4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 165.8031

For the euro/dollar currency pair, the second trading day of the week was again in an upward movement. The pair's quotes are fixed above the moving average line, so the bears have shown their weakness at this time, and the US dollar is not ready for further growth. We are a little surprised by this development, as we did not expect a new growth of the European currency. However, in almost every article, we draw the attention of traders to the fact that technical factors are primarily important now, since the markets are not in a state of panic, however, there is not too much logic in trading now. Thus, the best option is to follow the trend, and you need to pay attention to the fundamental and macroeconomic factors, but only after evaluating the technical picture. Today, the euro has again started to rise in price, and it is unclear whether these macroeconomic statistics for once caused the reaction of traders, or whether market participants were ready to sell the US currency again without data on business activity in the European Union. Complex issue. Analyzing the latest COT reports on the euro and pound, we came to the unequivocal conclusion that in the last two or three weeks, the demand for these currencies did not grow much. That is, traders did not buy the two currencies at breakneck speed, however, they showed significant growth. Thus, as before, we can conclude that the reasons should be sought in the United States. Most likely, the US currency is subject to market pressure, which leads to the growth of its competitors. Indirectly, this theory is confirmed by almost identical movements of the euro/dollar and pound/dollar pairs in recent weeks. As for today, quite unexpectedly, macroeconomic statistics turned out to be very important. Recall that in Germany, France, and the European Union, business activity indices for June (preliminary data) will be released today, which showed a significant increase in this very activity. In France, all three indices went above 50.0 in this way, both in production and in services. Thus, there was a revival and growth. In Germany, the picture is slightly worse. In the manufacturing sector, the index was 44.6, in the service sector – 45.8, and the composite – 45.8. All three indices are significantly higher than the forecast values. Thus, in Germany, there is no recovery in these industries. We are only talking about slowing down the decline, however, the figures themselves are very encouraging. The picture in the European Union is no less optimistic. Business activity in the manufacturing sector increased to 47.5, and in the service sector – to 47.3. All three indices were significantly higher than forecasts here. Thus, in general, market participants could start new purchases of the European currency based on this information. Business activity in the United States also turned out to be significantly higher than forecasts, and the index for the manufacturing sector was almost 50-49.6.

While traders rejoiced at the strong data on business activity, top US officials continue to entertain and mislead market participants. In other words, it is impossible to describe what happened that night. In a live broadcast on FOX News (a channel that supports Donald Trump), the US president's chief trade adviser said that "the deal with China is terminated". And no matter what anyone says, we will never believe that such a high-ranking official just "blurted" the wrong thing on live TV. Just a few hours later, Donald Trump himself announced via his favorite Twitter that the deal with Beijing remains in force. "The trade deal with China has not changed. I hope they will continue to comply with the terms of the agreement," Trump wrote. Interestingly, Peter Navarro explained his statement by saying that US intelligence was convinced that the "coronavirus" was developed in a Chinese laboratory and it was from this laboratory that it broke free. A little later, Navarro himself said that he did not mean the termination of the deal, however, the lack of trust in the Chinese authorities. Donald Trump himself did not comment on Navarro's words at all and did not explain what his adviser meant. The official position of Beijing and Washington is that both sides continue and want to continue the trade agreement. However, a few weeks ago, the media "slipped" information that Beijing recommended that Chinese companies stop or reduce the purchase of American agricultural products, which was supposed to increase according to the agreement and buy 30-40 billion dollars annually. In general, the situation is beginning to be unstable again.

Analysts and experts reacted ambiguously to such "funny stories" from American officials. More and more experts believe that the trade deal is on the verge of collapse and if it is terminated (there are rumors that the document contains the so-called "force majeure" clause, according to which Beijing can withdraw from the agreement), it will first of all hit Donald Trump personally, who will lose his last trump card before the upcoming presidential elections. In principle, this topic (the presidential election and the confrontation with China) is now the most important and significant for the US dollar, the United States, and Trump personally. We believe that China will make sure that it is Joe Biden who becomes the new US President. It is not known what methods are used. However, for sure, Beijing can support Biden. One way or another, it is unlikely that Beijing will support Trump, thanks to whom the countries were 18 months in a state of a trade war, and now most of the duties remain in effect. Thus, the next 4 months may be extremely important for all participants in this saga. It is possible that the US dollar again began to experience problems precisely because of the high probability of termination of the deal and the political crisis that the country is now in. Plus, do not forget that the "coronavirus" in the United States continues to spread as if nothing had happened, although officials continue to deny the existence of a "second wave". There is no second wave in the US since the country has not yet coped with the first one. Did you notice how abruptly and quickly Anthony Fauci, the country's chief epidemiologist, who constantly refuted Donald Trump's statements, disappeared from the air?

The average volatility of the euro/dollar currency pair as of June 24 is 92 points. Thus, the value of the indicator is still characterized as "high", but in general, volatility continues to decrease. We expect the pair to move today between the levels of 1.1221 and 1.1405. The reversal of the Heiken Ashi indicator downwards signals a new round of downward movement, however, the trend has already changed to an upward one.

Nearest support levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading recommendations:

The euro/dollar pair is fixed above the moving average. Thus, at this time, it is recommended to trade for an increase with the goals of 1.1353, 1.1405, and 1.1475, before the Heiken Ashi indicator turns down. It is recommended to return to selling the pair not before fixing the price below the moving average with the first goal of 1.1108.