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FX.co ★ EUR/USD: plan for the US session on June 30 (analysis of morning deals). The euro has failed and is confidently returning to annual lows

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Forex Analysis:::2022-06-30T11:52:42

EUR/USD: plan for the US session on June 30 (analysis of morning deals). The euro has failed and is confidently returning to annual lows

In my morning forecast, I paid attention to the level of 1.0434 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened there. The buyers of the euro did everything to protect 1.0434, and they even managed to do it. A false breakdown at the beginning of the European session led to the formation of an excellent signal to buy the euro. As a result, the pair grew by more than 30 points. However, after some time, the bears returned the pressure on the pair and managed to break below 1.0434. The breakthrough took place without a reverse test of this level from the bottom up, so I could not enter short positions. In the afternoon, the technical picture changed slightly, while the strategy remained the same. And what were the entry points for the pound?

EUR/USD: plan for the US session on June 30 (analysis of morning deals). The euro has failed and is confidently returning to annual lows

To open long positions on EURUSD, you need:

Buyers are not going to do anything until the 1.0383 test takes place – the nearest support level, which will remain the last obstacle on the way to updating the annual lows. It is quite possible that in the afternoon, whatever the US data, traders will take profits at the end of the month, especially relying on good statistics. Therefore, even if the reports on the personal consumption expenditure index, the number of initial applications for unemployment benefits, and the Chicago PMI business activity index exceed economists' forecasts, the euro may strengthen its position – do not be surprised by this. As noted above, I am waiting for the update of the nearest 1.0383 level. Only after the formation of a false breakdown there, it will be possible to get a good signal to open long positions in the hope of trying to regain the 1.0481 area formed by the results of yesterday. A breakout and a top-down test of 1.0481 in the afternoon will deal a very strong blow to the bears' stop orders, which will allow the pair to break out to a larger resistance of 1.0525, from which the euro began to fall yesterday. The 1.0568 area will be a more distant target, but so far there are no prerequisites for such large growth. With the option of a decrease in EUR/USD and the absence of buyers at 1.0383, problems will fall on buyers like a snowball. In this case, I advise you not to rush into the market: the best option for opening long positions will be a false breakdown in the support area of 1.0321. I advise buying EUR/USD immediately for a rebound only from the 1.0255 level, or even lower – around 1.0194 with the aim of an upward correction of 30-35 points within a day.

To open short positions on EURUSD, you need:

The bears have made a successful attempt to break the lower limit of 1.0434 and are now counting on the continuation of the downward trend. If the euro rises in the afternoon after weak US data, only the formation of a false breakdown at 1.0434 forms a signal to open short positions with the prospect of further falling of the pair to the area of the nearest support of 1.0383. A breakdown and consolidation below this range, as well as a reverse test from the bottom up, will lead to an additional sell signal with the demolition of buyers' stop orders and reaching a new annual minimum in the area of 1.0321. It is unlikely that a serious struggle will unfold for it, so after a slight rebound up, we can expect a breakdown in this area with the 1.0255 update, where I recommend fixing the profits. A more distant target will be the 1.0194 area. In the case of an upward movement of EUR/USD during the American session, as well as the absence of bears at 1.0434, nothing terrible will happen for sellers, but I advise you to postpone short positions until the 1.0481 test, where the moving averages are playing on the side of bears. In the formation of a false breakdown, there will be a new starting point for the downward correction of the pair. You can sell EUR/USD immediately on a rebound from the maximum of 1.0525, or even higher – around 1.0568 with the aim of a downward correction of 30-35 points.

EUR/USD: plan for the US session on June 30 (analysis of morning deals). The euro has failed and is confidently returning to annual lows

The COT report (Commitment of Traders) for June 21 recorded a reduction in both long and short positions, which led to the formation of a larger negative delta, indicating the preservation of bearish sentiment. Last week, Federal Reserve Chairman Jerome Powell spoke, who confirmed his firm position on further raising interest rates in the United States in the hope of fighting the highest inflation in the last 40 years. The European Central Bank also intends to start raising interest rates next month, which limits the upward potential of the dollar against the euro. Given how risky assets are oversold against the dollar, we can expect a further recovery of the euro after the start of the cycle of tightening monetary policy in the eurozone. The COT report indicates that long non-commercial positions decreased by 11,432, to the level of 195,554, while short non-commercial positions decreased by 1,845, to the level of 211,159. The low exchange rate of the euro makes it more attractive, but at any moment traders can return to buying the US dollar. The reason for this will be the persistence of high inflation and the need for a more aggressive policy on the part of central banks. At the end of the week, the total non-commercial net position remained negative and decreased from -6,018 to -15,605. The weekly closing price rose from 1.0481 to 1.0598.

EUR/USD: plan for the US session on June 30 (analysis of morning deals). The euro has failed and is confidently returning to annual lows

Signals of indicators:Moving averagesTrading is conducted just below the 30 and 50 daily moving averages, which indicates the continuation of the fall of the euro.Note. The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.Bollinger BandsIn the case of growth, the upper limit of the indicator around 1.0480 will act as resistance.Description of indicators
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
Analyst InstaForex
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