The EUR/USD pair was traded in different directions on the hourly timeframe on June 29, while perfectly working out the key lines and levels. The Senkou Span B and Kijun-sen lines were worked out, from which a rebound followed with the resumption of the downward movement. Thus, the bears dominate the market after formally overcoming the ascending trend line, but at the same time they clearly do not have enough strength for new sales of the pair. Perhaps they will be given an impetus by a rebound from the Senkou Span B line and overcoming the support area of 1.1227-1.1242. In general, the pair has made two important rebounds over the past few days, from the resistance area of 1.1327-1.1342 and the Senkou Span B line. Thus, buyers continue to stay out of the market and can not even play against weak bears on equal terms at this time.
Both linear regression channels turned up on the 15-minute timeframe, signaling an upward trend in the short term. But traders managed to gain a foothold below the moving average line and fall to the lower lines of both channels by the end of Monday, so it is possible to resume the downward movement.
The new COT report, which was released last Friday, as we expected, showed no major changes. The pair has been trading in different directions for the last ten days, and there is no pronounced trend. The trend seems to be downward, but sellers do not have a clear advantage. The most interesting group of professional traders for us, which includes various organizations that enter the foreign exchange market in order to make a profit, only opened 3,000 transactions for the purchase and 2,000 transactions for the sale in the reporting week, which is very small. A group of hedgers were more active, but it did not drive the market. The total number of transactions increased by almost 20,000, short positions had an advantage. However, in general, we can call this report boring and uninformative. The mood of major players remained virtually unchanged over the reporting week. Recent trading days that are not included in the latest COT report do not add any clarity, since the pair continues to trade in different directions.
The general fundamental background for the EUR/USD pair was practically absent on Monday. We do not even analyze the report on inflation in Germany, which, from our point of view, did not matter to traders. In recent months, market participants with pleasure and ease have ignored much more significant data, continuing to trade the pair for their own reasons, which often do not coincide with the fundamental background. Moreover, more and more attention has recently been paid to the epidemic rather than to economic factors. Experts seriously fear that the whole world will be overwhelmed by a new wave of pandemics, which will have to introduce a new total quarantine. And even if the quarantine is not as strict as the first one, there will still be certain restrictions that will at best slow down the recovery of the economy, and at worst contribute to its new decline. First of all, this now concerns the United States, where the lockdown did not bring any results. Isolated by someone or something, Anthony Fauci finally went on the air, saying only that the current numbers of infected people in the United States are frightening. However, few people listened to Fauci when the virus was just beginning to take over America. Now, it is unlikely that the White House will go to a new total quarantine because of fears that China will take away the world's leadership and strengthen its influence on other countries, while the United States is mired in a crisis and epidemic. Well, don't forget about the presidential election. A new lockdown, a new fall in the economy can finish off Donald Trump's chances of re-election.
Based on the foregoing, we have two trading ideas for June 30:
1) The bears seemed to have overcome the upward trend line, but failed to extract anything for themselves from this signal. Thus, sales orders with the support levels of 1.1141 and 1.1065 remain relevant until the quotes remain below two key lines, Senkou Span B and Kijun-sen. However, it is worth remembering that now there is a high probability of a flat. Potential Take Profit range from 80 to 150 points.
2) Buyers can still return to the market, but have too many barriers to form new upward trend. Therefore, we advise you to wait until the 1.1327-1.1342 area has been overcome before buying the EUR/USD pair with a target at the resistance level of 1.1425. Potential Take Profit in this case is about 75 points.