U.S. indexes keep growing the third day in a row in conditions of a very volatile market. This is the result of inflation data that appeared to be above the expectations. Today investors are in anticipation of the meeting of the Federal Reserve System, on which you can hear their opinion on the economy as well as comments on the interest rate.

Moderate recovery in the labor market and controlled increase in the price index suggests that the Fed may raise rates even sooner than expected. Since they are now at historically low levels, no one knows whether the economy is to pick up those recovery rates after the crisis without the help of the Central Bank. On a middle term time span Index is forming a “cup with handle” pattern only a reversed one. The penetration of its handle may lead to the new purchasing wave and today’s event is a great catalyst for a new movement.

SPY

Asian Markets

Asian markets closed indefinably. Chinese Shanghai index continued to fall in terms of instability in Iraq and a possible reduction in the supply of oil on the market, which may lead to higher prices. China is the biggest importer of the resource. Japan gained another 1%.

European indices continue to trade near the highs and today gained about 0.5%.

Forex

Let’s start with a look at currencies against the USD, since this precise currency today will be in the spotlight.

For the last one and a half month the trend of EUR/USD stands for its changes. After the false breakthrough on May 8 on the ECB meeting Euro was actively sold out pending for Draghi’s aggressive actions. Indeed at the meeting of June 5, he lowered deposit rates to negative zone, as well as slightly lowered its key interest rate to stimulate the growth of prices in the Eurozone - the main problem of the region.

There were some points to change your intentions:

  1. Breakthrough of the 100 EMA which previously acted as a support;
  2. Breakthrough of the 200 EMA to which long-term investors pay their attention.

Currently 8/21 EMA is in control of the price and there is no sign for purchases. I’ll look for the breakthrough of the consolidation/flag that was formed in last 5 days.

EURUSD

GBP/USD

GBP/USD is now consolidated before the previous top 1.69955 above all the key moving averages. Slightly removed from the 8 EMA, because a small roll back/consolidation makes sense. Especially when there is a negative inflation data. I'll look for the tactical trade for the fall and the possibility to repurchase 8 EMA near 1.6904.

GBPUSD

NZD/USD

NZD/USD is also one of the strongest pairs on the market. Buyers regained support level 0.85000. Then there was a large, inflamed candle which closed near 0.87000. Now the price is slightly removed from the 8 EMA, but if buyers can keep the support of this flag, you can soon expect a penetration and a growth up to 0.87500.

NZDUSD

USD/CAD

USD/CAD is under the sellers’ pressure at all key moving averages. It looks ready to the new movement down. I'll wait for support 1.08346, then 1.08215. Target is 1.0789 200 EMA.

USDCAD