Trading the Week Ahead: 10th June 2024


Financialsource Representative

Last week, we honed in on the ECB rate decision. Anticipating a rate cut coupled with raised inflation and growth forecasts, we expected less likelihood of further rate cuts this year, setting the stage for potential Euro strength. Indeed, the ECB delivered just that, revising up their forecasts, and we saw a great opportunity to buy the Euro against the Dollar and Pound right as the news hit.

This perfect setup shows why we meticulously prepare using our cheat sheets for high-probability opportunities. Even if you entered the trade a bit late after the decision, there was still a significant upward move, capturing around nineteen points from the initial spike.

Looking ahead to this week starting Monday, the tenth of June, our main focus shifts to the UK employment data on Tuesday. With an additional member of the Bank of England's monetary policy committee leaning towards a rate cut, any signs of labor market weakness could prompt significant Pound selling, as market participants might anticipate imminent rate cuts.

On Wednesday, we have the US CPI print—a critical indicator given the heightened focus on inflation in the US. Any deviation from expectations here could lead to marked Dollar movements. If inflation is higher than anticipated, expect some reversal of recent Dollar weakness as the market adjusts its view possibly towards a "higher for longer" rate scenario.

Wrapping up the week, we have the Federal Reserve's interest rate decision, which is bound to be a pivotal event given its potential to reshape market expectations based on the updated economic projections and the so-called "dot plot."

Though other data points like the Aussie employment data and the Bank of Japan's interest rate decision are on the calendar, they are expected to have less impact compared to the major events listed. As always, we will cover these events live, providing up-to-the-minute analysis and trading strategies.

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