4-hour timeframe

The amplitude of the last 5 days (high-low): 37p - 61p - 36p - 86p - 43p.

Average amplitude for the last 5 days: 53p (52p).

The EUR/USD pair ended the second trading day of the week with a new decline and also updated the local low. Today, there were enough factors for the European currency's fall. First, it is inflation in the European Union. The annual parameter fully complied with the forecast of 1.2% (however, this value in itself is extremely low), but the monthly figure showed an increase of only +0.1% in May, while the forecast was +0.2%. Secondly, an hour earlier, the head of the European Central Bank, Mario Draghi, spoke at a forum in Portugal and nevertheless touched upon the topic of the monetary policy of the European Union. He touched it casually, by and large, without saying anything "in the forehead." Draghi said that in the near future, the regulator will consider how to adapt the tools of monetary policy to negative forecasts on economic indicators. He also noted weak inflation and the fact that it may be necessary to stimulate the economy in order to return this indicator to the target levels of the ECB (2.0%). These statements were interpreted by traders almost as a willingness of the regulator to cut rates in the negative zone right now. We believe that the ECB may take such a step, but not in the near future. There is a lot of talk now that the Fed and the ECB can lower the key rate, but in fact the European Union could soften monetary policy a long time ago, since economic indicators and, in particular, inflation have not been pleasing to neither experts nor ordinary traders . But this did not happen, and Draghi regularly states that "if necessary," the instruments for stimulating the economy will be used. It seems that the traders realized quite quickly all the "flexibility" of Draghi's statement, and after a decline of 40 points, the fall in the euro stopped. From a technical point of view, the trend for the euro/dollar pair remains unambiguously downward.

Trading recommendations:

EUR/USD resumed its downward movement. Thus, we again recommend that you sell the euro with target levels at 1.1161 and 1,1146 and hold shorts until an upward reversal of the MACD indicator occurs.

It will be possible to buy the euro/dollar pair if traders manage to return above the critical line, with the first target of 1,1302. In this case, the initiative on the EUR/USD will be back in the hands of the bulls.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.