EURUSD CONSOLIDATION CONTINUES AHEAD OF ECB DECISION

The euro remained in a narrow range ahead of the upcoming interest rate decision by the European Central Bank (ECB). Analysts expect the bank to leave interest rates unchanged, with the deposit facility rate at -0.50%. It will also signal that it will start hiking interest rates in the coming meeting. The decision comes a day after data by Eurostat showed that the economy expanded by 5.4% on a year-on-year basis. On a month-on-month basis, the economy expanded by 0.6%. Other recent numbers showed that the bloc’s inflation surged to a record high in May.

The price of crude oil jumped sharply even after the latest inventory data. Brent rose to a high of $122 while West Texas Intermediate (WTI) jumped to $120. Data by the Energy Information Administration (EIA) showed that inventories rose by more than 2.02 million last week after falling by 1.91 million in the previous year. It was the first week in three weeks that inventories rose. Additional data revealed that the US imported over 1.6 million barrels of oil per day. Oil also rose after Trafigura warned that prices could reach a parabolic state in the coming months. This was a notable statement since Trafigura is one of the biggest oil traders.

US stocks wavered as challenges in the global economy increased. One of the biggest challenges is inflation as the cost of energy and raw materials continued rising. The cost of food has jumped sharply in the past few months as the crisis in Ukraine continued. Stocks also moved sideways as the SEC unveiled new measures that could change how trades are executed. If the rules go into effect, the concept of payment for order flow will end. Meanwhile, shares of Credit Suisse jumped after it was revealed that State Street was considering acquiring the company.

XBRUSD

The XBRUSD pair continued its bullish trend as oil demand rises. It rose to a high of 122.80, which was the highest level since February. It managed to move above the key resistance level at 120.33. It has moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved above the overbought level. Therefore, the pair will likely keep rising as bulls target the key resistance at 125.

EURUSD

The EURUSD pair is in a consolidation mode ahead of the ECB interest rate decision. The pair is trading at 1.0713, which is slightly below the important resistance level at 1.0765. It has formed an ascending trendline that is shown in red. Also, it is trading along the 25-day moving average while the RSI is moving sideways. Therefore, the pair will likely have a bullish breakout after the ECB decision.

EURJPY

The EURJPY pair continued the bullish trend as the Japanese yen continued sliding. It rose to a high of 143.71, which was above the important resistance level at 139.98. It has moved above all moving averages while the ADX has soared to the highest level in years. The RSI has also moved above the overbought level. Therefore, the pair will likely keep rising.