EURUSD Forex Trading Signal June 2014

May proved once again to be an unfavorable month for EURUSD. The recent European elections gave the market hope that the European economy will shift toward growth in the coming years. However, in May 2014, ECB President Mario Draghi warned that the strength of the Euro is a ‘serious concern.’ Any new EU growth policies will likely lead to a more flexible Euro rate against the US Dollar over the next few years. From a long-term view, this is negative news for the Euro.

On the other hand, for the short-term EURUSD movement, our TCI model shows the Euro is now in an oversold area, which may push EURUSD higher in the coming weeks. Note that June is traditionally a strong month for the Euro against the USD (see the statistics table below).

The current TCI trading signal predicts the course of EURUSD for the upcoming weeks.

• Forex Asset: EURUSD
• Exchange Rate: 1.36328
• TCI Forecast: Uptrend Correction (↑)

Before diving deeper into EURUSD, let’s review our previous signal on the Nasdaq Composite.

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Previous TCI Trading Signal on Nasdaq Composite

In our last TCI analysis, we predicted a short-term bullish market for the Nasdaq Composite, though we remain cautious about the long-term outlook.

At the time of our previous signal (May 19th, before market open), the Nasdaq was at 4,090.57 points. We forecasted a bullish trend and set a selling target for May 27th, 2014. Today, Nasdaq stands at 4,242.62 points, confirming our TCI-based trading signal.

■ TCI Signal: Short-Term Bullish Market

■ Nasdaq Starting: 4,090.57 points

■ Selling Target: 27th of May 2014

■ Nasdaq Today: 4,242.62 points

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You can find the full Nasdaq Composite trading signal here, along with the TCI indications in the attached table. » NASDAQ Composite Index May 2014

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EURUSD Macroeconomic Outlook

Here are some key macroeconomic updates for EURUSD:

■ The ECB will meet on June 5th, with a rate cut expected for both the deposit and main refinancing rates.

■ According to 54 out of 56 Bloomberg analysts, the main Euro refinancing rate is forecasted to drop from 0.25% to 0.1%.

■ Annual inflation rates in Italy and Spain slowed in May 2014.

■ US consumer spending fell 0.1% in April (month-to-month), while forecasts expected a 0.2% increase.

■ Personal income in the US rose 0.3% in April, matching analyst forecasts.

■ The University of Michigan’s consumer sentiment index for May 2014 was 81.9, slightly below the forecast of 82.5.

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EURUSD Statistics for June 2014

These historic average returns for EURUSD are based on 13.5 years of data from TradingCenter. As shown, June is traditionally a good month for the Euro against the US Dollar. On average, EURUSD gains +0.62% during June. In a 14-year sample, June was bullish 9 times and bearish 5 times.

MONTH	AGGREGATE EURUSD CHANGE (%)	AVERAGE EURUSD CHANGE	TIMES(↑↓)	AVERAGE EURUSD DAILY VOLATILITY
APRIL	10.10%	0.72%	7↑ 7↓	0.834%
MAY	-7.28%	-0.52%	6↑ 8↓	0.923%
JUNE	8.70%	0.62%	9↑ 5↓	0.880%

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EURUSD Short-Term Technical Analysis

Here are some key short-term levels for EURUSD. The broad EURUSD trading range remains between 1.3500 and 1.3900.

EURUSD Today: 1.36328

Short Term Supply Level: 1.3800 / 1.3829

Short Term Demand Level: 1.3585 / 1.3500

Chart: EURUSD D1 & 50/200-Days MAs

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TCI on EURUSD -June 2014

The Trading Center Indicator (TCI) is a Technical Analysis Model designed by Giorgos Protonotarios and TradingCenter. ► More About the TCI Indicator

Here are the TCI indications for EURUSD in the coming weeks. As shown in the table below, TCI marked a clear local low for EURUSD on May 28th, 2014 (-2.64%). Since then, EURUSD has entered a correction pattern that TCI expects to continue over the next few weeks.

Table: TCI on EURUSD (June 2014)

 

George Protonotarios, Financial Analyst (June, 1st 2014)

■ EURUSD Trading Signal

TradingCenter (2014)