ECB Forum Held; Fed Chair Mentions Possibility of Two Consecutive Rate Hikes【June 29, 2023】

Fundamental Analysis

• U.S. stock indexes are volatile, mixed profit-taking and push-buying
• U.S. Fed Chair mentions two more consecutive rate hikes; dollar buying strengthens in currency markets
• ECB Governor states policy of continuing rate hikes, but comments that peak interest rates are far from being declared.
• BOJ Governor says policy may be changed if he is convinced that prices will rise
• BOJ Governor Ueda did not mention any change in easing policy before the end of the year

EURSUD Technical Analysis

The Eurodollar exchange rate fell to around USD 1.0910 on stronger selling during the New York session. During the panel discussion of major countries at the ECB Forum in Portugal, the EU and the US emphasized their policy of raising interest rates, while Japan’s stance of staying doves was emphasized. In particular, the U.S. Fed mentioned the possibility of consecutive rate hikes in the future, which strengthened dollar buying and sent EURUSD down 60 pips.

The dollar has risen to a price level of JPY 145, which is a conscious price range, and there is a risk of currency intervention.

Day Trade Strategy (Hourly)

The market as a whole is buying more and more dollars. Therefore, we would like to adopt a selling policy in Eurodollar as well. In addition, analysis of the daily chart shows that a triple top has formed. At the time of writing (9:30 JST), the 24 moving average (daily moving average) and the 240 moving average (2-week moving average) have not dead-crossed.

The best time to sell is when the above two moving averages are dead-crossed. The short-term trade policy is to sell after confirming that the price is below USD 1.0890 and the upside is heavy, up to around USD 1.085.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

1.0927 USD – 240 moving averages
1.0894 USD – Major support zone

Market Sentiment

EURUSD　Sell: 59% Buy: 41%

Today’s Important Economic Indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.