade agreement between the UK and the European Union no longer worries investors, and the continuing hope that the parties will come to an agreement on controversial issues has contributed to further profit taking on short positions in the GBP. Thus, the past week was quite successful for the bulls, and the GBP/USD was able to close the week with growth to the resistance of 1.2725.

The GBP received additional support due to large-scale sales of the USD, against which it was able to break through important resistance and renew highs and the single European currency, which was also facilitated by the expansion of the asset purchase program from the European Central Bank. However, even though the EUR prospects look better, the bulls still have to fight for important levels of resistance, and the fight may not be easy.

Universal optimism for a quick recovery of the world economy after a forced pause also pushed up the stock indices. The increased risk appetite negatively affected the dynamics of the JPY and gold, traditionally used as safe haven assets. Thus, gold lost support in the area of the level of $ 1,700 per ounce, and the USD was able to grow against the JPY to the resistance of 109.75. Despite the impressive growth of the indices, bulls should still be extremely careful, since the risks of a re-outbreak are still present.

Schedule for this week:

Monday, June 8
10:00 GMT - USA. OPEC Press Conference;
13:45 GMT - Eurozone. ECB President Lagarde Speaks.

Tuesday, June 9
06:00 GMT - Germany. Trade Balance;
09:00 GMT - Eurozone. GDP.

Wednesday, June 10
01:30 GMT - PRC. Consumer Price Index (CPI);
09:00 GMT - USA. OPEC Meeting;
12:30 GMT - USA. Consumer Price Index (CPI);
18:00 GMT - USA. Fed Interest Rate Decision;
18:30 GMT - USA. FOMC Press Conference.

Thursday, June 11
Eurozone. Economic and Financial Affairs Council Meeting;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - USA. Producer Price Index (PPI).

Friday, June 12
06:00 GMT – United Kingdom. Industrial Production;
06:00 GMT - United Kingdom. GDP;
09:00 GMT - Eurozone. Industrial Production;
14:00 GMT - USA. Michigan Consumer Sentiment.

Author: Anthony Porter, IAFT Analyst