Monthly Forex News Events that Might Affect EURUSD Volatility – June 2018

Monthly Forex News Events that Might Affect EURUSD Volatility – June 2018

Monthly Forex News Events that Might Affect EURUSD Volatility – June 2018

The EURUSD finally managed to break out from its long-lasting consolidation. We saw the EUR/USD breaking to the downside through several key levels and we’re currently trading at a seven month low. The fundamental catalysts behind the EURUSD move indicates that this is a trend change. The main fundamental catalysts behind the recent bearish momentum are due to US bond yields and interest rates rising faster than the market expectation. The US 10-year yields have reached levels not seen since 2011 to above 3.128.

As long as the US economic growth remains firm, then the pace of rising interest rates will remain steady. The Fed is seen rising rates during the June meeting as the FOMC minutes is showing growing support among Fed policy members to follow through with normalizing interest rates.  With the inflation inching higher, we can see the Fed more aggressive in normalizing interest rates. On the other side of the monetary policy spectrum the ECB also seems reluctant to move away from its ultra –easy monetary policy anytime soon.

Moving forward the seasonal pattern in June confirms that as the summer trading conditions sets in, we should see more choppiness and range bound activity.  The seasonal pattern only gives us the tendency of a particular currency to exhibit a certain behavior at a certain time, so we have to carefully monitor the pattern and how the fundamental forces interact with the price action. Going forward, we’re going to analyze and disseminate the major news event for the upcoming month that can be the catalyst for higher EURUSD volatility.

“Don’t risk significant money in front of key reports, since that is gambling not trading.”
– Paul Tudor Jones

Monthly Forex News Events that Might Affect EURUSD Volatility – June 2018

Moving forward, into a new trading month we can highlight what are the main risk events that can disrupt the market volatility and which can potentially set in motion new trends.

Now, let’s move forward and see what the biggest risk events in June 2018 are:

  • Friday, June 1, 2018 – June kicks off with the NFP report, which will bring the latest job figures for the US economy. The market consensus looks for the job market to start heating up again and add 185k new jobs versus 164k previous reading. The unemployment rate is expected to come steady at 3.9%, a 17-year low point.
  • Thursday, June 7, 2018 – The EU GDP figures are expected to come out. These are the revised figures and according to the initial GDP figure for the Q1, the Euro zone economic activity has slowed down to 0.4% versus 0.7% previous reading. The annualized rate remains at 2.5%.
  • Tuesday, June 12, 2018 – The US CPI inflation figures have previously risen less than expected, but the annualized rate of inflation remains above Fed’s 2% inflation target. The Fed has signaled its willingness to let inflation run above its 2% target while the economic growth activity remains steady.
  • Wednesday, June 13, 2018 – The Euro group meeting will bring among others topics like Brexit, and Greece and many other relevant decisions that can have the potential to disrupt the market volatility.
  • Wednesday, June 13, 2018 – The Fed interest rate decision followed by Fed’s Powell speech is the highlight risk event of the month. The Fed is expected to raise interest rates from 1.75% to 2%, the highest level in 11 years.
  • Thursday, June 14, 2018 – The ECB interest rate decision seems a non-risk event because the general consensus is for the ECB to decide on the future of its ultra-easy monetary policy at its July meeting.
  • Thursday, June 28, 2018 – The revised US GDP figure for the first quarter of 2018 are scheduled to be released. The US economy has initially grown by 2.3% in Q1, which is above the average yearly growth rate. The majority of the Wall Street economists believe the economic growth activity will hover around 3% in 2018.

Monthly Forex News Events that Might Affect EURUSD Volatility – June 2018

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