EUR/USD – 1H.
Hello, traders! The euro/dollar pair continued to grow on the hourly chart on June 1, and the upward trend corridor continues to characterize the current mood of traders as "bullish". Thus, traders continue to look favorably towards the European currency. The European Union and America now have a similar set of problems, which are caused by the same phenomenon - the coronavirus pandemic. The same crises, the same economic downturns. However, in America, almost nationwide riots broke out over the past week. Flashed, seemingly out of the blue. Everyone had heard about the case of the murder of a young black guy by a police officer. However, this is hardly the first such murder in recent decades. Nevertheless, riots, clashes with police, and arson are taking place in many US cities. It seems that it is the mass unrest in the country, where about 20-25 million people have lost their jobs recently, which caused the rather strong fall in the US currency, which continues at the beginning of the new week.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair resumed the growth process towards the corrective level of 61.8% (1.1167) after a minimal correction, which traders were ready for due to the bearish divergence of the CCI indicator. The rebound of the pair's exchange rate from this Fibo level will work in favor of the US dollar and the beginning of a fall in quotes in the direction of the already passed corrective level of 50.0% (1.1065). Fixing quotes above the Fibo level of 61.8% (1.1167) will increase the pair's chances of further growth in the direction of the corrective level of 76.4% (1.1294).
EUR/USD – Daily.
On the daily chart, the euro/dollar pair made a consolidation above the corrective level of 50.0% (1.1064), as well as above the downward trend corridor, which is no longer working. Therefore, the growth process can be continued in the direction of the corrective level of 61.8% (1.1167).
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair still performed a rebound from the lower line of the "narrowing triangle", which still allows traders to expect some growth in the long term in the direction of the 1.1600 level (the upper line of the "triangle"). Closing the pair under the "triangle" will work in favor of the US currency and a new, possibly long fall.
Overview of fundamentals:
On May 29, the European Union released the consumer price index for May, which was minimal +0.1% y/y. Reports from America also did not particularly please traders. Although the personal income of Americans unexpectedly increased by 10.5%, although the forecast was -6.5%, personal spending decreased by 13.6%. However, as I have already said, the main reason for the fall of the dollar lies in the mass riots in the United States.
News calendar for the United States and the European Union:
EU - index of business activity in the manufacturing sector (10:00 GMT).
US - ISM manufacturing index (16:00 GMT).
On June 1, business activity indices in manufacturing sectors are planned in Europe and the USA. However, now many more important topics in the world affect the mood of traders.
COT (Commitments of Traders) report:
The latest COT report, which was released on Friday, showed a very unexpected increase in the number of long contracts in the hands of the "Commercial" group. Their number increased by 7,500. Although this increase was "unexpected" only if we looked at the data from previous COT reports. For most of the past week, the European currency has been growing, so it could be assumed that demand among major market players for the euro is growing. I also note the overall increase in both long and short contracts by 9,000 and 10,500. As you can see, the total number of short contracts even showed a greater increase than long. This suggests that the markets are now driven by speculators. Namely, speculators opened short-contracts very reluctantly.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend selling the euro currency with the goal of 1.0964, if it is fixed under the ascending channel on the hourly chart. You could buy the pair by fixing the quotes above the horizontal trend line with the goal of 1.1065, and at the moment the targets are already the levels of 1.1167 and 1.1294.
Terms:
"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.
