#EURUSD,#GBPUSD: Weekly #Forex Forecast (18-24th June 2023)

EUR/USD: Weekly Forecast 18th June - 24th June

The EUR/USD provided bullish speculators of the currency pair plenty of opportunities to feel optimistic last week.

The EUR/USD went into the weekend near the 1.09410 level after producing a high on Friday near the 1.09725 ratio, before a slight reversal lower. The apex value on Friday was last seen on the 11th of May. However, this time the rather strong value was produced after a week of solid gains and central bank confirmations from the ECB and Federal Reserve which seemingly have made financial institutions more confident about anticipated outlooks. The value near 1.09725 seen in the second week of May occurred as the EUR/USD was starting to ebb lower.

The ability of the EUR/USD to climb from a low of about 1.07300 on early Monday and move upwards the remainder of last week was a bullish outcome. More importantly, were the incremental steps made higher and the rather strong price velocity, which occurred on Thursday when the European Central Bank sounded hawkish while raising their interest rates, compared to the U.S Federal Reserve’s pause and remarks on Wednesday.

EUR/USD Move Higher is within Sight of Mid-Term Resistance Levels for Traders

The rapid move higher in the EUR/USD was certainly welcomed by bullish speculators of the currency pair who had been anticipating a renewal of the upwards momentum seen earlier this year. The EUR/USD was able to trade near a high of around 1.10920 in late April and early May, and there is no doubt some traders are eyeing these values as targets. However, day traders without deep pockets should remain realistic in their pursuit of higher prices, and be willing to cash out bets when profits have been registered. There still are questions ahead regarding U.S Federal Reserve policy which could cause some volatility for the USD in the days and weeks ahead.

The pause in interest rate hikes from the U.S. Federal Reserve achieved last week had been widely anticipated. The question now is if the halt to raising interest rates will become permanent, or if it will only prove to be a ‘skip’ – meaning another hike will happen in July. Investment houses definitely showed bullish appetite regarding the EUR/USD last week, but the last time the Forex pair began to hit these higher ratios it did turn into rather choppy results for many.

Fed Rhetoric this Week will Come via Jerome Powell and John Williams

• It is a U.S banking holiday tomorrow and volumes will be less than normal in Forex globally and this will affect the EUR/USD
• John Williams the Federal Reserve President of New York will speak Tuesday and could cause a reaction from EUR/USD traders briefly.
• Fed Chairman Jerome Powell will testify in Washington on Tuesday and Wednesday before Congress.

EUR/USD Weekly Outlook:

The speculative price range for EUR/USD is 1.08300 to 1.10650

The gains by the EUR/USD have been strong and traders cannot count on the price velocity seen last week to continue into the coming days. However, the trend upwards is attractive for speculators who continue to perceive that there is additional upside momentum to be found. Yet, shadows do lurk regarding the potential of the U.S. Fed to raise rates in July.

Support levels near the 1.09200 should be watched by traders, reversals lower in Forex is natural and a move towards the 1.09000 may be a rather short-lived move. If the 1.09000 were to prove vulnerable, this could set the table for a test of the 1.08800 vicinities, but this may be overdone and a good place for bullish EUR/USD traders who believe other moves higher will develop.

Bullish sentiment in the EUR/USD is likely to remain rather appealing this week, and EUR/USD traders may be looking at the GBP/USD and its results as a comparison and feel the EUR/USD has more room to grow. Traders should keep risk management practices in place and not bet blindly on upwards momentum. If the EUR/USD starts this coming week with strong results and maintains its 1.09300 level, it may be a clear signal for speculators that a move towards 1.10000 could develop. However, aiming for the 1.09600 to 1.09800 prices may be a better conservative position in the short term.

GBP/USD: Weekly Forecast 18th June - 24th June

Bullish speculators of the GBP/USD may have been taken by surprise regarding the price velocity the currency pair was able to attain last week.

The GBP/USD will start this week trading near values it has not traded since April of last year. Last week the GBP/USD hit a low on Monday afternoon near the 1.24860 mark, and from that moment on the Forex pair began to climb steadily higher with momentary reversals lower also factoring into trading.

On the 25th of May, the GBP/USD was trading near a low of around 1.23025, and after a challenge to the 1.25400 level in early June the currency pair was near the 1.23725 ratio on the 5th of June. These values are meant to show the volatility the GBP/USD has produced in the past month. The move higher to Friday’s close around the 1.28175 mark has not come without choppy results for many speculators.

Friday’s close within sight of highs achieved near 1.28500 is significant. The U.S. Federal Reserve on Wednesday of last week ‘paused’ their interest rate hikes as expected. This coming Thursday the Bank of England will announce their Official Bank Rate and an increase of 0.25% will be anticipated by almost all financial institutions.

Inflation Data from the U.K is coming on Tuesday and will affect the GBP/USD

Traders who have remained bullish with the GBP/USD have likely been rewarded the past two weeks of trading and they may be looking for additional upside momentum. Technical traders will have to pull out long-term charts to gain a perspective on the opportunities for the GBP/USD ahead. On the 18th of April last year, the GBP/USD was trading above the 1.30000 ratio.

However, before traders jump blindly into buying positions without any risk management, the rules of GBP/USD trading have not changed. Reversals lower still occur and plenty of questions regarding data and policy are coming for the Forex market which will affect day-to-day speculation. Having achieved the 1.28000 ratios and sustaining this mark before going into the weekend was a solid result. But risk events are ahead in the coming days via a U.K inflation report and its effect on the rhetoric from the Bank of England.

U.S Consumer Price Index Data this coming Tuesday will Impact GBP/USD Results

• The U.S. has a banking holiday this Monday and the lack of American participation in Forex will cause volumes for the GBP/USD to be lower than normal.
• Consumer Price Index numbers will come from the U.K this Wednesday and if inflation numbers remain strong this will cause an effect on GBP/USD trading.
• Thursday’s Bank of England Monetary Policy Summary will be watched for hawkishness in the face of recessionary data and stubborn inflation from Britain.

GBP/USD Weekly Outlook:

The speculative price range for GBP/USD is 1.27400 to 1.29500

Last week’s rather fast and surprisingly strong upwards momentum from the GBP/USD was solid for speculators who have maintained bullish perspectives. The U.S Federal Reserve could still cause fireworks in Forex with rhetoric this week based on FOMC member John Williams speaking this Tuesday, and Fed Chairman Powell being in Washington before House and Senate committees the middle of this week. However, support levels for the GBP/USD may prove to be durable and traders may perceive values below the 1.28000 ratios as buying opportunities if they occur on stronger declines.

Inflation results from the U.K. this week via the CPI figures should be watched. If the inflation numbers are stronger than expected this could spur on more buying of the GBP/USD because it will be seen as further ammunition for the Bank of England to stay hawkish. Any surprises from the inflation data will certainly cause price action in the GBP/USD.

The BoE is certainly going to raise interest rates this week, but this has been traded into the value of the GBP/USD already. Speculators and financial institutions want to see the results of the CPI inflation data this Wednesday for fundamental GBP/USD confirmations regarding their outlook. If the Consumer Price Index results are above the anticipated number, this could cause buying to start challenging higher realms in the GBP/USD that have not been seen in over a year. The 1.29000 level could be a target, but day traders need to remain realistic regarding their targets and use conservative risk management.

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