EUR/USD. July 2. Results of the day. The producer price index in the European Union warns of a possible slowdown in inflation

4-hour time frame


The amplitude of the last 5 days (high-low): 68p - 43p - 34p - 42p - 90p.

Average amplitude for the last 5 days: 55p (45p).

The European currency started the minimum upward correction on the second trading day of the week, to which the MACD indicator has not even had time to react to, so it is weak. During today, only one macroeconomic report was published - a report on producer prices in the eurozone for May. It turned out that this index slowed down from 2.6% to 1.6% y/y. Such a report is a very bad forerunner of the future report on inflation in the EU, which has already slowed down to 1.2%. Thus, in the future, inflation could be the basis for the ECB to reduce the key rate in the negative zone. This indicates a knockout for the euro. However, let's not talk about sad things until this happens. Today there is information that the ECB is not ready to cut rates in July. However, it is noted that monetary policy easing is almost inevitable, and if it does not happen in July, it will happen in September. Recall that the trade issue between the United States and the EU is not over. Trump has claims to Brussels. Regarding duties on the products of the automotive industry, the decision was postponed to a later date, but Trump is not satisfied with the issue of subsidizing the Airbus concern and has expanded the list of European goods that may be affected in the future. Needless to say, for the euro currency, the introduction of any duties would be a low blow, as well as for the entire economy of the European Union. Based on this and taking into account the fact that the trade war will affect the US economy, we still believe that the European currency will continue to be the outsider in the euro/dollar pair.

Trading recommendations:

The EUR/USD pair started a weak correction. Thus, it is now recommended to expect its completion and re-sell the euro with targets of 1.1270 and 1.1239.

It is recommended to buy the euro/dollar pair no earlier than when the price consolidates above above the critical Kijun-sen line. However, bulls will need good fundamental reasons to do so.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.

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