EUR/USD – 1H.
Hello, traders! The euro/dollar pair made another attempt to close under the upward trend line on July 2. However, at the same time, it continues to trade above this line, so the overall mood of traders continues to be "bullish". In the event of a pullback of quotes from the trend line, the growth process can be resumed. I recommend setting goals on the higher charts. By and large, the pair is still trading in a narrow side corridor. Traders are still afraid to buy the US currency, as the coronavirus has become active again in the US and records for diseases are updated daily. Some states have re-introduced quarantine measures, and all this threatens a new "lockdown" and a new blow to the economy.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair performed an increase to the corrective level of 76.4% (1.1294), rebounding from it and turning in favor of the US currency. Thus, the process of falling quotes can be continued in the direction of the corrective level of 61.8% (1.1167). At the same time, to expect a convenient movement for work, it is necessary just for the pair to get out of the side corridor, limited by the levels of 1.1294 and 1.1167. Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair again performed a reversal in favor of the US currency and closed under the corrective level of 127.2% (1.1261), which allows traders to expect a continued fall in the direction of the Fibo level of 100.0% (1.1147).
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair rebounded from the lower line of the "narrowing triangle", which still allows traders to expect growth in the direction of the 1.1600 level (the upper line of the "triangle"). However, the lower charts are now in a more bearish mood, so working out this goal is being postponed for now.
Overview of fundamentals:
On July 2, the European Union released the unemployment rate for May, which rose to 7.4%. In America, the unemployment rate fell to 11.1%, average hourly earnings rose by 5%, and the number of people employed in the non-agricultural sector was 4.8 million in June. In general, the US statistics were quite good, however, this did not help the dollar in any way.
News calendar for the United States and the European Union:
EU - index of business activity in the service sector (08:00 GMT).
On July 3, the EU will release only the index of business activity in the service sector, which is unlikely to interest traders. In America, today is a holiday due to Independence Day, which will be celebrated tomorrow.
COT (Commitments of Traders) report:
The latest COT report, released last Friday, showed almost nothing. The "Non-commercial" group, which is the most important group, and is considered to be the one that drives the market, has opened a total of only 5,000 contracts, of which 3,000 are long and 2,000 are short. The "Commercial" group (hedgers) were more active and opened almost 11,000 short-contracts, however, as we can see, in the period from June 17 to 23, the euro/dollar pair was trading first down, then up, then down again. In other words, it is impossible to conclude that the mood of traders during this period of time was the same and did not change. And the changes in the balance of forces that the latest COT report showed do not allow us to draw any conclusions for the long term.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend buying the euro currency with the goal of 1.1496, if the close is made above the correction level of 76.4% (1.1294). It is more reasonable to sell the pair now with the target level of 61.8% (1.1167), since the rebound from the level of 1.1294 was performed.
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.