EUR/USD – 1H.
The EUR/USD pair spent most of the day in one place near the level of 1.2117 on Wednesday. Only late in the evening, when the Fed began to publish the results of the meeting, an impressive rally began, during which the pair's quotes performed a drop of 125 points in just 2-3 hours. As a result, the pair fell to the corrective level of 100.0% (1.1990). The rebound of quotes from this level will allow traders to count on a reversal in favor of the EU currency and some growth in the direction of the Fibo level of 127.2% (1.2068). A close below the 100.0% level will increase the probability of a further fall towards the next corrective level of 76.4% (1.1923). By and large, all yesterday's information background was reduced to the Fed meeting. As I said before this event, traders did not show any desire to trade the pair. And even the results of the meeting itself can be treated differently.
After all, the Fed has not changed a single parameter of monetary policy. The rate remained unchanged, and the volume of the bond repurchase program remained unchanged. Moreover, the Fed made it clear that in 2021 it is not necessary to count on the curtailment of the stimulus program, as price stability and high progress in the recovery of the labor market have not yet been achieved. Thus, traders reacted with their purchases of the US dollar to the improved forecasts for the economy and inflation and the "dot plot" - a dot chart that displays the expectations of Fed members regarding the interest rate. This chart showed that the number of Fed members who expect a rate hike in 2022 rose to 7, and in 2023 - to 13. Although we all understand that this decision will depend on many factors, the main is the actual pace of economic recovery, which remains quite unstable. Nevertheless, this information was enough for traders to make the dollar grow stronger than in the previous seven days.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes also fell yesterday, completing a close under the downward trend corridor, which does not change the essence of what is happening. I would draw attention to the fact that a significant event caused such a strong growth of the dollar, and this does not mean that the US currency will continue to be in high demand. Thus, as it may sound, the US currency did not improve its growth prospects after yesterday's Fed meeting. Nevertheless, a close below the Fibo level of 161.8% (1.2027) increases the probability of a further fall in the direction of the level of 1.1836.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a reversal in favor of the US currency and consolidated under the corrective level of 161.8% (1.2027). Thus, on this chart, the fall process increased its chances in the direction of the Fibo level of 127.2% (1.1729).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle," which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On June 16, the results of the Fed meeting were summed up in America, which caused a severe drop in the pair. There was no other information background during the day.
News calendar for the United States and the European Union:
EU - consumer price index (09:00 UTC).
US - number of initial and repeated applications for unemployment benefits (12:30 UTC).
On June 17, the European Union will release a fairly important inflation report, and in the United States - a minor report on applications for unemployment benefits. Thus, the information background will be weak today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which showed a weakening of the "bullish" mood among speculators. During the week, the "Non-commercial" category of traders closed 5,525 long contracts and a total of 401 short contracts. Thus, the systematic disposal of long contracts began. But their total number in the hands of speculators remains almost twice as large as the number of short contracts. And in general, the changes are not so big now that we can talk about a complete change of mood from "bullish" to "bearish." I believe that speculators are still focused on buying the European currency.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair today if the quotes close below the level of 100.0% (1.1990) on the hourly chart with a target of 1.1923. On the other hand, I recommend buying the pair in case of a rebound of quotes from the level of 1.1990 on the hourly chart with targets of 1.2068 and 1.2117.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
