EUR/USD – 1H.
The EUR/USD pair continued to fall during Thursday and was under the corrective level of 61.8% (1.1919) by the end of the day. Thus, theoretically, the process of falling quotes can now be continued in the direction of the next level of the Fibo 76.4% (1.1837). However, I believe that today there is a very high probability of the pair starting to grow. It is supported by the fact that the pair has fallen by more than 200 points over the past two days. After such a strong fall, it is necessary to move up at least a little. Closing quotes above the level of 61.8% will allow traders to count on some growth in the direction of the Fibo level of 50.0% (1.1985). The information background during yesterday was very weak. The only report on inflation in the European Union did not affect the mood of traders.
They already knew that the consumer price index would be 2.0% in May, as the preliminary value of this indicator was released earlier. In addition, traders were still focused on the outcome of the Fed meeting, which turned out to be sharply in favor of the US dollar. Thus, yesterday can also be considered as having passed under the flag of the Fed. Let me remind you that the Federal Reserve system has not given any concrete signals that monetary policy will begin to tighten in the near future. However, the forecasts for the economy for 2021 have been raised, the number of FOMC representatives who believe that the rate will be raised in 2022 has increased, and Jerome Powell openly stated that the Fed is at the starting point for winding down the program to support the economy. These factors were enough for the US dollar to grow strongly, but any process comes to an end sooner or later.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes fell, 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 among traders. Closing below the Fibo level of 161.8% (1.2027) increases the probability of a further decline in the direction of the level of 1.1836. However, the chances of starting growth in the direction of 1.2027 are now also high.
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 17, the European Union released inflation for May, and in the United States - a report on applications for unemployment benefits. None of them had any impact on the euro/dollar pair.
News calendar for the United States and the European Union:
On June 18, the calendars of economic events in the United States and the European Union are empty, so there will be no information background 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, but after the Fed meeting, everything may change.
EUR/USD forecast and recommendations for traders:
It was recommended to sell the pair in closing quotes under the level of 100.0% (1.1990) on the hourly chart with a target of 1.1923. This goal has been achieved. I recommend that you wait for new sales. Then, I recommend buying the pair if the quotes close above the level of 61.8% (1.1919) on the hourly chart with targets of 1.1985 and 1.2051.
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.
