On Monday the 6th of July, trading on the euro closed up. The EURUSD pair rose by 0.58% to 1.1309. During the US session, the rate reached 1.1345. Markets were focused on the improved economic data from the US and China, as well as the rise in stock indices and decline on the dollar.
The major US stock indices rose by between 1.4% and 2.3%, with European indices rising by between 1.5% and 1.8%. The major stock index in Shanghai posted a rise of 5.7% to reach a 5-year high. The indices were given boosts by the reported increase in business activity in the US and China, which increased investor optimism and calmed fears over the surge in new coronavirus cases in the US.
Day’s news (GMT+3):
The EURUSD pair’s rise came to an end at around the 112th degree. From the high of 1.1345, the correction amounted to 48 pips. There’s a support zone between 1.1285 (LB) and 1.1291 (45th degree).
The intraday low was 1.1297 (38% of the growth from 1.1219 to 1.1345). According to our projections, this growth phase should last until the 9th of 10th of June. The time is ripe for a fresh high. Moreover, the candlestick formations on the 3-month and 6-month timeframes indicate a strengthening euro until the end of the year. In other words, things are looking good for the bulls. Whether or not they’ll take advantage of the current situation will depend on news on the spread COVID-19 and the development of a vaccine.
In our forecast, we’ve accounted for a potential bounce from 1.1280 - 1.1287. Considering that investors are ignoring the pandemic, and that the number of new cases in the US is rising rapidly, the downwards correction on the euro might be quite deep. There are two levels from which it’s worth considering a long position: 1.1283 and 1.1265. You could even divide your lot into two parts. Put 30% of your deposit down at 1.1282 and 70% at 1.1265. The pair is currently trading at 1.1293. Keep an eye out for the rebound from the lower line of the local downwards channel and the balance line.