EUR/USD: Euro remains under pressure _06/07/2016

Trading recommendations

Sell ​​in the market. Stop-Loss 1.1080. Targets 1.1000, 1.0915, 1.0870, 1.0800

Buy Stop 1.1110. Stop-Loss 1.1070. Targets 1.1150, 1.1200, 1.1285, 1.1300, 1.1400, 1.1430, 1.1485, 1.1500


Technical analysis

Instability in the financial markets due to Brexit persists that led investors to stay in safer assets such as the yen and gold. The US dollar, despite the more moderate rhetoric of Fed representatives about the future of monetary policy in the US, is also in demand, especially against European currencies.

Brexit, of course, hit both by the pound and the euro. The pair EUR / USD, despite following the publication of the results of the referendum in the UK collapse, failed to correct nearly 270 points from the low of June near the level of 1.0915.

However, correctional growth stopped when approaching the resistance level 1.1200 (EMA200, EMA144 on the daily chart, EMA50 on the weekly chart), and the EUR / USD dropping the second consecutive day.

The EUR / USD remains inside the rising channel on the weekly chart, the lower boundary of which is now passing through a mark 1.0915 (the upper limit of the channel passes near the level 1.1785 - 38.2% Fibonacci correction of the last wave decline from the highs of 2014, EMA144 Weekly chart ).

Today, the calendar is scheduled for publication a number of important US macroeconomic indicators (at 12:30, 13:45, 14:00, 18:00 GMT), which may be the main drivers of the news for today.

Positive US data will give a positive impetus to the dollar and vice versa.

On the 4-hour, daily, weekly charts indicators OsMA and Stochastic are on the side of the sellers on the monthly - and deployed for short positions.

Support levels: 1.1000, 1.0915, 1.0865, 1.0750

Resistance levels: 1.1100, 1.1200, 1.1285, 1.1300, 1.1400, 1.1430, 1.1485, 1.1535


Overview and Dynamics

Despite the weak data on the US (the level of industrial orders in the US in May -1.0% vs. -0.9% and + 1.8% in April), the EUR / USD fell yesterday, losing 80 points.

Today is the ECB meeting, which also addresses issues related to Brexit. As the representative of the ECB Villeroy de Galo, Brexit consequences will be most serious for the UK, and although Brexit will have an impact on the economy of the euro area, "there is no reason for pessimism regarding Brexit”. The ECB, according to Gallo, mobilized to combat the effects Brexit.

At the same time, investors' anxiety about the state of the global and European economies remains, as evidenced by the strengthening of the dollar, particularly against the European currencies, as well as increased demand for yen and gold, the price of which has reached today a new 2-year high near the mark of 1370.00 dollars per ounce.

We are waiting for economic data from the US today. Between 12:30 and 14:00 (GMT) published in the US trade balance for May, the business activity index of the PMI at Markit, the index of business activity in the services PMI from ISM in the US in June. It is expected a slight increase in the index, which should support the dollar in the market, and vice versa.

Then at 18:00 published protocols from the last meeting of the Federal Committee on the Federal Open Market Operations ( "minutes FOMC”), the text of which market participants try to understand the prospects of higher interest rates in the United States.

As said yesterday the president of the Federal Reserve Bank of New York William Dudley, the outlook for US monetary policy remains uncertain.

On Friday at 12:30 (GMT) out data on the US labor market. If they also are weak, then the probability of rate hikes in the US this year will steadily tend to zero. It will support the couple, however, the euro will remain under pressure until the process of separating the UK and the EU will not end, as the ECB did not work out the plan of the least painful way out of this situation.