EURUSD: markets await results of Bank of England meeting

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On Wednesday the 20th of June, trading on the euro closed slightly down at 1.1570. In general, the statements of the heads  of the Central Bank at the conference in Portugal did not have a noticeable effect on major currencies. During the European session, the euro fell to 1.1537. When the US session came around, the price corrected to 1.1600.

US data:

  • Existing home sales (May): 5.43m (forecast: 5.52m, previous reading revised from 5.46 to 5.45).
  • Current account (Q1): 124.1bn (forecast: 129bn, previous reading revised from 128.2bn to 116.2bn).

Day’s news (GMT+3):

  • 10:30 Switzerland: SNB interest rate decision.
  • 11:30 Switzerland: SNB press conference.
  • 11:30 UK: Public sector net borrowing (May).
  • 14:00 UK: BoE interest rate decision.
  • 16:30 US: Philadelphia Fed manufacturing survey (Jun).
  • 23:15 UK: BoE's Governor Carney speech.
  • OPEC+ meeting.

Fig 1. EURUSD hourly chart. Source: TradingView

Current situation:

  • The euro/dollar pair is maintaining lateral movement in a channel with a range of 116 pips. A local channel has formed inside the main channel. The balance line is acting as a resistance for buyers at 1.16.  
  • Given that the US dollar is trading up against major currencies in Asia, I expect the euro to fall to 1.1553 ahead of the announcement of the BoE's monetary policy decision. The British pound will be shaken if the number of votes for raising and keeping rates as they are changes. Moreover, the BoE meeting will affect the euro's movements on the euro/pound cross. If the level of 1.1543 is successfully passed, then from there a drop to 1.1517 may occur.   
  • Tensions in the US-China trade confrontation have temporarily eased, but keep an ear to the ground, as retaliatory measures from China are expected.

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