Analysis and forecast for EUR/USD on July 2, 2020

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Hello, dear colleagues!

The main event of yesterday was the publication of the minutes of the June meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve. However, this event did not have a significant impact on the price dynamics of the main currency pair of the Forex market. We will move on to the technical picture for EUR/USD a little later, but for now, we will talk about yesterday’s protocols and what is expected today.

Published minutes of the June FOMC meeting did not surprise market participants and therefore remained virtually unnoticed. The minutes again noted that the process of recovery of the US economy from the consequences of COVID-19 will be long, and will require strong support through monetary policy. The Fed management expressed a common view on a clear position on rates and asset purchases. Some of the Fed’s leaders expressed concern about soft monetary policy and its implications for financial stability. In the meantime, monetary officials of the Federal Reserve intend to better study the measure and degree of control over the yield curve. In general, the US Central Bank once again confirmed the significant uncertainty and economic risks associated with the rampant COVID-19. Let me remind you that in the United States, the situation with the spread of coronavirus continues to be the most alarming in the world. According to the latest data, the number of daily infected with a new type of coronavirus infection is close to 47,000. The center of infection is located in Texas.

Since tomorrow, the United States of America will be celebrating Independence Day, reports on the labor market will be published today at 13:30 (London time). As usual, market participants will focus on the unemployment rate, changes in the number of people employed in non-agricultural sectors of the economy, and average hourly wages. All forecasts for these and other current events can be seen in the economic calendar.

I would like to add that the main influence on the course of weekly trading will be determined today after the release of labor statistics from the United States. And tomorrow, due to the celebration of Independence Day and the closure of trading platforms in the United States, the market will be thin.

Daily

Following the results of yesterday’s trading, the euro/dollar currency pair strengthened, ending the session on July 1 at 1.1251. Here we can note two characteristic points. First, support was again provided near 1.1190. There are positions of large buyers who buy the pair again and again after falling to the area of 1.1200-1.1185. Secondly, yesterday the pair again failed to break up the Tenkan line of the Ichimoku indicator, which is located at 1.1258 and has been holding back the attempts of the quote to moving in the north direction for several days.

By the way, at the moment of writing, the pair is again trying to break through the Tenkan and is trading near 1.1268. I hope it is clear how important today’s trading will be for the technical picture and further direction of the quote. At the moment, the pair are aiming to complete the weekly trading with growth, however, it is still too early to make conclusions. Much will depend on the reaction of market participants to the US labor reports. However, tomorrow in the thin market there may be surprises, so you should be careful and cautious.

For today, the targets at the top will be the resistance of sellers at 1.1287, 1.1300, and 1.1348. Strong support is located in the area of 1.1185-1.1165.

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In almost all articles, it is recommended to open trades after confirming candle signals. At yesterday’s trading, such a signal was received – this is a circled reversal candle on the hourly chart. It gave rise to the growth of the pair and the opening of long positions on the euro/dollar pair.

Given today’s nonfarm, I do not rule out sharp multidirectional movements, so you should not rush to open deals. It seems that the main trading idea will be to buy after sharp short-term declines in the price zones of 1.1245-1.1235 and 1.1200-1.1170. We will talk about what will actually happen and what the actual figures for labor statistics from the United States will be in tomorrow’s article on the main currency pair.

Good luck with trading!

The material has been provided by InstaForex Company – www.instaforex.com