Here are the details of the economic calendar from June 10:
The results of the European Central Bank (ECB)'s scheduled meeting were announced during the last trading day, where the regulator left the base interest rate at zero, and the rate on deposits at -0.5%.
Following the ECB's comments, the governing council is panicking to keep key rates at the same or lower level until the inflation forecast stabilizes below 2%.
As for the subsequent press conference, ECB President Christine Lagarde noted that there is still a characteristic uncertainty about the short-term economic outlook, which still depends on the development of the situation with the coronavirus. With regards to inflation, her rhetoric was just the same as the previous comments. In short, it was said that the inflation growth in recent months is largely due to the effect of a low base, and this is only a temporary factor.
In turn, the United States released its inflation data at the same time as Christine Lagarde's speech. The data shocked the market with its impressive growth to the level of 5% in annual terms. It can be recalled that inflation was predicted to rise from 4.2% to 4.7%, which was already considered a lot. But now, we have literally a direct signal indicating a possible tightening of monetary policy by the Fed in the upcoming trading week.
We now understand the real reason why the US dollar was extremely interesting yesterday, as investors were simply afraid of the level of inflation in the US.
Analysis of trading charts from June 10:
The EUR/USD pair showed quite high volatility yesterday, which put the support level of 1.2160 under attack. But based on the four-hour period, no fundamental changes are observed on the trading chart.
In simple terms, the support level of 1.2160 withstood the pressure of sellers the time there was an attempt to break through it.
The GBP/USD pair also showed high activity, where the lower border of the side channel 1.4100/1.4245 was broken. Following the H4 time frame, it can be seen that sellers failed to consolidate below the signal level of 1.4080. As a result, the breakdown turned out to be false, and another price rebound occurred from the lower border.
The trading recommendation on June 10 considered the signal level of 1.4080 when working on the breakdown of the lower border of the side channel, but due to the fact that the price was not settled below this level, we returned to the rebound tactics again.
Trading recommendation for EUR/USD and GBP/USD on June 11, 2021
In terms of the economic calendar, the UK already released its industrial production for April, where the growth rate accelerated from 3.6% to 27.5% year-on-year. These staggering indicators are due to the low base effect when the growth rate of an economic indicator is explained by its extremely low starting indicator.
To simply put, the effect of lockdowns on economic activity.
The pound did not react to such a strong acceleration of industrial production. It is possible that speculators were disappointed by the monthly data, which fell by 1.3% against the expected growth of +1.2%.
Today, important statistics are not expected to be released in Europe and the United States.
Looking at the EUR/USD trading chart, one can see that the reference levels are the values of 1.2160/1.2200, within which the quote moves. The strategy of working on the breakdown of a particular level is still relevant among traders, but it must be confirmed the breakdown on the four-hour time frame (H4).
As for the trading chart of the GBP/USD, it shows that there are price fluctuations in the lower part of the sideways channel 1.4100/1.4200, where the trading tactic on a rebound is still relevant. Currently, the price rebounded from the border of 1.4200 along a downward trajectory.
It is worth noting that a change in the available tact may occur if a number of conditions are met: the price is held below the level of 1.4080 in the H4 time frame, or the price is held above the level of 1.4200.