21.06.202206:44 Forex-elemzések és áttekintések: Overview of the EUR/USD pair. June 21. We understand the mood of the foreign exchange market.

The EUR/USD currency pair did not show any supernatural movements during Monday. However, the pair can't trade super-volatile every week. Last week turned out to be very active thanks to the Fed meeting and the fact that the market began to work out its results a few days before they were announced. As a result, the volatility in the last 7-8 trading days was very high, which is seen in the illustration below. For the European currency, the average volatility of more than 100 points is considered very high. Therefore, we expect that the market will calm down now, and volatility will fall.

However, this does not mean anything for the European currency. It is now very difficult for it to find market support or news. Even last week, the Fed raised the rate, but the dollar did not rise this time, as it managed to rise earlier, immediately after the ECB meeting and the report on American inflation. Therefore, we can say that the euro currency was lucky this time. But at the same time, the European currency itself did not show any growth. In general, this is correct, because when the Fed raises the rate by a record value and brings it to a record value over the past 20 years, this is an excuse to buy the US currency, and not vice versa. Therefore, at the moment, the euro/dollar pair is trading close to the moving average line, preserving the chances of both a resumption of the global downward trend and an upward correction. We believe that we will see another round of corrective movement this week, but the prospects for the euro are still vague. By and large, only the correction of the euro can count on now.

The market will show its true face this week.

Let's be honest. When the most important information comes to the market, it is almost impossible to determine the true mood of traders. For example, we have a downward trend and then the Fed decides for no reason to lower the key rate and the dollar begins to fall, and the euro/dollar pair, respectively, grows. Can this event be considered a change in the mood to "bullish"? From our point of view, no. Because it's just one event. It is important, but it is unable to turn the market 180 degrees. Moreover, during the publication or announcement of important information or reports, the market often trades impulsively, on emotions, so we often see illogical movement on such days. We always suggest traders wait sometimes after an important event and only then, on a cold head, to do analysis and make decisions. In the context of this knowledge, the whole last week was super emotional. At first, the market panicked because of the US inflation report, then waited for the Fed meeting, then worked out a 0.75% rate hike and Powell's promise to raise it by 0.5-0.75% next month.

There will be much fewer events and publications this week. In principle, you can only pay attention to two speeches by Powell in Congress, which do not have any special significance. First, Powell spoke last week after the Fed meeting. What new information can he give just a week after the meeting? Second, the Fed has already developed a clear plan for further actions, and it does not need to be adjusted now. Third, for Powell's rhetoric to gain new colors, at least new macroeconomic reports are needed, which have also not been available yet. Therefore, we believe that Powell will not report anything important, and the market will not react to his speeches in any way. Moreover, the text of Powell's speech may be known in advance. And since the current week will be practically empty in macroeconomic terms, traders will trade on purely "technology". And it is this moment that will allow us to understand which way most traders are looking when they are not hindered by the "foundation" or "macroeconomics". If the euro manages to show tangible growth, it can be assumed that an upward trend will still be formed. If not, then the conclusion will be obvious: the global downward trend remains in force and we can safely expect a new strengthening of the US currency.

The average volatility of the euro/dollar currency pair over the last 5 trading days as of June 21 is 123 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.0408 and 1.0655. A reversal of the Heiken Ashi indicator back down will signal a new round of downward movement.

Nearest support levels:

S1 – 1.0498

S2 – 1.0376

S3 – 1.0254

Nearest resistance levels:

R1 – 1.0620

R2 – 1.0742

R3 – 1.0864

Trading recommendations:

The EUR/USD pair quickly began to grow and quickly ended it. Thus, now it is necessary to trade on the reversals of the Heiken Ashi indicator since there is no clear trend. There is a fairly high probability of "swings".

Explanations of the illustrations:

Linear regression channels - help determine the current trend. If both are directed in the same direction, then the trend is strong now.

Moving average line (settings 20.0, smoothed) - determines the short-term trend and the direction in which trading should be conducted now.

Murray levels - target levels for movements and corrections.

Volatility levels (red lines) - the likely price channel in which the pair will spend the next day, based on current volatility indicators.

CCI indicator - its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.