The Euro forms the new low
The Italian trade balance for April showed a decline from 3.89 billion euro to 3.51 billion vs. 4.27 billion. The business sentiment index in Germany ZEW, as we expected, came out with a significant decrease from 33.1 to 29.8 - a trend that lasted six months and worsened since the development of events in Ukraine is not on the European scenario.
We advise to short with the first target - 1.3490. When the pair consolidates below the first target, we can open deals to the level of 1.3435.
The British data showed a decline in the inflation. The retail price index fell at an annual rate from 2.5% to 2.4%, the CPI fell even more - from 1.8% to 1.5%, the core CPI was 1.6% versus 2.0% in April.
There was published minutes for the Bank of England last meeting. The recent statement by the Central Bank head the likely imminent rate increase, perhaps based on the shift in the monetary policy committee members’ attitudes. If traders see this sentiment clearly, the sterling will not fall much.
We advise to long with the first target - 1.7070. When the pair consolidates below the first target, we can start a deal to the level of 1.7020.
Last Friday, the U.S. dollar rose against the yen, but the growth is expected to remain limited, as the renewed concerns over the tensions in Ukraine and the Middle East support the demand for the yen. The central bank of Japan June meeting protocols showed that those responsible for the policy members agreed that the country's economic recovery will remain under the control, and the consumer price inflation slowed down temporarily.
We suppose the pair will go to 100.85 first. Having overcome the first target the price might go downwards to 100.35.
Ruban SergeyAnalyst of «FreshForex» company
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