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1 Hot and trading signals for the EUR/USD pair for June 5. COT report. Results of the ECB meeting added fuel to the fire. Buyers are still the king.
Bears continue to remain on the fence, despite a good opportunity to start selling the euro currency thanks to the...
EUR/USD 1H The EUR/USD pair continued its upward movement on the hourly timeframe on June 4, when everything seemed to be in favor of starting a downward correction. However, as we have already mentioned in fundamental articles, a rather strong and recoilless trend has now taken shape and it is completely inexpedient to guess the point of its possible completion. Thus, over the past day, the euro's quotes overcame the resistance level of 1.1312, and also went beyond the rising...

EUR/USD 1H

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The EUR/USD pair continued its upward movement on the hourly timeframe on June 4, when everything seemed to be in favor of starting a downward correction. However, as we have already mentioned in fundamental articles, a rather strong and recoilless trend has now taken shape and it is completely inexpedient to guess the point of its possible completion. Thus, over the past day, the euro's quotes overcame the resistance level of 1.1312, and also went beyond the rising channel, which indicates an even greater strengthening of the trend. The last target of buyers for this week is the resistance level of 1.1478, and the beginning of the correction can still be identified by consolidating the price below the rising channel and/or the Kijun-sen line. Up to this point, the bulls will continue to hold the market in their hands.

EUR/USD 15M

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The picture does not change at all on the 15-minute timeframe. The same two linear regression channels that are directed upwards are at your disposal, which indicate the absence of any signs of starting a correctional movement.

COT Report

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The latest COT report showed that professional traders unexpectedly started buying the euro during the reporting week. Suddenly - because, from our point of view, the fundamental background was not in favor of the euro. However, throughout the current week, the fundamental background was already in favor of the euro due to mass rallies and protests in the United States. Large traders found reason to open new 7524 purchase contracts last week. For the reporting week, only 3817 sales contracts were opened, if we take into account the most important group of traders, the professional players who work in the market with the goal of making a profit due to exchange rate differences. This information is already enough to understand that the mood of large traders for the reporting week has changed to bullish. The entire current week also remains with buyers, so in the new COT report we can see an even greater increase in purchase contracts among professional traders.

The general fundamental background for the EUR/USD pair remains neutral if we only take into account economic news. Yesterday, the results of the ECB meeting showed that the regulator expects serious deterioration in the economy compared to its own expectations in March. The PEPP program was immediately expanded to 600 billion euros and its terms were extended. As we have already mentioned, this does not mean that a total of 1.35 trillion euros will be enough to cope with the consequences of the pandemic and the crisis. In the same way, if not the fact that the total losses of the European economy in 2020 will amount to 8.7%, and not more. Thus, these figures were supposed to force traders to refuse buying the euro yesterday. However, either the macroeconomic background was again ignored, or traders considered that a +600 billion aid to the eurozone economy is good, however, the single currency has risen in price again. The United States also retains a negative background. Statistics from across the ocean continue to come weak and at times disastrous, which in principle is not surprising for times of crisis. Rallies and protests continue. The situation between China and the US continues to heat up. Thus, the main thing is that all this does not end in an explosion. Too many processes now can end completely unpredictably. Well, US President Donald Trump continues to lose support at this time, which significantly reduces his chances in November 2020.

Based on the foregoing, we have two trading ideas for June 5:

1) It is possible for quotes to grow further with the goal of the resistance level for the 4-hour chart at 1.1478. However, for this, the bulls just need to continue to stay within the rising channel and protect the level of 1.1312, which is left behind. Stop Loss levels can still be placed below the channel and gradually transferred to the top. Potential Take Profit in this case is 130 points.

2) The second option involves consolidating the EUR/USD pair under the ascending channel, which will allow sellers to finally join the game and begin to trade down. However, we recommend that you wait until the consolidation below the Kijun-sen line and only after that open sell positions with targets 1.1147 (March 27 high) and 1.1011 (Senkou Span B line). Overcoming each of the barriers will keep sales open. Potential Take Profit range from 60 to 190 points.

Forex analysis 5 Jun 2020, 00:10 UTC+00
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2 Forecast for EUR/USD on June 5, 2020
The euro has weak signs of a downward reversal on June
EUR/USD Yesterday's main event was the European Central Bank meeting at which it announced the expansion of the QE program - the volume of repurchased assets on the regulator's balance sheet was increased by 600 billion euros, that is, in total from the first program to 1.35 trillion euros. Asset purchases will continue for exactly one year. The euro rose by 104 points, although it would have been more understandable to pull it down on the monetary factor itself. The ongoing growth, of...

EUR/USD

Yesterday's main event was the European Central Bank meeting at which it announced the expansion of the QE program - the volume of repurchased assets on the regulator's balance sheet was increased by 600 billion euros, that is, in total from the first program to 1.35 trillion euros. Asset purchases will continue for exactly one year. The euro rose by 104 points, although it would have been more understandable to pull it down on the monetary factor itself. The ongoing growth, of course, involves the psychological nature of investors who are waiting every day for any news on the recovery of the economy.

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So, the euro has fulfilled the previously identified target of 1.1342. The euro has grown by 250 points since the beginning of the week and now investors can close speculative purchases, especially at the end of the week. The best reason for this could be today's data on employment in the United States. Data for May regarding new jobs in the non-agricultural sector are expected at -7.75 million, the general unemployment rate is projected to increase from 14.7% to 19.4%. Previous employment indicators tell us that today's data will be better than forecasts.

Our main scenario assumes a reversal of the euro with a subsequent decrease to 1.1130 - to the embedded line of the price channel of the monthly timeframe, similar to the one that occurred on March 10.

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A weak divergence formed on the four-hour chart for Marlin. But it could be enough for an actual reversal signal. There are two supports on the euro's path to the 1.1130 goal: 1.1265, 1.1200.

An alternative option involves continued growth in risk appetites. In this case, the target opens at 1.1415 after overcoming yesterday's high, then it can be followed by taking 1.1495, which is the March 9 high.

Forex analysis 5 Jun 2020, 02:59 UTC+00
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3 Overview of the EUR/USD pair. June 5. The ECB will distribute the money until mid-2021. The EU economy may decline by more than 8.7%, voiced by Christine Lagarde.
Despite the "black" color of the results of the ECB meeting, the European currency again became more expensive for...
4-hour timeframe Technical details: Higher linear regression channel: direction - sideways. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 227.4457 The EUR/USD currency pair started a long-awaited correction on June 4. It started and finished very quickly. In yesterday's reviews, we assumed that the European Central Bank will expand the program of recovery of the European economy after the crisis caused by the pandemic by several...

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 227.4457

The EUR/USD currency pair started a long-awaited correction on June 4. It started and finished very quickly. In yesterday's reviews, we assumed that the European Central Bank will expand the program of recovery of the European economy after the crisis caused by the pandemic by several hundred billion euros, which will mean even more easing of monetary pressure. In practice, this is what happened. The ECB's ultra-soft monetary policy became even softer, however, the regulator had nothing to do. The crisis has dealt a painful blow, and the EU economy needs to be saved while there is still something to save. But the reaction of traders to what is happening once again raised a huge number of questions. It should be noted immediately that when the results of the ECB meeting were published, the euro currency first soared up, and then immediately began a downward pullback. Thus, the results of the ECB meeting led only to a small spike in volatility (a total of about 70 points), no more. But the subsequent growth of the European currency was in any case illogical. However, we will try to look at the overall picture and try to figure out what happened yesterday and what to expect next from the euro/dollar pair.

Looking a little ahead, we will immediately say that we are waiting for a decline in the European currency quotes. The euro has risen very much in recent days and all this upward movement has been almost non-recoilless. Thus, at least a technical correction is needed. Further, the main factor that contributed to the strengthening of the European currency was the fall in demand for the dollar due to mass unrest in the United States, as well as due to the uncertainty of future relations between the United States and China. However, we believe that both of these factors cannot have a lasting impact on the EUR/USD pair. Riots, riots, and so on - this is certainly bad, however, when the whole world was engulfed by a severe economic crisis, there are a lot more other bad things that did not have any impact on the dollar. Thus, we believe that the fall of the dollar in recent days was nothing more than an accident or a technical necessity (since one of the currencies can not become cheaper or grow constantly).

In the European Union, the news was bad yesterday. Retail sales in April decreased by 19.6% year-on-year and by 11.7% month-on-month. Although these figures are better than experts predicted, they are not optimistic. The European Central Bank predictably left the key rates unchanged – the deposit rate at -0.5%, the credit rate at 0.0%. But most importantly, the regulator expanded the PEPP (Pandemic Emergency Purchase program) program by 600 billion euros and extended its validity period for six months, that is, until June 2021. Such actions of the ECB can only be regarded negatively since they mean that the Eurozone economy is in trouble and the initial 750 billion euros will not be enough to get out of the crisis. The ECB also said in its final communique that rates will remain at current values until inflation returns to the target 2% y/y. Recall that at the end of May, inflation in the EU was recorded at a level of 0.1% y/y.

Christine Lagarde herself said during a press conference that the ECB expects GDP to decline by 8.7% in 2020. In 2021, according to the head of the regulator, there will be an increase of 5.2%, and in 2022 – by 3.3%. Recall that at the last meeting of the ECB, the following forecasts were announced: 2020 - +0.8%, 2021- + 1.3%, 2022- + 1.4%. Thus, first, in just two months, the ECB has significantly changed its expectations for the worse, and second, it may do so again or several times at subsequent meetings this year. We do not recommend treating the announced figures as accurate and final. The EU economy is likely to lose more than 8.7% this year. The same applies to inflation. According to the head of the ECB, it will slow down in 2020 to 0.3%, accelerate in 2021 to 0.8%, and in 2022 to 1.3%. Christine Lagarde also once again noted that the European economy is facing an unprecedented downturn due to the "coronavirus" epidemic. "Huge job losses, declining incomes, and a high level of uncertainty about the economic outlook have led to a drop in consumer spending and investment," the ECB Chairwoman said. Lagarde also noted that some indicators show a slight recovery in economic activity, however, it is not enough to talk about the recovery of the economy.

Well, in the United States yesterday, only data on applications for unemployment benefits were published. The number of primary applications for the week of May 29 was 1.9 million (slightly higher than forecasts), the number of secondary applications for the week of May 22 was 21.5 million with a forecast of 20.0 million. Thus, the overall unemployment rate rose again after another week. Perhaps this was the reason for the new fall in the US currency?

On Friday, June 5, there will be no important or significant publications in the European Union. Thus, traders will have to focus on macroeconomic statistics from overseas (discussed in detail in the article on GBP/USD), as well as all the same events in the US that led the EUR/USD pair to 2.5-month highs. From a technical point of view, a downward correction has been brewing for a long time and we were waiting for it last Friday or Monday. Thus, as before, we do not recommend that market participants try to guess the possible point of price reversal down. It is best to follow the trend clearly, especially since on the hourly chart, quotes continue to move perfectly inside the ascending channel, signaling the absence of any corrections or even hints of them. Therefore, to identify the beginning of the correction, you need to either wait for the Heiken Ashi indicator to turn down or for the pair to exit the ascending channel on the hourly chart. And the last thing I would like to say is that the pound also reacted to the ECB meeting, although it did not apply to it. The British currency also resumed growth in pair with the dollar and this is the strangest thing. There are reasons to assume that the ECB meeting was not the reason for the new strengthening of the euro.

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The average volatility of the euro/dollar currency pair as of June 5 is 93 points. Thus, the value of the indicator is still characterized as "average". We expect the pair to move between 1.1256 and 1.1442 levels today. The reversal of the Heiken Ashi indicator downwards signals a round of downward correction, which is expected for several days in a row.

Nearest support levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading recommendations:

The EUR/USD pair continues its strong upward movement. Thus, after overcoming the psychological level of 1.1000, buy orders remain relevant, at this time - with the goals of 1.1442 and 1.1475, which are recommended to hold until the Heiken Ashi indicator turns down. It is recommended to return to selling the pair not before the price is re-anchored below the moving average line with the first goal of 1.0986.

Forex analysis 5 Jun 2020, 00:23 UTC+00
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4 Hot forecast and trading signals for the GBP/USD pair for June 5. COT report. Bulls need to capture levels 1.2642 and 1.2647 for the pound to continue growth
The upward movement may end near the local high of 1.2642. Buyers may need good reason to overcome this level
GBP/USD The pound/dollar pair, after a more or less tangible downward correction, resumed the upward movement and came close to the highs of April 14 and 30 - 1.2647 and 1.2642. These levels have not been reached at the moment, but the likelihood that the British pound will grow and end near them is high. The ascending channel failed to keep the pair inside, although we warned about this yesterday. As a result, we have a continuing upward trend, and the upward movement can...

GBP/USD

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The pound/dollar pair, after a more or less tangible downward correction, resumed the upward movement and came close to the highs of April 14 and 30 - 1.2647 and 1.2642. These levels have not been reached at the moment, but the likelihood that the British pound will grow and end near them is high. The ascending channel failed to keep the pair inside, although we warned about this yesterday. As a result, we have a continuing upward trend, and the upward movement can continue if buyers manage to overcome the important levels of 1.2647 and 1.2642. The entire trend is still supported by only one upward trend line, which runs quite far from the price. Therefore, sellers can wake up and begin to slowly sell the pair near the 1.2642 level. But we recommend that you wait for good sell signals and only then trade the pair for a fall.

GBP/USD 15M

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The upper linear regression channel turned sideways on the 15-minute timeframe, which is almost the only sign of possibly starting a downward correction and the end of an upward trend. Interestingly, while the lower channel is again directed up.

COT Report

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Despite the fact that in total the demand for the pound sterling did not change among all major market participants during the reporting week (a total of 8600 contracts for buying and selling were opened), professional traders mainly bought the pound sterling at +5205 contracts, and at -1,686 transactions for contracts that got rid of the sale. Thus, the mood of traders remains upward, and in principle, the situation has not changed at the end of last week. The GBP/USD pair continued to grow in the new week, which means that demand for the pound is not declining. The new COT report may show even greater strengthening of the position of large buyers.

The fundamental background for the British pound remains negative despite the fact that this currency continues to go up in tandem with the US dollar. There were practically no important macroeconomic statistics in the UK and the United States this week, but the last trading day of the week will slightly correct this omission. Data on unemployment, NonFarm Payrolls and changes in average wages for May will be released in the United States. We believe that the last report can be ignored with a high degree of probability, and the first two with a lower one. In any case, nothing unexpected in statistics from overseas. The number of new jobs will again be negative, and the unemployment rate may jump up to 20%. However, given that the dollar has sharply fallen over the past two weeks, these reports may not add to the benefits of the euro and the pound. Moreover, no matter how bad the reports from the United States turn out to be, quotes of both pairs could still significantly fall tomorrow, since the downward correction is still brewing in both cases. Thus, we believe that technique is the most important right now. No important information from the UK has been received in recent days, but the general fundamental background remains negative.

There are two main scenarios as of June 5:

1) The initiative for the pound/dollar pair remains in the hands of buyers, who so far stick with purchases while aiming for 1.2642 and 1.2664. However, opening new long positions now carries increased risks, since the pair is near a strong level. We recommend considering new purchases of the British pound only after overcoming 1.2642 and 1.2647. In this case, the bulls will confirm their serious intentions for further growth.

2) Sellers continue to remain in the shadow and will be ready to return to the market if buyers depart from the level of 1.2642 (1.2647). Short positions can even begin to be considered near the level of 1.2642 (on the rebound), but in this case they will be openly counter-trend, and therefore dangerous. We consider the minimum necessary condition for sellers to overcome the area of 1.2403 - 1.2423. Then it will be possible to sell the pair with the goals of the trend line (1.2355) and Senkou Span B line (1.2276). In this case, Take Profit will be from 45 to 120 points.

Forex analysis 5 Jun 2020, 00:10 UTC+00
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5 GBP/USD: plan for the European session on June 5 (analysis of yesterday's deals). Bulls returned to the market and are set to break the resistance 1.2611. COT report
The British pound strengthened yesterday after the European currency and returned to its weekly highs, testing them...
To open long positions on GBP/USD, you need: The British pound strengthened yesterday following the European currency and returned to its weekly highs, testing them again. But it was not possible to break through this range. As for yesterday's deals, if you look at the 5-minute chart, you will see that in the afternoon you could and should have bought the pound after returning to the level of 1.2552, which I mentioned in my review for the afternoon. This led to a good bullish momentum,...

To open long positions on GBP/USD, you need:

The British pound strengthened yesterday following the European currency and returned to its weekly highs, testing them again. But it was not possible to break through this range. As for yesterday's deals, if you look at the 5-minute chart, you will see that in the afternoon you could and should have bought the pound after returning to the level of 1.2552, which I mentioned in my review for the afternoon. This led to a good bullish momentum, but failed to go above the highs of the week, although there were attempts. It is not surprising that bears are protecting this resistance, since so much depends on it. As for the short-term technical picture of the pound, the bulls are focused on a break of resistance at 1.2611, consolidating on it can result in the pair's growth in the area of highs 1.2686 and 1.2744, where I recommend taking profits. Also, do not forget about how buyers are retaining support at 1.2552, where the moving averages are taking place, since forming a false breakout on it will be a signal to open long positions while expecting the bullish trend to continue. If the pair falls below this level, it is best to wait until the low of 1.2500 is updated or buy GBP/USD immediately to rebound from the larger level of 1.2439, where buyers will try to form a new lower border for the ascending channel. Today we will receive new data on COT reports, which may indicate a change in the balance of power in the market. Let me remind you that in the previous COT report, short non-commercial positions increased from 54,799 to 61,449, while long non-commercial positions also increased from 35,810 to 39,192. As a result, the non-profit net position became more negative and was at the level of -22,257 against -18,989, which so far keeps GBP/USD in the medium-term bearish trend.

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To open short positions on GBP/USD, you need:

Sellers act with caution, since the pound's growth is more connected with the dollar's weakness due to America's unrest, than with sterling's strength itself. Considering that important data on the US labor market will be released today, pressure on the British pound may return, provided that the reports turn out to be better than forecasts of economists. Bears need to form a false breakout in the resistance area of 1.2611, which will be an ideal signal to open short positions in the pair. This option will be able to return GBP/USD to 1.2552 support, a breakthrough of which will be a very important event for the current short-term outlook. A move below 1.2552 will force many speculative buyers to close long positions, which will lead to selling GBP/USD to the low of 1.2500 and 1.2439, where I recommend taking profits. However, updating these supports will only be considered as a correctional movement within the upward trend of May 18. In case the pound grows further, it is best to return to short positions only after updating resistance 1.2686 or even higher - from a high of 1.2744 while aiming for a downward movement of 30-35 points to end the day.

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Signals of indicators:

Moving averages

Trading is above 30 and 50 moving averages, which indicates another attempt by the bulls to build a new momentum.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

A break of the upper border of the indicator at 1.2630 will lead to a new wave of pound growth. In case the pair falls, support will be provided by the lower border at 1.2540.

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 traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long nonprofit positions represent the total long open position of nonprofit traders.
  • Short nonprofit positions represent the total short open position of nonprofit traders.
  • The total non-profit net position is the difference between the short and long positions of non-profit traders.
Forex analysis 5 Jun 2020, 04:59 UTC+00
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6 Technical Analysis of GBP/USD for June 5, 2020:
Pound gets away from the channel, new highs possible
Technical Market Outlook: The GBP/USD pair has made a new local high at the level of 1.2656 (at the time of writing the article)and is getting away from the upper channel line. The nearest support is seen at the level of 1.2580 and the next target for bulls is seen at the level of 1.2747. It is worth to notice, that if the level of 1.2485 is violated, then GBP/USD has made an overbalance of price, so the odds for another wave down are higher. The last swing low and technical support is seen...

Technical Market Outlook:

The GBP/USD pair has made a new local high at the level of 1.2656 (at the time of writing the article)and is getting away from the upper channel line. The nearest support is seen at the level of 1.2580 and the next target for bulls is seen at the level of 1.2747. It is worth to notice, that if the level of 1.2485 is violated, then GBP/USD has made an overbalance of price, so the odds for another wave down are higher. The last swing low and technical support is seen at the level of 1.2072, but there is still a long way to test this level of support.

Weekly Pivot Points:

WR3 - 1.2667

WR2 - 1.2540

WR1 - 1.2455

Weekly Pivot - 1.2311

WS1 - 1.2222

WS2 - 1.2062

WS3 - 1.2001

Trading Recommendations:

On the GBP/USD pair the main trend is down, but the local up trend continues. The key long-term technical support has been recently violated (1.1983) and the new one is seen at the level of 1.1404. The key long-term technical resistance is seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518) or accelerate (1.1404). The market might have done a Double Top pattern at the level of 1.2645, so the price might move lower in the longer-term.

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Forex analysis 5 Jun 2020, 06:21 UTC+00
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7 Forecast for AUD/USD on June 5, 2020
The Australian dollar could turn down on June
AUD/USD The Australian dollar made a mark at the target level of 0.6975 on Thursday. The Marlin divergence remains undisturbed. A price reversal from current levels is more likely. The first target of the decline is the level of 0.6830, followed by 0.6680. The signal line of the Marlin oscillator on the four-hour chart is rapidly approaching the border of the declining trend territory, despite yesterday's price increase. It even looks like divergence. The MACD line is...

AUD/USD

The Australian dollar made a mark at the target level of 0.6975 on Thursday. The Marlin divergence remains undisturbed. A price reversal from current levels is more likely. The first target of the decline is the level of 0.6830, followed by 0.6680.

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The signal line of the Marlin oscillator on the four-hour chart is rapidly approaching the border of the declining trend territory, despite yesterday's price increase. It even looks like divergence.

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The MACD line is approaching the first target level of 0.6830, which will strengthen this level and, accordingly, help the price overcome this level, fuelling a further decline. Price taking above 0.6976 opens an alternative short-term scenario with the price rising to 0.7080.

Forex analysis 5 Jun 2020, 02:59 UTC+00
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8 Hot forecast and trading recommendations for EUR/USD on June 5, 2020
The results of the meeting of the Board of the European Central Bank caused the euro to sharply grow, and the report...
The European Central Bank has announced that it has almost doubled its quantitative easing program, increasing it by another 600 billion euros, thereby expanding to 1.350 billion euros. After some deliberation, the euro then jumped with renewed vigor. And it is not strange, but in many ways, this is the reaction of investors to the ECB's actions. More precisely, not even actions, but words. The fact is that it is no secret to anyone that Europe is steadily slipping into deflation, which...

The European Central Bank has announced that it has almost doubled its quantitative easing program, increasing it by another 600 billion euros, thereby expanding to 1.350 billion euros. After some deliberation, the euro then jumped with renewed vigor. And it is not strange, but in many ways, this is the reaction of investors to the ECB's actions. More precisely, not even actions, but words. The fact is that it is no secret to anyone that Europe is steadily slipping into deflation, which implies not just an increase in the infusion of funds into the economy, but also a reduction in interest rates. ECB President Christine Lagarde did not say a word about the risks of deflation during her press conference. And we still cannot say whether this issue was discussed during the meeting itself. We can only learn more when the minutes of the ECB meeting is released. Although Lagarde once again uttered the familiar phrase that interest rates will remain at current or lower levels, until inflation reaches the target level of 2.0%. But then again, not a single word about lowering consumer prices. Indeed, this is more like a hint that the ECB does not plan to reduce interest rates. This precisely has become the main reason for consolidating the euro. After all, seeing the inflationary dynamics, investors have no choice but to expect the possibility of lower interest rates. Maybe not now, but at least in perspective. But it turns out that everything is not so bad. At least, this conclusion can be drawn from Lagarde's words.

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It is clear that the ECB meeting overshadowed all other events. At least no one was looking at European statistics. And it is quite peculiar. On the one hand, the business activity index in the construction industry increased from 15.1 to 39.5, which in general did not surprise anyone, since it is growing after other indices. The reasons for growth are exactly the same. After all, even though we have to admit a catastrophic decline in consumer activity, we have now begun to allow at least work. Not like a month ago, when all the construction sites just stood idle. So the increase in the index is associated exclusively with the gradual removal of restrictions previously imposed due to the coronavirus epidemic. But the pace of decline in retail sales accelerated from -8.8% to -19.6%. This is of course a little better than the forecast of -24.0%, but it does not get any easier. The recession is still just unprecedented. And it is noteworthy that data on retail sales were published shortly before the announcement of the results of the ECB meeting. So such a significant decline in sales, somewhat implied that Lagarde might at least hint at the possibility of a further reduction in interest rates.

Retail Sales (Europe):

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However, an additional factor in strengthening the euro was the data on applications for unemployment benefits in the United States. First of all, we are talking about repeated applications, the number of which began to grow again. The fact is that the number of repeated applications grew for ten consecutive weeks, which indicated an increase in the duration of unemployment and a constantly worsening situation on the labor market. That is, people simply could not find work. Last week there was a slight decline in the number of repeated applications, which was immediately perceived as a hint that the situation is beginning to improve gradually. However, all hopes went to waste, as the number of repeated applications increased again to 21,487,000. But the number of initial applications decreased to 2,284,000. Although their number is still more than ten times the normal weekly value.

Repeated Unemployment Claims (United States):

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Of course, we can arbitrarily say that the euro is heavily overbought and urgently needs at least a local correction, but apparently we will have to wait. The United States Department of Labor will publish a report today, and forecasts of its content are more likely to be horrifying. The unemployment rate, which is already at a record high of 14.7%, can rise to a fantastic mark of 19.5%. Although we do not have reliable data on what was the extent of unemployment during the Great Depression, since such statistics were not kept back then, we can only try to compare it with the current situation. In addition, the number of jobs should be reduced by another 8,870,000. At the same time, the number of jobs was already reduced by 21,407,000 over the previous two months. While under normal conditions, the number of jobs grew by around 200,000 per month. So the situation is really difficult, and signs of at least some improvements that everyone has recently begun to cling to are just an illusion.

Unemployment Rate (United States):

analytics5ed9f87f78328.jpg

From the point of view of technical analysis, one can see a rapid upward movement, during which the quote managed to overcome a number of price levels, forming a flat, and also call market tacts into question.

Regarding the current movement, it is worth highlighting the impulse candle during which the quote managed to go above the 1.1350 mark, which means that in three weeks the quote has passed more than 500 points.

In terms of a general review of the trading chart, the daily period, a similarity is recorded in the dynamics of fluctuations at the beginning of the year, where an upward movement was built at a similar rate.

It can be assumed that we are dealing with an inertial move against a background of high speculative interest, where we should not exclude the convergence of prices with a local high on March 9, which reflects the 1.1440/1.1500 area. It is worth considering that a rapid upward move will lead to overheating long positions, and as a result a technical correction will occur.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments have a constant upward trend, signaling a purchase.

analytics5ed9f8915ccad.jpg

Forex analysis 5 Jun 2020, 07:11 UTC+00
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9 Comprehensive analysis of movement options for EUR/GBP, GBP/JPY, and EUR/JPY (Daily) on June 2020
The first month of summer - EUR/GBP, GBP/JPY, and EUR/JPY in the H4 timeframe - development options for the movement...
Minor operational scale (Daily) The first month of summer - EUR/GBP, GBP/JPY, and EUR/JPY in the H4 timeframe - development options for the movement from June 5, 2020. ____________________ Euro vs Great Britain pound In June 2020, the development of the movement of the "main" EUR/GBP cross-instrument will continue in the 1/2 Median Line channel (0.8830-0.8960-0.9110) of the Minor operational scale forks - look at the animated chart for the details of movement within this channel 1/2...

Minor operational scale (Daily)

The first month of summer - EUR/GBP, GBP/JPY, and EUR/JPY in the H4 timeframe - development options for the movement from June 5, 2020.

____________________

Euro vs Great Britain pound

In June 2020, the development of the movement of the "main" EUR/GBP cross-instrument will continue in the 1/2 Median Line channel (0.8830-0.8960-0.9110) of the Minor operational scale forks - look at the animated chart for the details of movement within this channel 1/2 ML Minor.

A breakout of the lower border of the channel 1/2 Median Line of the Minor operational scale fork - support level 0.8830 - will determine the continued motion of the "main" cross-tool in the boundaries of the equilibrium zone of the Minor operational scale fork (0.8830-0.8685-0.8524) and Minute (0.8655-0.8560-0.8460).

If the upper limit of the channel 1/2 Median Line of the Minor operational scale forks is broken - resistance level 0.9110 - it will be possible to reach the EUR/GBP initial SSL line (0.9320) of the Minor operational scale forks.

The options for the EUR/GBP movement in June 2020 are shown in the animated chart.

analytics5ed91e1214586.jpg

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Great Britain pound vs Japanese yen

The development of the GBP/JPY in June 2020 will be due to the practicing of borders channels 1/2 Median Line of the Minuette operational scale fork (134.95-135.90-136.85) and Minor (137.90-134.50-131.90) - details of working out the boundaries of these channels 1/2 ML are presented on the animated chart.

If the support level of 131.20 on the lower border of the channel 1/2 Median Line of the Minor operational scale fork, together with the control line LTL (131.35) trading recommendations will make it possible to update the local minimum 129.28 and achievement of the initial line SSL Minor (128.85).

A joint breakdown of the upper boundaries of the 1/2 Median Line of the Minuette operational scales forks (resistance level 136.85) and Minor (137.30) will direct the development of the GBP/JPY movement to the borders of the equilibrium zones of the operational scales forks - Minute (139.10-141.50-143.45) and Minor (139.85-143.45-147.05).

Options for the movement of GBP/JPY in June 2020 are shown on the animated chart.

analytics5ed91df82336d.jpg

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Euro vs Japanese yen

The development of the movement of the EUR/JPY cross-instrument in June 2020 will depend on the development and direction of the breakdown of the range:

  • resistance level 122.00 - final Shiff Line of the Minor operational scale fork;
  • support level 121.05 - upper bound of ISL61.8 equilibrium zone of the Minor operational scale fork.

At the breakdown of ISL61.8 Minor - support level 121.05 - the development of the EUR/JPY movement can be continued within the boundaries of the balance zones of the operational scales forks - Minor (121.05-119.95-118.70) and Minute (118.70-117.40-116.20).

If the resistance level 122.00 is broken at the final Shiff line Minor and the initial SSL line (122.45) of the Minuette operational scale forks, followed by the maximum update of 122.84, the upward movement of EUR/JPY can be continued to the FSL (125.10) of the Minor operational scale fork.

Details of the development of the EUR/JPY movement in June 2020 are shown on the animated chart.

analytics5ed91ddb5b4f4.jpg

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The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers, and is not a guide to action (placing "sell" or "buy" orders).

Forex analysis 5 Jun 2020, 00:23 UTC+00
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