EUR/USD – 1H.
Hello, traders! On June 2, the euro/dollar pair on the hourly chart continued the growth process inside the upward trend corridor, without making any attempts to fix it above (trend strengthening) or below it (trend ending). Thus, the mood of traders remains "bullish". The key topic for the currency market now remains what is happening in America - riots, pogroms, rallies. "Fighting" has already reached the White House, where the police managed to disperse the rioters, and President Trump even had to go down to the bunker. However, the question now is: what is the US president going to do with this and when will it be possible to suppress popular unrest? It is clear to everyone that the longer the riots continue, the further the country's return to normal life is delayed. In addition to the riots, an important topic now is the confrontation with China, which is still maturing like a peach in the summer. But sooner or later the conflict will reach a climax and the "peach" will fall from the tree down. It has been reported at least twice that Beijing may stop fulfilling its obligations under the trade deal, or even cancel it altogether.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair continue the growth process, ignoring even the bearish divergence that was formed yesterday. The pair made a consolidation above the corrective level of 61.8%( 1.1167), thus, the growth process can be continued towards the next corrective level of 76.4% (1.1294). Fixing the pair's exchange rate under the Fibo level of 61.8% will work in favor of the US currency and the beginning of a fall in quotes in the direction of the corrective level of 50.0%.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair made a consolidation above the corrective level of 61.8% (1.1167), as well as above the downward trend corridor, which is no longer working. Therefore, the growth process can be continued in the direction of 1.1293.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair performed a rebound from the lower line of the "narrowing triangle", which still allows traders to expect 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 June 2, the European Union and the United States did not release any economic reports. Traders continue to monitor what is happening in the US and track information regarding possible actions by Beijing and Washington in the new trade standoff.
News calendar for the United States and the European Union:
Germany - unemployment rate (09:55 GMT).
EU - index of business activity in the service sector (10:00 GMT).
EU - unemployment rate (11:00 GMT).
US - change in employment from ADP (14:15 GMT).
US - ISM composite index for the non-manufacturing sector (16-00 GMT).
On June 3, Europe is scheduled to report on unemployment in Germany and the EU, as well as on business activity in services. In America, more important reports are the ADP report and the ISM index. It is the American reports that can influence the mood of traders.
COT (Commitments of Traders) report:
The latest COT report, which was released last 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 1.1065, 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 goal is already the level of 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.
