EUR/USD 1H
Traders continued to retreat from the resistance area of 1.1328-1.1343 on the hourly timeframe on June 25 and worked out an ascending trend line by the end of the trading day, which continued to support traders to rise. The first attempt to overcome the trend line was unsuccessful, so for now, the bulls retain certain chances for the resumption of the upward trend. However, we believe that sellers have better chances now, therefore, we are waiting for the trend line to be overcome and the euro to fall further. It should also be noted that the pair overcame the important lines of Senkou Span B and Kijun-sen of the Ichimoku indicator on its way to the trend line, which also increases the likelihood of a continued decline.
EUR/USD 15M
Both linear regression channels turned down on the 15-minute timeframe, so the trend is now uniquely downward. There are currently no signs of starting an upward correction.
COT Report
The euro/dollar pair steadily rose until June 16 (the deadline, data for which is included in the latest COT report) and was only adjusted in recent days. According to the COT report, professional traders were busy during the entire reporting week not with opening purchase contracts, which could be assumed based on the direction the pair was moving, but with closing sale contracts. In just five days, professional traders closed almost 20,000 Sell contracts and opened 1,300 Long Euro contracts at the same time. Thus, strengthening the European currency was absolutely logical at that time. But for the second week in a row, we emphasize that large market players do not buy the euro, and therefore do not believe in the prospects of this currency. The euro grew for two weeks almost at the mere closure of contracts for sale by large speculators, which caused a skew of supply and demand for the euro. The pair went up about 170 points since Monday, after which almost the same went down, so it's hard to say how the mood of professional traders has changed over the current week. Most likely, we will not see major changes in the new COT report.
The general fundamental background for the EUR/USD pair on Thursday has slightly changed. In recent days, the euro/dollar has resumed its downward movement, so the market began to talk that the US dollar will dominate, but we would not make such high-profile conclusions. As we have already figured out in the fundamental articles, it is highly likely that the pair will now be traded in a wide lateral band (400-500 points), since the future of the entire global economy is now so uncertain that it makes no sense to make any forecasts. The same goes for the European and US economies. If we only take economic factors into account, then both economies require additional stimulus packages, but problems arise with the adoption of both. Democrats and Republicans cannot come to an agreement on this issue in America; while, it is not possible to persuade the northern countries to provide free help to the southerners in the European Union. Thus, both economies are in the same position in some way. It would seem that macroeconomic factors influenced the course of trading on Thursday, but, for example, the pound/dollar pair did not react to it in any way, so maybe it has nothing to do with strengthening the US currency. The United States and the European Union will not release important publications on Friday.
Based on the foregoing, we have two trading ideas for June 26:
1) Bears made an attempt to continue moving below the trend line, but it has been unsuccessful so far. Thus, we advise you to wait until we overcome this line and only open new sell orders with the targets of support levels 1.1112 and 1.1047 after that. Potential Take Profit range from 80 to 150 points.
2) On the other hand, buyers folded before the resistance area of 1.1326-1.1341, and now they need to go back to it and try to get a foothold higher again. We recommend that you wait until we overcome this area before buying the EUR/USD pair with the goal of the resistance level of 1.1417. Potential Take Profit in this case is about 70 points.
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