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EUR/USD – 1H.
The EUR/USD pair performed a rebound from the corrective level of 76.4% (1.1837). However, it returned to the level of 76.4% by the end of the trading day. A new rebound from this level will again work in favor of the European currency and the beginning of growth in the direction of the corrective level of 61.8% (1.1919). Closing the pair's exchange rate below the level of 76.4% will increase the probability of a further fall towards the next level of 1.1772. The information background of yesterday was quite strong. In the early morning, ECB President Christine Lagarde spoke, who expressed some concern about the spread of new coronavirus strains in Europe and noted a new threat from the virus. Also, in the morning, the index of business activity in the Eurozone manufacturing sector was released, which exceeded the expectations of traders and amounted to 63.4 points. And a little later, the unemployment rate in the European Union for June came out, which fell to 7.9%.
Thus, during the first half of the last day, the euro had an advantage. However, in the afternoon, everything changed. Strong data on applications for unemployment benefits from America brought the dollar back into the game, and it ended the trading day better than it started. The ISM business activity index in the manufacturing sector turned out to be worse than traders' expectations. However, expectations of a strong Nonfarm Payrolls report today probably played a role. Let me remind you that today in the United States, there will be data on the number of new jobs created outside the agricultural sector, which traders are very much waiting for. Also, today, the unemployment rate in the United States will be released, which is of great importance. Traders expect strong data from Nonfarm, as this week's ADP report has already shown positive dynamics. A strong report on the US labor market may help the US currency break through the level of 1.1837.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a consolidation under the corrective level of 61.8% (1.1890). Thus, the pair's decline can be continued in the direction of the next Fibo level of 76.4% (1.1782). The rebound of quotes will allow traders to count on some growth in the direction of the level of 1.1890. There are no emerging divergences in any indicator today.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a reversal in favor of the US currency and consolidated under the corrective level of 161.8% (1.2027). Thus, the fall of quotes can be continued in the direction of the Fibo level of 127.2% (1.1729).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation over the "narrowing triangle," which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On July 1, the calendars of economic events in the European Union and the United States were filled with important records. However, in general, the reaction of traders to all these events was restrained. Nevertheless, the information background was quite strong.
News calendar for the United States and the European Union:
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).
EU - ECB President Christine Lagarde will deliver a speech (12:30 UTC).
On July 2, the most important reports on unemployment and the labor market will be released in America, and another speech by Christine Lagarde will be held in the European Union. The information background promises to be strong today, and all the events of the day are scheduled for the same time.
COT (Commitments of Traders) report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders became more "bearish." Major players have closed 4,717 long contracts and opened 24,017 short contracts. Thus, the changes shown in the last report are really serious. Of course, we should not forget that these serious changes are related to the reaction of traders to the Fed meeting, which took place on Wednesday before last. Therefore, the next COT report may be much calmer.
EUR/USD forecast and recommendations for traders:
It was recommended to sell the pair if the quotes closed at the level of 61.8% (1.1890) on the 4-hour chart with a target of 1.1782. Now, these transactions should be kept open. I recommend new sales if the quotes close below the level of 76.4% on the hourly chart. I recommend buying the pair in case of a rebound of quotes from the level of 1.1782 on the 4-hour chart with the goal of 1.1890.
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 ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
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