Weekly Outlook | Geopolitics to take center- stage

Important events this week:

Following the Israeli attacks on Iran the situation is expected to remain tense also this week. In Iran the population started to stock up general goods, while Israel pointed out that they will continue to fly further attacks. Meanwhile Iran had attacked Israel over the last weekend and is facing further consequences, should they not stop in doing so. Oil prices in the meantime have moved higher and with the break of recent resistance levels to the upside prices might indeed rise further for now until the situation will calm.

This week markets will focus on these tensions but also continue to keep an eye on important news releases. The important interest rate decisions might move markets as we will analyze below. 

– JP- Interest Rate Decision- In Japan the pressure of inflation had been rising in recent month. A potential reason for the BoJ to not increase interest rates is the dilemma of the huge debt burden. It is hence not expected that a rate hike will follow yet the wording of the press conference might still move markets.

USDJPY, weekly chart

As the monthly chart of the USDJPY currency pair above shows, more downside momentum might occur. Should the price break below the important support level at 142.25 more downside momentum might occur.  The interest rate decision will follow on Tuesday, 17^th June.

– US- Interest Rate Decision- The probably most important news event this week will come from the Fed in the US. The Central Bank is not expected to cut rates as economic data continues to remain in line with expectations. Slower employment data earlier this month suggest a slowdown in the economy where inflation data also cooled off.

GBPUSD, weekly chart

The weekly chart of the GBPUSD shows that the uptrend remains intact. Falling prices might only occur, should the market break the important technical zone at 1.3400. A retest of this area might be likely though, and traders are expected to use that zone as a fresh buying opportunity. Should Jerome Powell point out that a rate cut won’t happen this scenario remains likely. Else, fresh upside momentum might directly be found. The interest rate decision will follow on Wednesday, 18^th June at 20:00 CET.

– CH- Interest Rate Decision- Another interesting important interest rate decision will follow from the SNB. Following the last decision in March another rate cut is expected this week. This, however, might only have a limited impact to the Swissy. Instead, the Swiss Franc is expected to rise further, in particular against the Greenback.

USDCHF, weekly chart

The weekly chart above shows, that the market might break even lower from current levels. Following the break and retest of the current resistance zone at 0.8380 the slide in prices might now push the market to higher levels below this zone. Slight rising prices might then be used as selling opportunity. The interest rate decision will follow on Thursday, 19^th June at 09:30 CET.