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Forecast for EUR/USD on July 6 (COT report). Christine Lagarde points out the fragility of the economic recovery



The EUR/ SD pair continued a very weak growth process in the direction of the downward trend line during Monday, and it managed to reach it this morning. However, it should be noted that to a greater extent the trend line itself came to the price, and not vice versa. Fixing the pair's rate above the trend line will work in favor of continuing the growth of quotes in the direction of the corrective level of 61.8% (1.1919). The rebound of quotes from the trend line will keep the mood of traders "bearish". There is almost nothing to say about the background information on Monday. The index of business activity in the services sector was released in the European Union, as well as a speech by ECB President Christine Lagarde. It seems to be a fairly important report and a fairly important speech. But in reality, the US markets were closed yesterday, so in any case, the activity of traders left much to be desired.

The index of business activity in the services sector was slightly different from the expectations of traders. Moreover, Christine Lagarde noted in her speech that the Eurozone economy is only at the very beginning of the recovery path after the epidemic and this process is still very fragile and unstable. The head of the ECB also said that the PEPP program (emergency asset purchase program) will be in effect at least until the end of March 2022, as originally planned. However, it can be extended for any period until the ECB decides that the crisis has been completely overcome. However, not all ECB members support further stimulation of the European economy. Jens Weidmann and Robert Holzmann believe that the European economy is already recovering on its own and no longer needs incentives. However, some are categorically opposed to the end of the PEPP program, as they believe that the crisis has not yet been overcome, and it will take at least several more months to vaccinate the entire EU population.



On the 4-hour chart, the pair's quotes performed a consolidation under the corrective level of 61.8% (1.1890). Thus, the pair's decline can be continued in the direction of the next Fibo level of 76.4% (1.1782). However, the bullish divergence of the MACD indicator allows us to count on some growth in quotes. Thus, closing above the Fibo level of 61.8% will allow traders to expect growth in the direction of the corrective level of 50.0% (1.1978).

EUR/USD – Daily.


On the daily chart, the quotes of the EUR/USD pair performed a reversal in favor of the US currency and consolidated under the corrective level of 161.8% (1.2027). Thus, the fall of quotes can be continued in the direction of the Fibo level of 127.2% (1.1729).

EUR/USD – Weekly.


On the weekly chart, the EUR/USD pair performed a consolidation over the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.

Overview of fundamentals:

On July 5, there were few news and events in the European Union, and there were none at all in the United States. The information background was quite weak on Monday, which was reflected in the chart of the pair's movement.

News calendar for the United States and the European Union:

EU - change in retail trade volume (09:00 UTC).

US - ISM Index of business activity in the service sector (14:00 UTC).

On July 6, there will again be very few important events and reports in America and the European Union. Thus, today the information background will also be weak.

COT (Commitments of Traders) report:


The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders became more "bearish". Major players have closed 563 long contracts and opened 3,615 short contracts. Thus, the changes shown in the latest report are not too big. However, the mood of speculators has been becoming more "bearish" for several weeks in a row. However, in general, the advantage of bull traders remains, since they have a large number of open longs.

EUR/USD forecast and recommendations for traders:

I do not recommend selling the pair today, since in recent days the decline in quotes was too strained or absent at all. No matter how the pair tries to perform a reversal in favor of the EU currency. I recommend buying the pair if the quotes on the hourly chart close above the descending trend line with a target of 1.1919.


"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" are small traders who do not have a significant impact on the price.

The material has been provided by InstaForex Company -