Events to watch out for today:
15.30 Moscow time. USA: Change in retail sales for May.
17.00 Moscow time. USA: Fed Chairman Jerome Powell will deliver a speech to Congress.
Forex forecast EURUSD for today 06/16/2020
The main event of the day will be the speech of the head of the US Federal Reserve in Congress. On the eve of the Federal Reserve announced the redemption of corporate bonds in the amount of $ 75 billion. For the market, this was a pleasant surprise, which caused the sale of the dollar against most competitors. Today, the head of the Fed may declare that the Central Bank is ready to control the “yield curve of bonds” if necessary. In short, the Fed is ready to increase the repurchase of assets. Will such a need be needed in the future? In my opinion, yes. As bond yields will continue to grow as the quarantine caused by the COVID-19 pandemic ends. A few words should be said about the coronovirus itself. A few days ago, one of the leaders of WHO, Maria Van Kerkkhov, who stated that asymptomatic carriers do not distribute COVID-19. But it was precisely the asymptomatic spread that was the only reason for the introduction of quarantines practically all over the world. What does it turn out: they lied to us, but did we believe? WHO says they erred in their initial conclusions. Now it becomes clear why many countries are quickly removing restrictions, despite the high number of patients with COVID-19. What do we have in the dry residue? Additional money supply from the Fed will negatively affect the value of the dollar. What do we have in the dry residue? Additional money supply from the Fed will negatively affect the value of the dollar. What do we have in the dry residue? Additional money supply from the Fed will negatively affect the value of the dollar.
EURUSD recommendation: Buy 1.1325 / 1.1300 and take profit 1.1389
Forecast GBPUSD today 06/16/2020
We open Buy positions for two reasons. Firstly, in the debt market there is an increase in the yield of 10-year UK government bonds in relation to its counterparts from the United States and Germany. For the pound, this is good support. Secondly, investors are buying up oil contracts, which will also have a positive impact on the value of the British currency, since both assets are historically correlated. On Monday, June 22, CME will expire futures contracts and, in my opinion, investors will “push” the market up before expiration. The oil market this week may grow by 5%.
GBPUSD recommendation: Buy 1.2650 / 1.2630 and take profit 1.2740
The forecast of the pair USDJPY today 06/16/2020
Today, a mixed background is forming. On the one hand, we can expect a drop in quotes, as investors are actively selling the dollar against most competitors. The USDX dollar basket index may fall another 2%, as a strong support level broke through the beginning of the month. On the other hand, we can expect growth of quotations, as investors, after a short break, are again building up long positions on the US stock index S & P500, since the USDJPY currency pair historically correlates with the US stock market. The Fed launched two business lending programs this week: Main Street and SMCCF. Total lending could reach $ 675 billion. For the US stock market, this is a good help.
USDJPY recommendation: flat 107.10 -107.90