Trading idea for USD/CHF

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Good afternoon traders. A trading idea for USD / CHF.

The quotes of USD / CHF have been declining all throughout May and managed to break last month's low yesterday. Set limit orders to trigger a rebound and push the quotes back to a flat, in accordance with the plan below:

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Place limit orders from the current prices or below, to get a movement of about 50-100 pips.

Increasing volumes in the grid is not recommended.

If the first transaction already moves 100 pips, close the order.

Good luck!

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Indicator analysis. Daily review on GBP / USD for June 2, 2020

The pair traded upwards on Monday and tested 1.2510 - a 76.4% pullback level (presented in a blue dotted line) after that, the price went down. Today, a downward pullback is possible. Nothing is expected for economic calendar news.

Trend analysis (Fig. 1).

Today, a downward pullback is possible from the level of 1.2492 (closing of yesterday's candle) with the first target of 1.2460 - a 14.6% pullback level (presented in a red dashed line). If this level is reached, the downward trend may continue with the next target of 1.2420 (presented in a red dashed line). From this level, an upward pullback is possible.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - up.

General conclusion:

Today, the price may begin to move downwards with the target of 1.2460 - a 14.6% retracement level (presented in a red dotted line). If this level is reached, the downward trend may continue with the next target of 1.2420 (presented in a red dashed line). From this level, an upward pullback is possible.

Another possible scenario is an upward trend from the level of 1.2460 with a target at the upper fractal 1.2526 (presented in a red dashed line).

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Hot forecast and trading recommendations for GBP/USD on June 2, 2020

Sometimes it is better for Donald Trump to be silent otherwise his words can plunge anyone into a tantrum. Moreover, against the background of ongoing protests, any careless statement can be comparable to an atomic bomb. And in a good way, this is exactly what happened. The harsh statement by the president of the United States that if the protests did not stop immediately, then he would use the national guard to put things in order and kill all the hopes of restoring the dollar. But the dollar has just begun to show attempts to grow. And the worst thing is that Donald Trump made this statement amid reports that clashes with the police killed two protesters in Chicago.

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At the same time, the dollar had every reason to weaken against the pound during the European session. After all, the index of business activity in the manufacturing sector of the United Kingdom grew from 32.6 to 40.7. In other words, the British industry sees at least some hints of the possibility of improving the situation and hopes for a quick start to recovery. It is clear that this is a great reason for the pound's growth. Moreover, the index rebounded from its record low.

Manufacturing PMI (UK):

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Nevertheless, the dollar began to make confident attempts to grow at the beginning of the US session due to the same index of business activity in the manufacturing sector, which in the United States grew from 36.1 to 39.8. That is, the US industry sees at least some signs of improvement. Which is not surprising, because the restrictive measures introduced due to the epidemic of the coronavirus still begin to gradually be removed. So there really is a reason for optimism.

Manufacturing PMI (United States):

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Nevertheless, the pound clearly looks overbought, and any little things will be enough for it to begin to lose its position. And the reason for this could be data on the lending market, from which nothing good is expected. In particular, the number of approved mortgage loans should be reduced from 56,200 to 20,000. In addition, the volume of consumer lending may be reduced by another 4.2 billion pounds. So if Donald Trump does not bring the national guard to the streets of American cities, then the pound has no choice but to lose its position.

Mortgages Approved (UK):

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In terms of technical analysis, we see an intensive upward movement, where the quote was initially pinned above the 1.2350 level, and then accelerated in the direction of the subsequent coordinate 1.2500. The total move in two weeks reached more than 400 points, which means that the earlier downward measure of May 1 lost its influence. By detailing the last 10 hourly candles, you can see a clear slowdown within the boundaries of the fluctuation level of 1.2500.

Considering the trading chart in general terms, the daily period, it is worth highlighting the flat formation, within which the quote returned due to the upward movement.

We can assume a temporary price fluctuation within the 1.2500 level where the expansion of the amplitude to the scope of 1.2440/1.2525 is not excluded. Then you should use the method of trading for the breakdown of established boundaries.

We specify all of the above into trading signals:

- We consider short positions lower than 1.2470, towards 1.2440. Subsequent positions will be considered after a clear consolidation of the price below 1.2440.

- We consider long positions in terms of continuing the upward movement, in case of price consolidation above 1.2530, towards 1.2600.

From the point of view of a comprehensive indicator analysis, it can be seen that the indicators of technical instruments on hourly and daily periods signal a purchase due to the prevailing upward interest.

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Technical Analysis of GBP/USD for June 2, 2020:

Technical Market Outlook:

The GBP/USD pair has made a new local high at the level of 1.2524 (there is a potential Bearish Engulfing candlestick pattern made at the top of this move as well). The market has broken out of the ascending channel and the next target is seen at the level of 1.2588. The momentum is still strong and positive, so odds for a local up trend continuation after the range breakout are high. 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. The nearest support is seen at the level of 1.2406.

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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Technical Analysis of EUR/USD for June 2, 2020:

Technical Market Outlook:

The EUR/USD pair has been consolidating the recent gains in a narrow zone located between the levels of 1.1148 - 1.1100. The bulls are hovering just below the lower supply zone boundary located between the levels of 1.1148 - 1.1190. Please notice, the market conditions are now overbought and despite the positive and strong momentum the price might start a corrective pull-back towards the nearest technical support located at the level of 1.1050.

Weekly Pivot Points:

WR3 - 1.1499

WR2 - 1.1307

WR1 - 1.1241

Weekly Pivot - 1.1045

WS1 - 1.0959

WS2 - 1.0772

WS3 - 1.0680

Trading Recommendations:

On the EUR/USD pair the main long term trend is down, but the local up trend continues. The key long-term technical support is seen at the level of 1.0336 and the key long-term technical resistance is seen at the level of 1.1540. Only if one of this levels is clearly violated, the main trend might reverse (1.1540) or accelerate (1.0336).

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Technical Analysis of BTC/USD for June 2, 2020:

Crypto Industry News:

The Russian police initiated criminal proceedings against the former head of the local branch of the Russian Post Office, who managed to extract cryptocurrencies through the network of the office in the town of Mineralnye Vody in the southern part of the country.

According to a report published by the local news site, the Russian Investigative Committee of the SU for the Stavropol region, said the former head of the branch is suspected of illegal installation and extraction of cryptocurrencies using "professional equipment" using the company's power grid for almost six months. The suspect's activity continued until September 2019.

According to the local authorities responsible for the investigation, the Federal Postal Service in Stavropol's territory suffered more than 30,000 Russian rubles, or about $ 427. Suspects will be charged with "abuse of power" in accordance with the criminal code of the Russian Federation. The committee of inquiry is still in the phase of collecting evidence. Furthermore, the identity of the person detained by the police has not been disclosed to the media because the investigation is still pending and no criminal prosecution has yet been brought.

A similar case occurred in March in St. Petersburg, when information appeared about an operation carried out by the Russian police to capture Bitcoin miners who stole $ 200,000 of electricity every month to extract cryptocurrency. Criminals managed to establish eight locations with a sophisticated infrastructure that connected their mining equipment directly to a public source of electricity.

Technical Market Outlook:

The BTC/USD pair has reclaimed the level of $10,000 as anticipated and violation of this level will be a very bullish signal. Now the bulls are testing the level of $10,000 from below and if the market starts to bounce, the next target is the last local high seen at $10,343 and then at $10,430. Please notice, that there is developing bearish divergence between the price and momentum seen on the H4 time frame chart.

Weekly Pivot Points:

WR3 - $11,128

WR2 - $10,392

WR1 - $9,960

Weekly Pivot - $9,277

WS1 - $8,866

WS2 - $8,158

WS3 - $7,756

Trading Recommendations:

The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred until the level of $10,791 is clearly violated. The key mid-term technical support is located at the level of $7,897.

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ECB is preparing to take control on pumping the markets with liquidity; Overview of EUR and GBP

The production ISM in the United States grew to 43.1p. in May against 41.5p a month earlier, but the result, firstly, is still lower than forecasts, and secondly, a number of key sub-indices continue to show confidently poor dynamics, increasing the chances of a quick completion of the current period of optimism. The employment index was 32.1%, that is, the labor market continues to decline actively, and the chances of seeing decent nonfarm results on Friday are declining. For all components of the ISM index without exception, the situation is similar - they are all below 50p, which means a continued decline in activity in the sector, and not the beginning of recovery.

The number of bankruptcies in the United States has peaked since May 2009, so pressure on stock indices will increase, and the Fed will have to look for ways to maintain a falling stock market during severe unemployment. So far, this problem has not come ahead, but after Friday, it will most likely contribute to the completion of the current wave of optimism.

EUR/USD

A key meeting of the ECB will take place on June 4, at which, as expected, the QE program will receive additional support, the range of estimates for future expansion lies in the range from 400 to 750 billion euros. The ECB is subjected to a massive "bombardment" - one or the other structures declare the need to expand the asset purchase program and offer their own calculations.

Last week, the Franco-German plan to create a stabilization fund was actively discussed. The European Commission proposed its recovery plan for 750 billion euros, and the main intrigue is whether the ECB will confirm market expectations. The need to expand support is justified, first of all, by the growing threat of deflation and the need to support the labor market.

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Apparently, investors are counting on the best. Judging by the CFTC report, the excess of the euro remains significant, despite a slight decline in recent weeks. The spot price broke through the calculated level of EUR/USD and went significantly higher, and the estimated price also began to turn up, indicating that the equilibrium point will rise higher in the near future.

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The euro will try to consolidate above the March maximum of 1.1150, counting on the ECB not deceiving the expectations of the markets, and will go to 1.1493 if the buyback program increases by at least 500 billion euros. In this regard, only disappointment with the results of the ECB can stop growth.

GBP/USD

The British pound is significantly behind the risk-sensitive commodity currencies, which are actively playing back the losses of the last three months. If the main risk of the last few years was the Brexit squeak, then this year COVID-19 and a large current account deficit came to the fore, which led to a cumulative effect on the background of a sharp slowdown in investment on the background of Brexit.

If the main market fears associated with COVID-19 continue to decline, Brexit will be in the foreground again. The third round of negotiations on future EU-UK relations ended on May 15 without a breakthrough, with both sides actively accusing each other of unrealistic demands. On June 1, the fourth round began, which should end before July 1. Given the fact that there is still no significant rapprochement between the parties, the risk of reaching December 31 (the end of the transition period) both without agreement and without a plan to extend the transition period is great.

As a result, investors will proceed from the increased risks, which will automatically lead to a weakening of the pound in the short term.

As for the CFTC reports, the net short on GBP increased by $ 262 million to the highest level since the beginning of December, the estimated level of the fair price is lower than the spot price and has a tendency to decline, which limits the chances of the pound to continue recovering after commodity currencies.

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GBP/USD pair is currently trading near a strong resistance zone of 1.2490/2520, the next resistance is 1.2650, the chances of rising to it are low, and they are primarily associated with the exit from the quarantine restrictions. It is more likely to resume the decline, especially if the wave of optimism goes down, the decline may be without correction to the resistance zone of 1.2240 / 90.

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Technical Analysis of ETH/USD for June 2, 2020:

Crypto Industry News:

The Swiss Financial Market Surveillance Authority (FINMA) authorized InCore as the first business-to-business to conduct transactions on digital assets, enabling clients worldwide to access the service and conduct transactions at the bank.

The official announcement is an important step in creating a blockchain-friendly environment in the entire EU banking sector. InCore Bank is the first Swiss business-to-business bank approved to operate in the field of cryptography. The company now allows institutional clients to trade, store and transfer digital assets. FINMA also allowed the bank to develop tokenization capabilities.

The bank has already cooperated with Inacta AG, an independent Swiss IT consulting company that provides information and management of cryptocurrencies. Maerki Bauman & CO is the new transaction client of InCore digital assets. Local media consider this institution to be one of the best qualified banks in the sector. The company's management confirmed that the bank plans to develop blockchain strategy in the coming months. It also plans to provide brokerage, care and transfer services to security tokens.

Earlier, there was information about a risk warning issued by FINMA about Swiss money laundering using blockchain technology. However, on February 7, the Swiss regulator passed a law on anti-money laundering. The threshold for unidentified cryptographic transactions has been lowered from 5,000 Swiss francs to 1,000 Swiss francs, which is about $ 1,020.

Technical Market Outlook:

The ETH/USD pair has hit the 261% Fibonacci extension target located at the level of $247.36 and is currently trading above the upper channel line. The next target for bulls is seen at the level of $252.03 and $259.81, but due to the clear bearish divergence built on H4 time frame chart, a local pull-back is probable. The nearest technical support is seen at the level of $238.68 and $225.84.

Weekly Pivot Points:

WR3 - $307.85

WR2 - $277.87

WR1 - $257.91

Weekly Pivot - $226.70

WS1 - $208.30

WS2 - $176.78

WS3 - $157.13

Trading Recommendations:

The larger time frame trend on Ethereum remains down and as long as the level of $288 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred. The next key technical support is seen at the level of $174.82.

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Indicator analysis. Daily review on EUR / USD for June 2, 2020

Trend analysis (Fig. 1).

Today, a downward pullback is possible from the level of 1.1137 (closing of yesterday's candle) with the target of 1.1079 - a 14.6% pullback level (presented in a red dashed line). From this level, the price may resume its upward movement, with the target of the upper fractal 1.1155 (presented in a red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - up.

General conclusion:

Today, the price may begin to move downwards from the level of 1.1137 (closing of yesterday's candle) with the target of 1.1079 - a 14.6% retracement level (presented in a red dashed line). From this level, the price may resume its upward movement, with the target of the upper fractal 1.1155 (presented in a red dashed line).

Another possible scenario is a downward trend from 1.1155 - a 14.6% retracement level (presented in a red dashed line) with the target of 1.1033 - a 23.6% retracement level (presented in a red dashed line).

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USD/JPY. US-China Conflict, Berlin Mediation, and U.S. Riots

Traders of the USD/JPY pair ignored the general weakening of the US currency, which was observed at the start of the new trading week. Despite the fact that other pairs of the major group showed increased volatility yesterday, the yen still fluctuates within a narrow range flat when paired with the greenback, without leaving the frame of the 107th figure. The pair has been in this price range for the third week, or to be more precise, since May 19. The case when "the top can't, the bottom doesn't want to" - the general fundamental background does not contribute to the growth of anti-risk sentiment, while both the yen and the dollar are under the yoke of their own problems. Market participants cannot grasp any argument of a fundamental nature in order to break out of the above price range. Even the US-China conflict, when examined in detail, does not look as unambiguous as at first glance.

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Let me remind you that last year the USD/JPY pair reacted quite sharply to the process of trade negotiations between the United States and China - after all, the prospects for the global economy were at stake, as it was rightly believed then. The parties managed to conclude the first stage of the deal, but after a few months the world was faced with the most powerful coronavirus crisis, so now the financial world is already concerned about the prospects of the recovery process. The political tensions between Beijing and Washington are of concern in this context - after all, if the superpowers deploy hostilities in the economic field, the global economy will receive an additional blow that will exacerbate the negative consequences of the pandemic.

Such a small background allows us to understand why the pair (in particular) and the foreign exchange market (in general) essentially ignore the political conflict between the United States and China, while the dollar's reaction is short-term. For one simple reason: for all the tensions, the parties do not intend to review the trade deal concluded last fall. Of course, further dialogue is questionable - it is difficult to imagine that representatives of countries in the near future will sit down at the negotiating table as if nothing had happened. But on the other hand, experts did not expect any quick solutions here - even before the coronavirus it was clear that the United States would discuss the second part of the agreement after the presidential election. After all, if the White House is led by Joe Biden, the negotiation process may go in a slightly different vein.

In other words, the market is relatively calmly watching the "game" of the two superpowers, as the leaders of these countries bypass the most painful topic for traders. Pay attention to the reaction of the dollar index to recent events: following a press conference from Donald Trump, this figure slightly increased on Friday, showing a surge in anti-risk sentiment. But the index began to lose ground again when trading began on Monday. Toward the close of the European session, China reacted to Trump's words - and the dollar similarly tried to recover. But the index lost ground during the US session. All this suggests that traders only reflexively react to the corresponding news flow: the US-Chinese conflict (so far) cannot fundamentally change the existing alignment of forces in the foreign exchange market.

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In addition, yesterday it became known that Germany intends to become a mediator in the conflict between the United States and China. According to German Foreign Minister Heiko Maas, during the six-month presidency of the European Union in the second half of this year, Germany "intends to make efforts to resolve the conflict between Beijing and Washington." According to him, the Europeans are not interested in the differences between these countries becoming insurmountable. He also confirmed that the planned EU-PRC summit will be held in Leipzig in September, which could become a platform for wider negotiations. This rhetoric of a German senior official put pressure on the dollar. Speaking directly about the pair, then the bears were able to organize a downward momentum, which, however, was limited to a daily low of 107.39.

In general, the fundamental picture for the pair consists mainly of three main components. Firstly, this is the US-Chinese conflict, and secondly, the weakening of quarantine measures in key countries of the world and riots in the United States. And if the first two factors cancel each other out (at least in the context of USD/JPY), then the latest events in the United States exert local pressure on the greenback. According to recent data, more than four thousand participants in the riots were detained in the United States, five people were killed. Trump called on American governors to use the National Guard to clean up the streets. At the same time, in a number of cities, police began to express solidarity with the protesters. In particular, a local sheriff joined in the protest in the town of Flint, in Michigan. Curfews have been imposed in at least 40 US cities.

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On the one hand, riots in the United States have only an indirect effect on the foreign exchange market. Traders are concerned about the unprecedentedness of recent events - the protests over the murder of George Floyd are called the largest in the US in recent decades. President Donald Trump was even forced to take cover in a bunker when the rally was held under the walls of the White House. In other words, local protest actions have grown into something more, and this worries traders. But if the degree of incandescence decreases, this fundamental factor will quickly disappear.

To summarize the above, we can conclude that the pair will soon be trading in the flat in the near future and further: the upper price ceiling will be limited to 108.10 (two-month price high), while the support level is located at 107.00 - this is the line Kijun-sen on the daily chart. If we talk about the short term, here the technical picture is in favor of rising prices - on the 30-minute chart, the Ichimoku indicator generated a bullish Parade of Lines signal, and the price itself is between the middle and upper lines of the Bollinger Bands indicator. The intraday target for the upward movement is 107.90 (this week's high).

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Elliott wave analysis of GBP/JPY for June 2, 2020

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GBP/JPY has finally broken above key resistance at 133.19 making this count our preferred count. In the short-term, we see solid resistance at 135.10 that will be able to cap the upside temporary for a corrective dip to 133.75 before pushing higher again through resistance at 135.10 towards 141.06.

R3: 135.45

R2: 135.10

R1: 134.75

Pivot: 134.30

S1: 134.09

S2: 133.82

S3: 133.75

Trading recommendation:

We are long GBP from 131.95 and we will move our stop higher to 132.45

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Elliott wave analysis of EUR/JPY for June 2, 2020

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EUR/JPY continued to rise. It could move closer to the 200% extension target at 120.24 before completing wave iii/ and setting the stage for a correction in wave iv/ towards 118.20. This correction should be a complex correction as wave ii/ was a simple zig-zag type of correction.

In the short-term, a break below minor support at 119.39 will indicate that wave iii/ has completed and wave iv is in motion towards 118.20.

R3: 120.64

R2: 120.24

R1: 119.98

Pivot: 119.56

S1: 119.39

S2: 118.88

S3: 118.20

Trading recommendation:

We are still long 25% of the original position from 115.65 and we will re-buy 75% at 118.30

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EUR/USD to test 1.1147 June 02, 2020

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The EUR/USD has gained ground amid the protests the US caused by the death of George Floyd by US law enforcement. The police brutal actions already have been criticized across the country and across the globe, e.g. in London. Fiber benefitted from this news. EUR/USD is edging higher to Pitchfork Channel. The pair may test liquidity pool at 1.1147 and then go to 1.1150 as long as it does not drop and close bellow the 1.1081 level.

The overall bias for EUR/USD is bullish.

(Disclaimer)

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NZD/USD approaching resistance, potential reversal

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Trading Recommendation

Entry: 0.63438

Reason for Entry: Horizontal swing high resistance, 127.2% fibonacci extension and 161.8% fibonacci retracement

Take Profit: 0.61644

Reason for Take Profit: Horizontal overlap support

Stop Loss: 0.64478

Reason for Take Profit: Horizontal swing high resistance

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GBP/USD: plan for the European session on June 2. COT reports (analysis of yesterday's deals). Pound strengthens ahead of

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

The British pound continued to grow against the US dollar yesterday, while traders wait for good news on the conclusion of a trade transaction between the UK and the EU. The next round of negotiations will begin today. If you look at the 5-minute chart, you will see how yesterday, the buyers did an excellent job with the second test and consolidated above the resistance of 1.2414, from which it was possible and necessary to sell yesterday morning. A break of this range in the afternoon led to a powerful bullish momentum and updating resistance 1.2508, near which the main trade is now conducted. However, if we look at the Commitment of Traders (COT) reports for May 26, we will see that a very large increase in short positions was recorded, while long non-profit positions showed a slight increase, which indicates a gradual return of interest of British pound sellers to the market at current highs. The preponderance remained on the side of the sellers even despite the pair's large growth since mid-May of this year. The COT report indicated that short non-profit positions increased from 54,799 to 61,449 during the week, while long non-profit positions also increased from 35,810 to 39,192. As a result, the non-profit net position became even more negative and turned out to be at the level of –22,257, against –18,989, which so far indicates that the medium-term bearish trend has remained in GBP/USD. As for the intraday strategy, the bulls need to defend support 1.2439, a return to which can happen very quickly today in the morning. Moving averages are also visible at the same level, from which the pair can rebound. Forming a false breakout in this range will be a signal to open long positions in order to grow to resistance 1.2508. An important task for the bulls to maintain an upward momentum will be to break and consolidate above this range, with the test already upside down on the volume, which will lead to forming a new buy signal based on updating the highs of 1.2557 and 1.2597, where I recommend taking profits. If the pressure on the pound persists, and there is no major movement upward from the 1.2439 level, it is best to pause with long positions and buy for a rebound from the lows of 1.2376 and 1.2290, counting on a correction of 35-40 points inside the day.

To open short positions on GBPUSD, you need:

Pound sellers urgently need to return the market to their control, and this can only be done after consolidating under the support of 1.2439, where the moving averages are held. This will then increase the pressure on the pair and lead to a test of larger support at 1.2376, where I recommend taking profits. However, it will only be possible to talk about resuming the downward trend after breaking through the low of 1.2290. A very important task for sellers is to prevent the breakout of resistance 1.2508, forming a false breakout there in the first half of the day will then be a signal to open short positions in the pound. A lot will depend on negotiations between the UK and the EU. If at least minimal progress is achieved, then it is best to return to short positions after updating the high of 1.2557, or from larger areas 1.2597 and 1.2638, counting on a correction of 30-40 points within the day.

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Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates a possible continuation of the bull market in the short term.

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

In case the pair grows further, the upward movement will be stopped near the upper border of the indicator at 1.2550. A break of the middle border of the indicator in the area of 1.2470 will increase pressure on the pound.

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 short and long positions of non-profit traders.
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EUR/USD: plan for the European session on June 2. COT reports (analysis of yesterday's deals). Euro buyers are preparing

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

Yesterday's attempts to break above resistance of 1.1139 in the US session again failed. If you look at the 5-minute chart, you will see how the bears every time they approach the level of 1.1139 again actively sold the euro, which kept the pair in the side channel at the moment. However, in favor of buyers, it is worth noting the formed "triangle" technical model, a breakthrough of which can lead to a new bullish momentum. The Commitment of Traders (COT) reports for May 26 recorded a sharp increase in both long and short positions, which indicates the continued high interest in buying the European currency at current prices and the very likely continuation of the bull market. In the report, one can observe the growth of short non-commercial positions from the level of 95,194 to the level of 99,812, while the long non-commercial positions jumped much more seriously, from 167,756 to 175,034. As a result, the positive non-commercial net position also increased and amounted to 75,222, against 72,562, which indicates an increase in interest in purchases of risky assets at current prices. As for the intraday strategy, further movement will depend on whether the bulls manage to gain a foothold above the 1.1139 range or not. Important fundamental statistics are not expected to be released today, and therefore, only after a successful breakout of the 1.1139 level and the upper border of the triangle, I recommend continuing to open long positions with the main goal of updating the high of 1.1183, and reaching a larger level of 1.1231, where you can take profit. If EUR/USD does not grow above 1.1139 in the morning, it is best to postpone purchases and wait for the euro to correct in the support area of 1.1085, or open long positions immediately to rebound from the larger lows of 1.1034 and 1.0994.

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

Sellers have once again tried to stop the bull market today in the Asian session and are actively not letting the pair go above resistance 1.1139. Now the bears need to wait for another false breakout to form in this area, which will be the first signal to open short positions, the goal of which will be support 1.1085. Consolidating below this level will lead to a more serious sale of EUR/USD to the area of lows 1.1034 and 1.0994, where I recommend taking profits. In case the euro grows further in the first half of the day, it is best to return to short positions to rebound from a high of 1.1183, or even higher, from a larger resistance of 1.1231, based on a correction of 20-30 points by the end of the day. Given that there is no way out of important fundamental statistics today, buyers may be left without serious support after breaking through the upper border of the triangle in the resistance area of 1.1139, so a breakout of the lower border of this technical figure will also be a signal to open short positions.

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Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the possible end of the bull market.

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 boundary of the indicator in the region of 1.1140 will lead to a new upward momentum of the pair. A break of the lower border of the indicator in the area of 1.1105 will increase pressure on the euro.

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 short and long positions of non-profit traders.
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USDCAD bouncing from 1st support, further upside!

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Trading Recommendation

Entry:1.3512

Reason for Entry: 100% fibonacci extension

Take Profit :1.3728

Reason for Take Profit: Horizontal swing high resistance, 38.2% fibonacci retracement

Stop Loss: 1.3420

Reason for Stop loss: 127% fibonacci extension

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Forecast for AUD/USD on June 2, 2020

AUD/USD

The Australian dollar showed a solid increase of 130 points on Monday, barely reaching the first target level of 0.6825 (October 2016 low). But the aussie is upbeat and ready to continue growth to the next goal along the price channel in the area of 0.6935. The Marlin oscillator in the zone of positive values.

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The signal line of the Marlin oscillator is looking down on the four-hour chart, but a more significant pattern is needed for a reversal sign. Possible consolidation of the price (about a day) under the level of 0.6825, after which we expect continued growth to 0.6935.

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This morning Australia's optimistic balance of payments for the first quarter has already been released: 8.4 billion against the forecast of 6.3 billion and 1.7 billion in the previous period, the investor has to wait for the comments of the Reserve Bank of Australia after its meeting on monetary policy, which will be a little later, at 6:30 London time. GDP for the first quarter will be published tomorrow - the forecast is -0.4%, but there is already hope for a better indicator.

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Forecast for USD/JPY on June 2, 2020

USD/JPY

There was no decisive breakout of the pair up, which we expected yesterday, did not happen. The price remained at the signal level of 107.78. The day's low tested the support of the price channel, the closing of the day took place above the balance indicator line (daily). But the price still does not give up. Today we are waiting for a second attempt to go above the signal level and further growth of the dollar against the yen. Target at 108.30.

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The price currently overcomes the resistance of the MACD indicator line (blue line) on the four-hour chart, the signal line of the Marlin oscillator is in the zone of positive values - in the growth trend zone. Patiently waiting for the price to increase.

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Overview of the GBP/USD pair. June 2. Boris Johnson's ratings are beginning to fall in proportion to the decline of the British

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward.

CCI: 230.3879

The British pound unexpectedly rushed up on the first trading day of the week. It is also unexpected how the European currency rose in price over the past week. At the same time, the reasons for such a strong growth of the British currency are again quite difficult to find. They can be "invented", you can find some kind of coincidence, but now everything is not as obvious as it was in quiet times. In our article on the euro/dollar, we explained why the fact that mass protests and rallies against the police and government in the United States is not the reason for the strengthening of the euro currency. Now the same applies to the pound, which can not show growth at all if we are talking about a fundamentally sound growth.

If what is happening in the United States can now be called a social crisis, chaos, political confusion, and this applies to everything that is happening, and not just the protests related to the murder of a black guy, then in the UK, the regime of ethereal silence continues. Recently, Boris Johnson aired only a few times, who did not say anything important or interesting. The markets, however, Johnson's entourage still learned that in the second half of June, the Prime Minister intends to negotiate a comprehensive agreement with EU leaders personally. However, according to many experts, this step will not lead to any positive results. The UK has also abandoned strict quarantine measures, and health officials are already sounding the alarm. In their opinion, the contagion index (an index showing how many people each carrier of the virus infects; if it is higher than 1, it is considered that the rate of virus spread is increasing) has just fallen below 1, so any relaxation of quarantine measures can lead to a new wave of epidemics. Scientists also report that in recent days in the UK again recorded a large number of cases of infection, about 8,000 per day. John Edmunds, a professor at the London School of Hygiene and Tropical Medicine, believes that the UK government needs to think about how to contain the epidemic, not about its political ratings.

At the same time, a new international conflict is brewing, this time between China and the UK. And also because of Hong Kong. The UK, which has signed an agreement with Beijing under which Hong Kong has a special autonomous status until 2047, is going to simplify the procedure for granting Hong Kong citizens British citizenship. According to the same agreement with Beijing, Hong Kong residents do not have the right to permanent residence in the UK. However, as Beijing and Hong Kong authorities are going to make some laws that strengthen control over the autonomous region by the Chinese authorities and its autonomy may be purely formal, the US, UK, and other countries dissatisfied with what is happening. China itself is also dissatisfied, threatening to respond with countermeasures to all states that will take measures because of the adoption of the law "on national security in Hong Kong". According to Beijing, China has the right to adopt this law and does not violate any international agreements and rights. Hong Kong is a part of China, although it is autonomous. Chinese Foreign Ministry spokesman Zhao Lijian said last week: "If the UK continues to change its current policy, it will violate not only its own position and obligations but also the basic norms of international law. We oppose this and reserve the right to take retaliatory measures. China hopes that the UK will objectively and fairly consider the national security bill in Hong Kong, as well as respect China's position and concerns, and will not interfere in Hong Kong's affairs." Earlier, British Foreign Minister Dominic Raab said that London is ready to provide Hong Kong residents with British passports with the opportunity to live and work in the Kingdom without any restrictions. He also stressed that London will take such a step if Beijing passes the law "on national security", which violates the previous agreement on the special status of Hong Kong.

It is also worth noting that the Brexit negotiations remain at an impasse. Michel Barnier, the chief negotiator for the European Union, accuses London of disrupting the timing of the negotiation process and says that Brussels will not agree to a deal if the UK does not meet the conditions and obligations that were previously agreed. Michel Barnier recalls that about 50% of British exports go to the EU, while the EU exports to Foggy Albion only 7% of the goods produced. This statement was made on the eve of the fourth round of negotiations, which begins today. Naturally, London also blames the opposite side, i.e. Brussels, for the breakdown of the negotiations. Although in general, it does seem that London is not in a hurry to reach agreements, it is not in a hurry to concede and not in a hurry at all. It is difficult to say what Boris Johnson is counting on. A huge number of international economists and experts say in one voice that if London and Brussels part without a "deal", in the first place, it will be a blow to the British economy. And this opinion existed even before the crisis caused by the "coronavirus", which hit the UK the most in Europe. Thus, London risks being left without a free market with the European Union in 2021, and Boris Johnson's political ratings, according to some studies, have begun to decline. If in December last year Johnson won his most striking victory (before that there were only defeats), now we can assume that this victory will remain the only one, because Johnson is more proud of the post of head of state. The fight against the epidemic has failed, there is no trade agreement with the European Union, and there is no agreement with America. Johnson strictly stands by his position of "hard" Brexit, and pay for all the government's decisions will be ordinary Britons, who in 2021 may strongly regret that it was Boris Johnson who won last year. Recent research suggests that the Labor Party is recovering its political ratings after a failure in the parliamentary elections and is already on the heels of Boris Johnson and his party. The activities of their leader, Keir Starmer, are approved by 40% of the population and 17% do not approve. Boris Johnson has a higher number of satisfied voters - 57%, but the number of dissatisfied is much higher - 35%. Other polls also confirm that the overall support rating for the Labor leader is now higher.

And the last factor in the fall of the British currency is the possible negative rates of the Bank of England. We believe that this is an almost inevitable step for the British regulator since the economy simply cannot withstand so many shocks. And if 2020 is still somehow managed to bring to an end, then in 2021, without a trade agreement with the European Union, the British economy will require new large-scale incentives.

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The average volatility of the GBP/USD pair has increased over the past 5 days and is now 141 points. On Tuesday, June 2, thus, we expect movement inside the channel, limited by the levels of 1.2338 and 1.2620. A downward turn of the Heiken Ashi indicator will indicate a downward correction. Fixing the price below the moving average will change the downward trend.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 –1.2512

R2 – 1.2573

R3 – 1.2634

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe continues the upward movement that has strengthened today. Thus, today it is recommended to continue trading the pound/dollar pair for an increase with the goals of 1.2512 and 1.2573 and keep the longs open until the Heiken Ashi indicator turns down. It is recommended to sell the pound/dollar pair when the bears manage to return to the area below the moving average, with the first targets of 1.2268 and 1.2207.

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Overview of the EUR/USD pair. June 2. The social crisis, the US-China conflict, the highest unemployment, and the lifting

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - up.

CCI: 93.4107

A new month begins, and the euro/dollar currency pair continues the same upward movement that was very difficult to imagine a few weeks ago. In recent years, the euro/dollar pair has developed a steady downward trend. In recent years, the euro has been repeatedly corrected, showing a growth of several hundred points or even more. However, perhaps none of these segments and periods caused so much surprise as what is happening on the pair now. Of course, explanations of what is happening can always be found. A huge number of technical, fundamental, macroeconomic, and even political factors can influence the exchange rate of any pair. And even if any central bank suddenly wants to buy several hundred billion dollars on the international currency market, the dollar rate will increase sharply, as demand for it will grow sharply, and there will be no explicable and objective reasons for the growth of this currency. Thus, in the Forex currency market, you can never be 100% sure of something. It is this confidence that usually leads to disastrous consequences.

However, let's return to reality. Recently, the euro currency continues to grow. Analysts and traders expected that on Friday – the last trading day of the week and month – traders will start recording profits on long positions and the correction will begin. However, nothing like this happened. The bulls continued to buy the euro currency as if nothing had happened. And only on Monday, June 1, the pair began some sort of correction. The macroeconomic background on Monday was extremely uninteresting. Business activity indices in the manufacturing sector are important reports in themselves, however, in the current reality, they do not have much significance. Yesterday, it became known that business activity in Germany was 36.6, and in the European Union – 39.4. However, what do these figures say? Only that business activity in the manufacturing sectors of the Eurozone countries continues to be "negative". Any value below 50 indicates that the economy is shrinking. Thus, since the beginning of the "coronavirus" crisis, when business activity in almost all countries of the world collapsed to minimum values, almost nothing has changed. The numbers have started to recover a little, but so far there is no question of any recovery in production and the economy. In many countries of Europe and the world, quarantine restrictions are beginning to be lifted under the friendly warnings of doctors and representatives of the health sector about the second wave of the epidemic. However, almost every developed and developing country now faces a huge dilemma and a difficult choice. Further downsizing of the economy can simply finish it off, bring it to a state where there will be nothing to restore, or it will take years to restore it. If the quarantine is completed, the economy will at least stop shrinking, and if there is no second wave of the epidemic, and scientists will create a vaccine at least by the end of 2020, then everything will be relatively good. The question is, no one knows if there will be a second wave? Many doctors believe that "coronavirus" will be a seasonal disease, that is, it will return in the cold season. This means that it can start hitting people again in the fall. Thus, many governments act at their own risk. And the risk is great.

As for the fundamental background, there are so many topics now that it is even difficult to select a few to fully sanctify them and draw a conclusion about their impact on the mood of traders and the movement of the currency pair. What is happening now in the US is very difficult to describe in words and even more difficult to link it to the currency market. We have repeatedly said that a new standoff with China could cause another blow to the American economy. The highest unemployment rate, as well as the fear of people returning to their usual life and looking for work due to the "coronavirus", continues to slow down the economy. Jerome Powell on Friday said that the Fed did everything it could in the current situation. However, the Fed chief has previously called on Congress and the White House to provide more assistance to the economy. Thus, the current volume of incentives is not enough. And at the same time, protests, riots, and outright lawlessness begin in the United States. All because a black guy was killed by a white cop. At the same time, the details covered in the media differ so much that it is very difficult to draw any unambiguous conclusion. Rallies, marches, protests, pogroms, skirmishes with the police, all this happens because of one murder and a racist scandal blown out of the blue. We do not support any of the parties to this conflict in any way. However, every day in America, as well as around the world, a huge number of people die, from all sorts of causes, most of which are not "natural". If every death causes the entire country to "rear up", then... However, investors and traders understand that instead of people returning to work in a country where many states have also relaxed quarantine measures, people are rioting, striking, rallying, and protesting. This means that the economy continues to fall, not recover. And it seems that all the events combined now are the reasons why the dollar is declining. However, it should be noted that, for example, the pound is growing extremely reluctantly. You can say that the pound itself is under strong market pressure because of Brexit, the failed negotiations between London and Brussels, the complete uncertainty about the future of the country and its economy. Good! The Japanese yen is also not particularly expensive when paired with the dollar. To be more precise, it has been getting cheaper in recent weeks. It turns out that the social crisis in the United States is not the reason for the fall of the dollar against the euro. Or, at least, this reason for the decline in the US currency looks very doubtful. By and large, the world, markets, and participants in these markets continue to be agitated because of everything that has happened in recent months. Thus, perhaps, in the euro/dollar, we are now just witnessing the second wave of panic, since it is quite difficult to find unequivocal reasons for the growth of the euro currency by 250 points in 5 days. If so, then traders may begin to get rid of the euro currency in the near future, realizing that it has risen in price unreasonably.

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The average volatility of the euro/dollar currency pair as of June 2 is 85 points. Thus, the value of the indicator is still characterized as "average". Today, we expect the pair to move between the levels of 1.1045 and 1.1215. The reversal of the Heiken Ashi indicator downwards signals a downward correction after strong growth.

Nearest support levels:

S1 – 1.1108

S2 – 1.1047

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1169

R2 – 1.1230

R3 – 1.1292

Trading recommendations:

The EUR/USD pair continues its strong upward movement. Thus, after overcoming the psychological level of 1.1000, buy orders became relevant, now with the goals of 1.1169 and 1.1215, 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 goals of 1.0986 and 1.0925.

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Hot forecast and trading signals for the GBP/USD pair on June 2. COT report. EU is not going to give London any "special

GBP/USD 1H

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The pound/dollar unexpectedly continued its upward movement on Monday, which also increased. Buyers managed to overcome the resistance area of 1.2403-1.2423, as well as the first resistance level for this week at 1.2434. Therefore, the path to growth is now clear until the next resistance level of 1.2529, to which, however, there isn't much, only 30 points. If the bulls do not pause near this target, then it will be possible to trade for an increase with the target of 1.2664. Although, from our point of view, all this sharp rise in the pound's price raises questions and doubts about its validity. Of course, the pound cannot constantly get cheaper, and the situation in America is also discouraging and dangerous, there are also enough uncertainties, however, the British currency's growth has begun too sharply. In any case, while the technical data speaks in favor of continuing the upward movement, the trend line confidently supports the traders to increase.

GBP/USD 15M

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Both linear regression channels continue to be directed upward on the 15-minute timeframe, therefore, there are no signs of ending the upward trend here, just as there are no signs of the beginning of the correctional movement.

COT Report

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Despite the fact that, in total, among all major market participants, the demand for the pound sterling did not change during the reporting week (a total of 8600 contracts for buying and selling were opened), professional traders mostly bought the pound sterling - +5205 contracts, and on the contrary, they got rid of the contracts for selling at -1,686 transactions. Thus, the mood of traders remains upward, and at the end of last week the situation, in principle, has not changed. But in order for the upward movement to continue, it is necessary that large traders continue to invest in the British currency, and for this we need reasons and reasons, which, in the pound's case, are now quite difficult to find. Nevertheless, the GBP/USD pair continues to grow at the beginning of the new week, which means that the demand for the pound does not decrease.

The fundamental background for the British pound remains negative in spite of the fact that this currency continues to go up together with the dollar. On the first trading day of the week, the report on business activity in the UK manufacturing sector, which was 40.7 with a forecast of 40.6, is not particularly important at this time. No important publication in the United Kingdom and the United States for today. On Monday, a new, fourth round of negotiations between Brussels and London began on an agreement that could take effect on January 1, 2021 and would determine the relationship between the UK and the EU. However, yesterday it became known that the chances of making any progress during this round are as small as in previous times. The European Union published a document stating that David Frost and Britain as a whole may not expect to receive any privileges from the EU that were given to other partners of the bloc. The EU believes that each agreement is "unique" and should be discussed until both parties are satisfied. In the case of Great Britain, which is forcing events and even during the time of the global pandemic and global crisis, does not want to postpone the "transition period", which could give additional time for negotiations, this will not work. Thus, the chances of a deal continue to fall, and the chances that the British economy will be even harder next year are growing.

There are two main scenarios as of June 2:

1) The initiative for the pound/dollar pair remains in the hands of the bulls and, since several important resistance has been overcome, traders are advised to stay in purchases with targets at resistance levels of 1.2529 and 1.2664. The movement was very strong on Monday, therefore, the correction can be strong and begin abruptly and unexpectedly. Take Profit will be about 30 points in the first case and 160 in the second.

2) Sellers continue to remain in the shadow and will be ready to return to the market only below the ascending trend line. Of course, short positions can be considered before, but now there are no prerequisites for this at all. 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 while aiming for the Kijun-sen line (1.2344) and the trend line (1.2300). In this case, Take Profit will be from 55 to 115 points.

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EUR/USD 1H

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The EUR/USD pair calmed down on Monday, but did not start a downward correction on the hourly timeframe. The March 27 high has been worked out, but again the buyers failed to overcome it. The fact that there is still no downward correction at this time, although on Mondays the pair is often corrected against the trend, and on Fridays, indicates the strength of the bulls at this time. Thus, most likely, today will be the third attempt to overcome the 1.1147 level. The pair also continues to trade inside the ascending channel, as well as above two ascending trend lines at once, one of which is long-term and has more than once provided support for traders to increase. Thus, now all technical factors speak in favor of continued growth of the European currency.

EUR/USD 15M

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We see the same picture on the 15-minute timeframe. Two linear regression channels, both upward, clearly signal an upward trend on the chart. Thus, at the moment we do not have a single signal on when the upward trend would end.

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 and is "not entirely in favor of the euro." To be more precise, it was not in anyone's favor. However, large traders found reasons to open new 7524 purchase contracts. Only 3817 sales contracts were opened for the reporting week, if we take into account the most important group of traders - "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 how the mood of large traders for the reporting week has changed. It can be said that the beginning of a new week also remains with buyers.

The overall fundamental background for the pair remains neutral despite the fact that the euro continues to grow steadily, and it might seem that it now has fundamental support. However, important reports were not published on the first trading day of the week. And those reports that were at the disposal of traders from the US and the EU showed minimal discrepancy with the forecast values, and indeed they cannot now be considered important and significant. Indices of business activity in the manufacturing sectors of the EU countries, the European Union as a whole and the United States remain at fairly low levels, although they are beginning to recover slowly. However, much more important events are happening now in the international arena. Traders are still waiting for the end of the next conflict between China and the United States, which is now based not on trade claims and the "injustice of one of the participants", but not on the issue of the coronavirus pandemic, the Hong Kong issue, and they can also participate in this conflict. other countries that also believe that China should pay for the distribution of the COVID-2019 virus and does not have the right to pass the Hong Kong National Security Act.

Based on the foregoing, we have two trading ideas for June 2:

1) It is possible for quotes to grow further with the goal of the resistance level for the 4-hour chart at 1.1205. However, the bulls need to exert their strength and still overcome the 1.1147 level for this, from which quotes have already rebounded twice. In this case, the upward trend, which all indicators are now witnessing, will continue. Potential Take Profit in this case will be about 55 points.

2) The second option - bearish - involves consolidating the EUR/USD pair under the rising channel, which will allow sellers to join the game and start trading lower with targets at 1.1045 (Kijun-sen) - 1.0975 (upward trend line ) - 1.0931 (support level) - 1.0891 (Senkou Span B line). Overcoming each of the obstacles will allow you to keep short positions open. Potential Take Profit range from 45 to 200 points.

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