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Trading ideas for EUR/USD, GBP/USD, XAU/USD

June 10, 2022

EUR/USD: The euro declined against the greenback on Thursday amid expectations that the European Central Bank will start raising its interest rates next month, for the first time in 11 years. In addition, pending inflation data had also contributed to the fearful market sentiment. Even though the ECB decision was widely anticipated, a possible larger increase in September pushed the market sentiment amid the EU economy struggling with decreasing growth and steadily increasing inflation. For the past several months the markets have been observing central banks curbing inflation. It is now expected that the Fed will increase the rates by 50 basis points next week, considering that the U.S. CPI data will confirm the elevated inflation expectations.

SELL LIMIT 1.06345/TP 1.06060/SL 1.06440

 

GBP/USD: The British pound declined against the greenback on Thursday following the rate hike expectations by the European Central Bank. It will be the first rate hike since 2011. The decision will be made next month and has been anticipated by the markets for weeks. In addition, an even more significant September rate hike possibility had further impact on the market sentiment amid the eurozone economy struggling to overcome both slowing growth rates and an increase in inflation. Currently, the market focus has shifted towards the U.S. inflation data due today with the main expectation being a 50 basis point rate increase.

SELL LIMIT 1.24990/TP 1.24630/SL 1.25080

 

XAU/USD: Bearish bias remains unchanged so far as risk-aversion is still in play. In addition, the European Central Bank failed to support the market sentiment despite the Quantitative Easing ending announcement as well as a 0.25% rate increase in July. Furthermore, the White House has already reported the risk of rising inflation ahead of today’s U.S. consumer price index (CPI) data, while the World Bank (WB) and the Organization for Economic Cooperation and Development (OECD) have heightened fears of a global recession. Lastly, the return of activity restrictions and mass testing in China due to the resurgence of covid disease cases is also affecting market sentiment and gold prices.

SELL LIMIT 1847.85/TP 1841.95/SL 1849.80