EUR/USD: technical analysis on June 30, 2023. Eurozone inflation disappoints

Hello, dear traders! EUR/USD reversed to the downside and resumed its bear movement on Thursday. No sell signal was generated near the 23.6% retracement level of 1.0923. It is quite possible that the pair would have continued its upward movement yesterday, but the US GDP report for the first quarter halted the bull run and brought the bears back into the market. Thus, a new bearish wave has begun. The low of the last bearish wave is at 1.0882, and the pair's consolidation below this level confirms the bear trend. Now the price has broken the lows of the last two bearish waves, confirming the likelihood of a downtrend continuation. So far, there are no reasons to expect a new bullish wave.

Yesterday, quotes were driven by US GDP and jobless claims data. Both reports came stronger than expected, boosting the dollar. Today, an inflation report for June was delivered in the eurozone. Traders had serious concerns about it because of an increase in Germany's inflation yesterday. Nevertheless, consumer prices slowed down to 5.5%, above the market forecast of 5.6%. The core CPI rose to 5.4% in June, matching traders' expectations. On the 1-hour chart, the bear wave is far from being completed, but there are emerging signs on the 4-hour chart.

On the 4-hour chart, the pair reversed to the downside and consolidated below the 38.2% retracement level of 1.0877. Thus, quotes may continue declining to the 50.0% Fibonacci level of 1.0811. Today, a bullish MACD divergence has emerged but it has not fully formed yet. A brief bullish correction may occur in the near future, which will become an upward wave within the bearish trend on the hourly chart. However, there are no buy signals at the moment.

Commitments of Traders:

In the reporting week, speculators opened 3,261 long positions and 10,434 short ones. Sentiment remains bullish but is gradually weakening. The total number of long positions held by speculators now stands at 229,000, while there are only 85,000 short positions. Bullish sentiment is still strong, but the situation may change in the near future. The euro has been mostly bearish in the past two months. A large number of long positions suggests that buyers may start closing their positions soon (or may have already started, as seen from the recent COT reports. Now there is a wide gap between positions, which allows us to assume the possibility of a further decline in the euro in the near term.

Macroeconomic calendar:

Eurozone: CPI.

US: Core PCE Price Index; Personal Spending; Michigan Consumer Sentiment.

On June 30, the macroeconomic calendar contains several reports, with eurozone inflation, which has already been released, being the most important of them all. The fundamental backdrop may have little influence on trader sentiment in the second half of the day.

Outlook for EUR/USD and tips for traders:

We can sell after consolidation below 1.0868 on the 1-hour chart, with targets at 1.0824 and 1.0780. We can hold short positions until a buy signal is generated (bounces, divergences). It is now a bad idea to buy due to the downtrend. We need at least one bullish wave that would stop the downtrend.