EUR/USD 1H
The EUR/USD pair continued to move upward on the hourly timeframe during Friday, andthe resistance level of 1.1111 and the March 27 high at 1.1147 worked at the end of the day. More precisely, until the last two points were not reached, but it can also be considered a test. The euro/dollar started a downward correction after these events, which was very expected for the last trading day of the week and month. However, the bulls hold the pair tightly in their hands, even too tightly. The correction turned out to be very weak and upward movement may resume today. At least this is what the pair's presence inside the ascending channel with several points of support indicates. Thus, the upward trend is unambiguously maintained. By the way, two ascending trend lines also signal this.
EUR/USD 15M
We see the same picture on the 15-minute timeframe. Two ascending channels of linear regression, which clearly indicate the current upward trend and on the lowest chart. Thus, at the moment we do not have a single signal about the end of the trend. Even the correction happened inside both channels and can already be completed.
COT Report
The latest COT report showed that professional traders unexpectedly bought European currency during the reporting week. "Suddenly" - because, from our point of view, the fundamental background was not entirely in favor of the euro. It was not in anyone's favor. However, over the past week, we drew the attention of traders to the fact that sometimes the euro grows without having the necessary grounds for this. Large traders are present in the market and usually they are the ones who move one or another pair. And they do not always perform trade operations, based on a fundamental or macroeconomic background. Large traders found reasons to open new 7524 purchase contracts. There were only 3817 sales contracts for the reporting week. Actually, this is already enough to understand how the mood of large traders for the reporting week has changed. The end of the week ended on the side of the buyers, so the euro's demand may continue to grow among major players.
The overall fundamental background for the pair remains neutral. Several not so significant macroeconomic reports were released in the current conditions in the eurozone and the US on Friday, which, as you might guess, failed. The European Union published inflation for May in a preliminary estimate and amounted to 0.1% in annual terms. Recall that the normal value for inflation is more than 1.5% y/y, and the target is 2.0% y/y. Reports on changes in personal income and expenses of the US population were issued. The first indicator unexpectedly increased by 10.5% in April, and the second - decreased by 13.6%. Michigan consumer confidence index turned out to be worse than forecasted and amounted to only 72.3 in May. Thus, these statistics were not supposed to support any currency, however, market participants found reasons for new purchases of the euro, and we believe that this is exactly the case when large players led the market.
Based on the foregoing, we have two trading ideas for June 1:
1) It is possible for quotes to grow further with the goal of the resistance level for the 4-hour chart at 1.1214. However, since traders still could not overcome the March 27 high last Friday, there are still little chances of moving down and ending the upward trend. Therefore, we recommend that you wait until this level is overcome and only after that open new purchase orders. Potential Take Profit in this case will be about 60 points.
2) The second option - bearish - involves consolidating the EUR/USD pair under the upward channel, which will allow sellers to turn on and start trading lower with targets at 1,1016 (Kijun-sen) - 1,0960 (upward trend line) - 1.0891 (Senkou Span B) - 1.0835 (ascending trend line). Overcoming each of the obstacles will allow you to keep short positions open. Potential Take Profit range from 45 to 200 points.