FX.co ★ Forecast and trading signals for EUR/USD on June 1. Analysis of the previous review and the pair's trajectory on Tuesday

EUR/USD 5M

The EUR/USD pair showed absolutely low volatility during the first trading day of the week. If not for the 25-point move in the afternoon, the overall volatility would have been 25 points. However, in the second half of the day, market participants still found the strength to move the pair from the dead end. However, this movement did not affect the technical picture in any way. The euro/dollar pair has been in a very limited range for more than a week, but it does not look like a flat. There is no clear side channel, no clear borders. Therefore, trading the pair is now highly complicated by low volatility and absolute randomness of movements. On Monday, the calendar of macroeconomic events was completely empty in both the European Union and the United States. And so traders had to make decisions solely based on technical signals. Of which there were very few during the day. Moreover, most of them were false due to the morning flat. In principle, the first three signals out of the total four can be combined into one. The price bounced off the critical line three times and could not go down by at least 15 points thrice, so that you can put a Stop Loss at breakeven. However, we warned that an outright flat was possible, and by the beginning of the US trading session, it was absolutely clear what traders were dealing with on Monday. Therefore, the short position should be manually closed at zero profit. Or in the least profit, since chances that the quote will go down to the nearest level - the extreme of 1.2160, were illusory. The last, fourth signal - to buy- was formed in the US session. At the same time, it formed again after some time, until the moment when the pair continued to stay in the morning flat. Therefore, it was no longer necessary to open a long position, despite the fact that the pair still managed to pass 25 points up.

Overview of the EUR/USD pair. June 1. The speeches of Christine Lagarde, Jerome Powell, and the Nonfarm report are things to look out for this week

Overview of the GBP/USD pair. June 1. The conflict in Northern Ireland may break out with a new force in October 2021

EUR/USD 1H

Nothing changed on the hourly timeframe on Monday. The pair still remained in a very limited range, but at the same time, it is clear that the current movement is not flat on the hourly timeframe. The fact is that last week, the quotes surpassed the rising trend line and it did not play any role. The euro is rising again at this time. We warned that despite surpassing the trend line, the upward trend still persists. Therefore, it is necessary to trade in the coming days based on an understanding of the current disposition. We still recommend trading from the important levels and lines that are marked on the hourly timeframe on Tuesday. The nearest important levels at this time are 1.2160, 1.2243 and 1.2267, as well as the Senkou Span B (1.2147) and Kijun-sen (1.2198) lines. The lines of the Ichimoku indicator can move throughout the day, which should be taken into account when searching for trading signals. Signals can be rebounds or breakthroughs of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price moves 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. On Tuesday, the European Union is scheduled to publish the index of business activity in the manufacturing sector, as well as the level of inflation and unemployment in May and April, respectively. We believe that the report on the consumer price index can theoretically trigger a reaction from traders. Most likely, only if the actual value significantly differs from the forecast, which is 1.9%. In the United States, the index of business activity in the manufacturing sector will also be published. There are also low chances that it will be worked out.

We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.

COT report

The EUR/USD pair rose by 60 points during the last reporting week (May 18-24). The new Commitment of Traders (COT) reports, which was released yesterday, showed that professional traders continue to increase their buying positions in the European currency. This time, they opened 3,800 new Buy contracts (longs) and closed 1,400 Sell contracts (shorts). Thus, the net position for this group of traders increased by 5,200. Not much, but also not a little. And so, the bullish mood of market participants becomes stronger again, which increases the euro's prospects for succeeding growth in 2021. The green and red lines (net positions of commercial and non-commercial traders) of the first indicator continue to move away from each other, which indicates the strengthening of the current trend (in our case, the upward trend). Therefore, at this time, the COT report clearly signals a more preferable continuation of the euro's growth. In general, professional traders have opened 240 thousand contracts for buying and 133 thousand for selling. And so there is almost twice a difference. But we continue to believe that the main factor is not the actions of professional players, but the actions of the Federal Reserve and the US Congress. The chart above clearly shows that at a certain point, the first indicator began to signal the end of the upward trend, that is, large players began to reduce longs and move to shorts. However, this did not lead to a reversal of the global trend downwards, which indicates other, more significant factors affecting the exchange rate of the European currency.

Explanations for the chart:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the non-commercial group.