Market Briefing on Wednesday June 29th

Having been contained between the hourly 55-period and the 100-period Exponential Moving Averages in the past several hours of trade, EUR/USD managed to break above the 55-period EMA and, at the start of the US trading session, it tested the 38.2% Fibonacci level (1.1110), reflecting the descent from June 24th high to June 24th low. As of 13:25 GMT the major pair was edging up 0.28% on the day to trade at 1.1096.

Bank of America/Merrill Lynch now project that EUR/USD may end 2016 at 1.0500 from 1.0800 before, as reported by the media. As far as 2017 is concerned, the major pair may trade at 1.1000 by its end from 1.1500 before, according to the forecast.

In terms of fundamentals, consumer spending in the United States was reported to have increased at a monthly rate of 0.4% in May, following a revised up 1.1% surge in the previous month. May has been the second consecutive month of gains, while the data came in line with market consensus. Personal income in the country was reported to have risen at a monthly rate of 0.2% in May, falling short of market expectations pointing to a 0.3% gain. Core PCE inflation remained steady at a monthly rate of 0.2% and at an annual rate of 1.6%, the report by the US Bureau of Economic Analysis showed.

Recovering from the sharp two-day slump, GBP/USD continued to recover on Wednesday and made an attempt to break the 1.3465-1.3480 area of resistance. As of 13:25 GMT the pair was up 0.93% on the day to trade at 1.3472. Near-term resistance may be encountered at the psychological 1.3500 level, then – at the 23.60% Fibonacci level (1.3570), reflecting the descent from June 24th high to June 27th low, and finally – at the hourly 100-period EMA (1.3609).

Bank of America/Merrill Lynch now forecast that GBP/USD may end 2016 at 1.3000.

Having encountered resistance at the hourly 20-period and 55-period EMAs in the past few hours of trade, USD/CAD registered an intraday low of 1.2978 during the early phase of the US trading session, overshooting the daily range support level (S3) (1.2987), after which it traded in proximity to the psychological 1.3000 mark.