Hi, dear traders! On Thursday, EUR/USD settled above the retracement level of 161.8% (1.0574). From there, it could continue to climb towards the next Fibonacci level of 127.2% (1.0705). The new ascending trend channel indicates traders are somewhat bullish on EUR/USD. However, it is not very wide, and the pair could settle below it, if EUR/USD moves downwards. The pair has not moved in any clear direction today. Despite efforts by bullish traders throughout the week, EUR/USD only managed to reach 1.0574. Trading volume is low today due to a lack of events on the economic calendar today. The pair is unlikely to move upwards next week, and there have been no events that could give it support this week.
The geopolitical situation remains extremely volatile. The EU and the USA continue to impose more and more sanctions on Russia and supply Ukraine with weapons. Peace talks have come to a halt - both Moscow and Kyiv are uninterested in diplomacy. Ukraine is preparing for a counter-offensive this summer, while Russian forces are getting ready to defend occupied territories. The conflict is likely to continue until the end of 2022 at the very least. It is unclear, what could prompt a strong euro uptrend in this situation. The pair's reversal would be indicated by the current trend channel.
According to the H4 chart, EUR/USD continues to rise towards the retracement level of 100.0% (1.0638). The bearish CCI divergence indicates that the pair could resume its fall towards the Fibo level of 127.2% (1.0173). A bounce off the 100.0% level would also send the pair downwards. The mood of traders remains bearish, as indicated by the descending trend channel.
Commitments of Traders (COT) report:
During the last week covered by the report, traders opened 19,781 Long position and closed 3,126 Short positions, indicating an increasingly bullish trend. The total number of opened Long positions is now 228,000 against 211,000 Short positions. The gap between them is very low. Over the past several months, traders were largely bullish on EUR, despite the euro's slump. The situation remains practically unchanged at this point. The expectations set by the COT report do not match the real situation in the market.
US and EU economic calendar:
There are no events in both the EU and the US today.
Outlook for EUR/USD:
New short positions can be opened if EUR/USD bounces off 1,0638 on the H4 chart, with 1.0430 being the target. Earlier, traders were recommended to open long positions if EUR/USD closed above 1.0574 targeting 1.0705. These positions can be kept open, because the pair did not close below 1.0574.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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