Market News and Charts for June 14, 2021
Hey traders! Below are the latest forex chart updates for Monday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
The pair will continue to trade lower towards an 11-month low of 6.8407. The British economy contracted by -1.5% in the first three (3) months of fiscal 2021. The figure was lower than Germany and the Eurozone’s decline in Q1 GDP of -1.8% and -1.6%, respectively. Meanwhile, the month-over-month (MoM) GDP growth in May was up 2.3%, which marks the third consecutive increase in the report. This suggests that the United Kingdom’s economy will start to recover in the second quarter of the year. The recent and upcoming economic reports from the UK were employment and trade results. On a quarterly change for April, Britain is expected to add 113,000 jobs, which will eclipse March’s result of 84,000. Analysts credited the lifting of several restrictions in the country in mid-March as the catalyst for the growth. This is anticipated to send the unemployment rate to 4.7%. Meanwhile, the UK trade deficit fell by 75.0 million to -10.96 billion in April.
A continued sell-off should be expected in the USDBRL pair with a target below its current support area to 4.8000. The Economic Activity Index of the Central Bank of Brazil turned positive in April after the IBC-Br grew by 0.4% based on Monday’s report, June 14. In the last month of the first quarter, the index dropped by -1.59% after an all-time high record of daily coronavirus infection surpassed 100,000 for the first time. On March 25, the number of cases published for the was 100,158. Along with a pickup in economic activity, the services sector advanced by 0.7%. This follows a -4.0% dip in March 2021. Adding to the bullish outlook in South America’s largest economy was the possibility of the country’s central bank to increase its benchmark interest rate this week. Brazil is expecting a 75-basis points hike to 4.25% on June 16, which coincides with the US Federal Reserve’s announcement of interest rate, which is expected to remain at 0.25%.
The pair will bounce back from its current support area to retest a key resistance level at 4.19066. Romania’s annualized consumer price index (CPI) data jumped to its highest level since January 2020. This marks the first time that the headline inflation soared above the National Bank of Romania’s 2021 target of 3.4%. Since the start of the year, inflation growth has been steady at around 3.0%. This makes the Romanian leu more stable than most currencies. On the other hand, the US inflation published on Thursday, June 10, jumped by 5.0%. This increases the fear of surging prices of basic goods in the world’s largest economy. On Wednesday, June 6, analysts are expecting the Federal Reserve to provide hints of interest rate hike despite the interest rate projected to remain at 0.25%. As for the labor market, the US achieved below 400,000 jobless claimants last week. The Fed has 2 mandates – to maximize employment and to keep prices stable.
The pair will form a higher high after a first pullback occurred in mid-May following a breakout from the “Falling Wedge” pattern resistance line. The pressure for Norges Bank to increase the interest rate to tame inflation faded following the decline in the CPI data. In May, the headline inflation cooled down to 2.7% year-over-year after the previous record soared by 3.0%. Norway’s central bank has an annual inflation target of 2.0%. On the other hand, the European Central Bank might consider pulling its support from the EU economy after it kept the interest rate flat at zero percent. On Tuesday, June 15, analysts expect the bloc’s E3 (Germany, France, and Italy) to publish higher inflation. This was after Spain’s figure jumped by 2.7%, which exceeds the European Central Bank’s target of 2.0%. Germany is expected to overshoot the ECB’s target while France and Italy are expected to increase but still below 2.0% with the 1.4% and 1,3% estimates.