The Euro Continues to Rise against the US Dollar

Fundamentals
Yesterday traders were watching the following fundamental indicators. The UK’s services PMI for May of the current year was published at 8:30 am GMT. The indicator fell to 53.8 against a forecast decline to only 55. The UK's economic indicators have recently been showing a slowdown in the growth rate. The rate of GDP growth in the first quarter of this year was 0.2%, and the rising inflation rate is still raising red flags, as we’ve already noted. On May 16, 2017, inflation was 2.7%. The situation is aggravated by the acts of terrorism that have swept the country and have raised doubts about the authorities’ ability to control the situation. Nevertheless, the pound sterling is feeling fine and the GBP/USD again moved to the top of the price channel at 1.3000. The question is, will it last.
The non-manufacturing PMI was published in the United States at 2:00 pm GMT. The number, at 56.9, was worse than the expected 57. The dollar did not react to the news, and the euro continued to rise against the greenback, trying to consolidate on the hourly charts above 1.1250, where the 9-day EMA is located.
Naturally, among today's news traders may take a cue from the Bank of Australia’s decision on the interest rate. Unfortunately, at the time of this writing we had no information about what is happening, but we assume that the data will match the consensus forecast and the Bank of Australia will leave the rate unchanged, i.e., at 1.5% p.a.
At 1:00 pm GMT fans of trading on the Russian stock market and trading the EUR/RUB and USD/RUB pairs can watch for the release of data on the consumer price index. The forecast is 4.1%, which aligns with the previous number. Note that the Bank of Russia is sticking to a fairly cautious approach to inflation. At the last Saint Petersburg international economic forum, Central Bank head Elvira Nabiullina stated that inflation has to be kept low. She repeated that the Central Bank's target is 4% p.a.
At 2:00 GMT the JOLTS job openings report comes out in the United States.
Stocks
No important corporate news is coming out today.
The US stock market continues to rise. Although the market is clearly overheated, the bulls are successfully attacking the Dow Jones Industrial Average. The support for the index is now at 21,080 (21,100), where the 9-day EMA is located. Aggressive traders might therefore try to open short positions, counting on a downward correction. Naturally, however, the bulls will use local bounces to build up longs.

Currency Market
Yesterday the GBP/CHF pair rebounded, trying to get to the resistance at 1.2520. Note that the MACDF began rising, sending a weak growth signal, but this still contradicts the sell signal on the weekly charts. It is therefore entirely possible that the rise of the pound will be used to re-open short positions, which makes trading on the fall all the more attractive. The support is at 1.2390, where a 78.6% Fibonacci correction is located.
The EUR/CAD pair continues to increase. On the weekly charts, however, the pair came up to the resistance level – 1.5230 – where a 61.8% Fibo correction is located. We therefore assume that a reversal of the short-term trend is possible. A breakthrough at the 9-day EMA – 1.5130 – may be confirmation.

Nikolay Dudchenko, Olymp Trade analyst.

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