USD Trading Outlook (04-06-2015)

Euro rallied as ECB revised higher inflation forecast for 2015. This is the second consecutive 100+ pip move in 2 days, bringing the pair as high as 1.1284 (This was the biggest 2 day gain since 2009). EURGBP also rose for the 6th day in a row as a result of continued EURUSD strength. Despite the recent strength, Bank of America Merrill Lynch continues to expect a gradual EUR/USD weakening towards parity by the end of the year. Looking forward, NFP Report tomorrow will show further direction. Next big Resistance 1.1330/1.1385

GBPUSD Recovered to 1.5375 despite weaker than expected PMI’s. Technical Indicators remain bearish on the pair with next support levels being 1.5260 /1.5225/1.5170. Today BoE meets to set monetary policy, but it’s not expected that we will have any surprises so, it is likely it will be a non-event.

USD/JPY is still range bound between 123.80/125.00.

Big news in the market today is the drop in Asian Stock markets, as indexes plunged as much as 6% at one point, driven by fear that China is starting its meltdown.

For today Initial Jobless Claims will set the tone at 12:30 GMT but please remember tomorrow: Nothing Else Matters than non-Farm Payrolls.

Trading quote of the day: ‘Bring your desires down to your present means. Increase them only when your increased means permit’. Aristotle