07.06.202103:35 Forex-elemzések és áttekintések: Overview of the EUR/USD pair. June 7. The ECB and the Fed will begin to wind down their stimulus programs no earlier than 2022.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -54.5590

On Friday, June 4, the EUR/USD currency pair quickly began a new round of upward movement. And although this does not yet affect the formally formed downward trend (the price is fixed below the moving average line), the pair continues to trade where it spent the last few weeks. Only 100 points below the local highs, which are located only 70 points below the 3-year highs. Thus, we believe that the volatile trading at the end of last week did not affect the current technical picture in any way. All that happened was that the dollar rose by 90 points after the publication of a very strong report from ADP on the number of employees in the private sector. However, on Friday, the dollar lost about the same amount due to the Nonfarm Payrolls report, which turned out to be worse than expected. Thus, despite the consolidation of the price below the moving average, the upward trend continues. In principle, this is perfectly visible on any illustration of the 4-hour timeframe.

Moreover, the dollar's rise last Thursday looks somewhat like an accident in the current circumstances. Let's explain what we mean. The fact that the statistics in the US are much better than in the EU does not even cause anyone to doubt. It can be seen at least from the GDP figures, which are now three times higher in the United States. Accordingly, the rest of the macroeconomic indicators are mostly better than in the EU. And what dividends did the dollar get from this? Strengthening by 90 points? The upward trend is still being maintained. The global factors that drove the US currency so low remain relevant. And traders used to ignore statistics. However, at the end of last week, they made an exception to the rules and worked out several reports at once. Thus, it turned out that the US currency seems to have quite logically risen in price. And then what? Then everything will continue in the same direction as in recent months and even a year. We still believe that the US currency will become cheaper. It doesn't matter what statistics come from overseas.

In principle, there are no global topics that you can look back on every day. All the talk in the foreign exchange market boils down to when central banks will begin to scale back their quantitative easing programs and raise rates. There are still rumors that rising inflation in the United States will force the Fed and Jerome Powell to cut off the QE program. It may happen, but will it provide strong support for the US currency? From our point of view, no. The problem is that the EU and the US have different attitudes to stimulating their economies with money. If the EU is forced to think about common debts, and the richer and more affluent countries do not want to take on the extra debts of countries that do not know how to save and live within their means, then there are no such problems in the United States. The dollar is the number one currency globally, so dollars can be printed in trillions indeed, without worrying that they will cause hyperinflation. The US currency is quietly scattered around the world because the demand for it is everywhere. Most of the gold and foreign exchange reserves of almost all banks in the world consist of dollars. The demand for the US currency is even at the level of the central banks of other countries because there are few currencies in the world that can be called stable. What can we say about commercial banks or ordinary citizens of almost any country? Does anyone know a person who keeps their savings in Chinese yuan? But China's economy is among the top three world leaders, and the yuan itself is also a fairly stable currency. But no one needs the yuan when there is a dollar. That's why they don't worry about anything in the States. Economists wonder if the dollar has a future as the world's reserve currency. China or Russia have long threatened to reduce demand for the dollar in favor of their national currencies. Still, the dollar remains the number one currency. Therefore, the EU's economic stimulus program is much smaller than in the US. And it should be completed in March 2022.

Hardly anyone seriously believes that the United States will begin to wind down its stimulus program before the beginning of 2022. Jerome Powell has said many times (as have other monetary committee members) that the economy is recovering unevenly. The labor market is still struggling and is well below pre-crisis levels. And inflation is a problem, but something needs to be sacrificed for the sake of economic recovery. Thus, it is likely that the ECB and the Fed will begin to wind down their programs simultaneously, give or take a few months. Thus, the mere fact of curtailing QE programs is unlikely to support the dollar. However, when this happens, it will mean that the US economy will no longer receive a much larger cash injection than the EU economy. The gap in the EU volume and the US money supply will cease to increase, which can play into the hands of the US currency. This factor is unlikely to be enough for the dollar to show long-term growth. But this factor may be enough for the dollar to stop getting cheaper. However, in any case, nothing like this is expected in the coming months, which means that the euro can continue to aim for updating its 3-year highs.

The volatility of the euro/dollar currency pair as of June 7 is 68 points and is characterized as "average." Thus, we expect the pair to move today between the levels of 1.2098 and 1.2234. A reversal of the Heiken Ashi indicator back down signals a possible round of downward movement.

Nearest support levels:

S1 – 1.2146

S2 – 1.2085

S3 – 1.2024

Nearest resistance levels:

R1 – 1.2207

R2 – 1.2268

R3 – 1.2329

Trading recommendations:

The EUR/USD pair has already started a new round of upward movement. Thus, today it is recommended to open new short positions with targets of 1.2098 and 1.2085 if the Heiken Ashi indicator turns down. It is recommended to consider buy orders not earlier than fixing the price above the moving average line with the targets of 1.2234 and 1.2268.