EUR/USD – 1H.
Hello, traders! On June 25, the euro/dollar pair continued the process of falling, although it had previously made a consolidation over the downward trend corridor. Thus, I conclude that now traders do not know where to move and for how long. It's all the fault of the coronavirus, its second wave, which is beginning to slowly overwhelm the whole world. Most of all, this concerns America, which, in my opinion, took the virus the least serious of all the countries in the world. At first, the coronavirus was just perceived as common flu. After that, Donald Trump couldn't wait to open the economy faster. Now in America +40,000 new cases per day, which exceeds the April peak. Thus, the country may be engulfed by a new wave of the epidemic, which will again negatively affect unemployment, the labor market, GDP and the economy as a whole, even if the US government does not introduce a new "lockdown". The more sick people are, the more cautious people will be, and the lower their economic activity will fall. Moreover, the authorities of each US state have the right to impose a quarantine without the approval of the US president, which means that individual states may again "stop".
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair also continue the process of falling in the direction of the corrective level of 61.8% (1.1167). The pair's rebound from this level will allow traders to expect a reversal in favor of the European currency and a resumption of growth in the direction of the corrective level of 76.4% (1.1294). No indicator has any pending divergences today. Closing quotes below the Fibo level of 61.8% will increase the probability of a further fall in the direction of the next corrective level of 50.0% (1.1065).
EUR/USD – Daily.
On the daily chart, the euro/dollar pair again performed a reversal in favor of the US dollar and again performed a close under the corrective level of 127.2% (1.1261), which again allows traders to expect a fall in the direction of the Fibo level of 100.0% (1.1147). However, the growing number of cases of coronavirus in the United States may stop the growth of the dollar.
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 June 25, the European Union did not have any important economic reports. But in the US, there were reports on the volume of orders for durable goods, GDP, and applications for unemployment benefits. The first report was significantly better than traders' expectations, the second – completely coincided, and the third – was worse.
News calendar for the United States and the European Union:
EU - ECB President Christine Lagarde will deliver a speech (07:00 GMT).
US - main index of personal consumption expenditures (12:30 GMT).
US - change in the level of expenditure and income of the population (12:30 GMT).
On June 26, the most important event will take place in the European Union, where ECB President Christine Lagarde is scheduled to speak, which is always interesting. In America, there are only a couple of secondary reports.
COT (Commitments of Traders) report:
The latest COT report, released last Friday, showed very interesting changes. First, the group "Non-commercial", which is considered the most significant, strenuously got rid of short-contracts for the euro throughout the reporting week. It seems that this was the reason for the growth of the euro currency in the reporting week (until June 16). Large traders seldom opened long contracts. Secondly, hedgers "picked up" not all the contracts dropped by speculators, increasing only 7783 contracts for sale, but getting rid of 12,500 contracts for purchase. In total, the euro currency lost 25 thousand contracts. Thus, major market players lost interest in the euro currency during the reporting week in any case. The current week for the dollar and euro is ambiguous. One of the other currency is growing without a clear advantage.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend buying the euro currency with the goal of 1.1294, if the rebound from the corrective level of 61.8% (1.1167) is performed. I recommend opening new sales of the pair today with the target level of 50.0% (1.1065) if the closing level is 61.8%.
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.
