Markets Europe Fundamental Forecast | 21 June 2024

Overview:

The Asian session today was positively influenced by the latest U.S. unemployment claims report, showing a decrease to 238,000 for the week ending June 15, 2024.

This improvement indicates a potentially stable job market, boosting investor confidence, strengthening the U.S. dollar, and positively impacting Asian stock markets, particularly in export-driven economies.

Asia Session Highlights:

• U.S. Unemployment Claims: Decreased to 238,000 from 243,000 the previous week.

• Impact: Boosted investor confidence and strengthened the U.S. dollar.

• Asian Stocks: Positively impacted, especially in export-driven economies.

Impact on Europe and US Sessions:

The positive U.S. unemployment claims report is likely to bolster investor confidence, strengthen the U.S. dollar, and promote a risk-on sentiment in the Europe and U.S. sessions.

Expect bullish trading behavior, increased trading volumes, and positive momentum in stock markets, particularly in sectors with significant U.S. market exposure or export sensitivity.

Key Data and Events to Watch:

Dollar Index (DXY)

• Flash Manufacturing PMI (1:45 PM GMT): Expected around 50.9, indicating expansion in the manufacturing sector. A stronger-than-expected PMI could bolster the dollar.

Central Bank Notes:

• Federal Funds Rate: Target range remains 5.25% to 5.50%. The committee aims to achieve maximum employment and 2% inflation, remaining vigilant about inflation risks.

Next 24 Hours Bias: Medium Bearish

Gold (XAU)

• Key Event: Flash Manufacturing PMI (1:45 PM GMT)

• Impact: A stronger PMI could strengthen the dollar and pressure gold prices down. Conversely, a weaker PMI could boost gold prices.

Next 24 Hours Bias: Medium Bullish

Australian Dollar (AUD)

• Support: 0.6623

• Resistance: 0.6707

• Central Bank Notes: RBA kept the cash rate target at 4.35%. Inflation is forecast to return to the 2-3% target range by 2025.

Next 24 Hours Bias: Weak Bullish

Kiwi Dollar (NZD)

• Support: 0.6085

• Resistance: 0.6140

• Central Bank Notes: OCR unchanged at 5.50%. Restrictive monetary policy is expected to persist to ensure inflation returns to the target range.

Next 24 Hours Bias: Medium Bearish

Japanese Yen (JPY)

• Support: 158.20

• Resistance: 160.22

• Central Bank Notes: BOJ maintains its QQE and negative interest rate policy, encouraging the uncollateralized overnight call rate to remain around 0 to 0.1%.

Next 24 Hours Bias: Weak Bullish

Euro (EUR)

• Key Events:

• French Flash Manufacturing PMI (7:15 AM GMT)

• French Flash Services PMI (7:15 AM GMT)

• German Flash Manufacturing PMI (7:30 AM GMT)

• German Flash Services PMI (7:30 AM GMT)

• Impact: PMI data from France and Germany will significantly impact EUR/USD. Lower-than-expected PMIs could weaken the euro, while stronger data might bolster it.

Next 24 Hours Bias: Medium Bullish

Swiss Franc (CHF)

• Support: 0.8837

• Resistance: 0.8954

• Central Bank Notes: SNB lowered the key policy rate by 25 basis points to 1.50%. Inflation is projected to remain in the SNB's target range over the next few years.

Next 24 Hours Bias: Weak Bullish

Pound (GBP)

• Key Events:

• Flash Manufacturing PMI (8:30 AM GMT)

• Flash Services PMI (8:30 AM GMT)

• Impact: PMI data is crucial for GBP. Manufacturing PMI at 51.3 suggests expansion, while Services PMI at 54.9 indicates continued growth.

Next 24 Hours Bias: Weak Bullish

Canadian Dollar (CAD)

• Key Events:

• Core Retail Sales m/m (12:30 PM GMT)

• Retail Sales m/m (12:30 PM GMT)

• Impact: Expectations of 0.5% growth in Core Retail Sales and a slight decrease in overall Retail Sales could strengthen or pressure CAD based on actual outcomes.

Next 24 Hours Bias: Weak Bearish

Oil

• Support: 80.93

• Resistance: 83.00

Next 24 Hours Bias: Weak Bearish

Conclusion:

Today's focus is on PMI data from major economies and the impact of U.S. unemployment claims. Key movements in the forex market will hinge on these data releases, influencing investor confidence and trading behavior.

Stay updated with real-time analysis and signals from Forex368 to navigate these market movements effectively.

Best Regards, Forex368 Team