Free Trade Ideas

Welcome to Thursday’s trade! Business has certainly picked up this week as the Iran War appears to have entered its next stage. US PPI and the ECB interest rate decision have hit the newswires, adding more fuel to the fire. Let’s dive in!
During the US pre-market hours, US PPI came in at 1.1% for May, well above expectations of 0.7%. On the other hand, Core PPI posted a 0.4% mark for May, below estimates of 0.5%. The story here is fuel. Higher oil prices from the Iran War are having a major impact on inflation; that takes us to the European Central Bank (ECB).
The ECB has raised interest rates for the first time since 2023 to cope with rising energy prices due to Middle East tensions. During the London session, the ECB hiked rates by 25 bps to 2.25%, citing inflation pressures stemming from the Iran War energy spike. Here’s a portion of the statement:
“The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the Euro area.” In short: inflation is up, growth projections are down. This is the first move by the world’s central banks to manage financial fallout from the Iran War. For the EURCAD, a buy is now present on the 4-hour timeframe using the 9/20 EMA crossover strategy. Check out our Key Levels for more information on this Trade Idea. Statements are coming out of the White House on a near-hourly basis on the resumption of hostilities between Iran/US/Israel. We’ll cover the latest on today’s US session live stream. See you there! (1:00 PM EST, Switch Markets on YouTube)