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US dollar fell after inflation data, Gold tests 1900 level

June 15, 2021

GBP/USD: Cable’s buyers reversed losses yesterday and pushed it higher against the US dollar after data showed that US consumer prices rose while the European Central Bank maintained increased stimulus measures, as expected. US consumer prices rose by 5% year over year, which is the largest growth since August 2008. Also, the ECB raised its growth and inflation forecasts for the current and next year. After yesterday’s meeting, the ECB decided not to change its interest rate as expected. It also noted that it would maintain the total volume of the Pandemic Emergency Purchase Programme at €1.850 billion until at least the end of March 2022. Moving on, hard talks on Brexit and the expected global push against China may affect the GBP/USD prices.

BUY LIMIT 1.4200/TP 1.4260/SL 1.4170


USD/JPY: The USD/JPY showed mixed dynamic yesterday, having reached 109.8 level, the highest level for the last week, but the pair failed to sustain this level and decreased by almost 50 points since the beginning of the American session yesterday as soon as US numbers were reported. Meanwhile, the US approved a $547 billion infrastructure package as a part of the Biden administration proposal of his $2.3 trillion package. On the other hand, the yen grew a little after the reported data indicated that the Japanese economy suffered less than expected in the first quarter. Additionally, the Bank of Japan said its negative interest rates and asset purchase program will remain unchanged in its upcoming monetary policy meeting, which can limit the growth rate for the currency. As for now, investors await for the US Michigan Consumer Sentiment Index to rate the market sentiment.

BUY 109.50/TP 110.65/SL 109.10


Gold: Gold ended the last session of the week on a higher note but has been showing sluggish movement since the beginning of the Asian session today, testing the 1900 level. Decreasing Treasury yields pressured the US dollar, backing the gold bulls yesterday. Also, yellow metal growth could have happened due to the ECB’s refusal to revise the inflation and growth forecasts amid investor’s fears of the rates cut, backed by strong inflation. Risk sentiment remained unchanged yesterday as investors stay cautious before the US Consumer Price Index release. The upside may challenge the Fed on tapering and rate hike pricing. In this case, we recommend holding your long positions and open some more as soon as it breaks the 1905 level.

BUY 1905.50/TP 1915.00/SL 1899.30