EUR/USD – 1H.
During the last trading day, the EUR/USD pair performed a reversal in favor of the US currency and fell to 1.2117. Closing the pair's rate under this level will work in favor of continuing the fall of quotes in the direction of the corrective levels of 127.2% (1.2068) and 100.0% (1.1990). The mood of traders on all charts is beginning to change to "bearish." However, yesterday, the growth of the US dollar was helped by the US reports on the labor market and business activity. Yesterday, in general, there was a fairly plentiful information background, so the pair moved very actively. In the morning, the European Union released the business activity index in the service sector, which increased by 0.1 points compared to April.
Further above, the ADP report on the change in the number of employees and its value for May was 978 thousand, although the markets were waiting for no more than 645 thousand. Such a strong increase in private-sector workers means that the US labor market is recovering as quickly as the entire US economy. Thus, this report allowed bear traders to become more active, buying up the US currency. The number of initial applications for unemployment benefits in the United States also pleased the bears, as their number was less than traders expected. However, this report was not the most important during the day. More important was the ISM services PMI, which rose from 62.7 to 64.0 in May. In addition, the Markit business activity index for the services sector was released, which also increased from 70.1 and 70.4. Thus, all the statistics from the US on Thursday were strong. Therefore, the US currency received huge support from traders.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes completed a new close under the ascending trend line and the level of 1.2223, allowing traders to count on the continuation of the fall in the direction of the corrective level of 161.8% (1.2027). There are no emerging divergences in any indicator today. The rebound of quotes from the level of 161.8% will allow us to count on a reversal in favor of the EU currency and the resumption of growth in the direction of the level of 1.2223.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair closed above the level of 161.8% (1.2027). However, at the moment, both lower charts indicate a very likely fall, so the data from them is more important.
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 3, there was a fairly large amount of economic information in the European Union and America, and traders did not lose sight of any reports and events.
News calendar for the United States and the European Union:
EU - retail trade volume change (09:00 UTC).
EU - ECB President Christine Lagarde will deliver a speech (11:00 UTC).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (11:00 UTC).
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12:30 UTC).
US - change in the average hourly wage (12:30 UTC).
On June 4, there will be even more significant events and reports in the European Union and the United States.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which again showed an increase in the "bullish" mood among speculators. The category of "Non-commercial" traders again increased long contracts, which were opened in the number of 3,781. In addition, speculators also got rid of 1,442 short contracts. Thus, large traders show their desire to continue buying the European currency, leading to even greater growth. In addition, I note that the total number of contracts for the European currency continues to grow and during the reporting week increased by 29 thousand, which indicates an increase in the interest of traders.
EUR/USD forecast and recommendations for traders:
I recommended selling the pair at a new close under the trend line on the 4-hour chart with targets of 1.2166 and 1.2117. Both goals have been worked out. New sales with targets of 1.2068 and 1.1990 while closing at 1.2117. I do not recommend buying the pair now, as there is a high probability of changing the direction of the trend.
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.
