{x} | Trading.live

Fundamentals

During Thursday's (July 6th) Asian session, EUR/USD shocked downward, and it is currently trading near 1.0842. Overnight, the Fed released the minutes of the June meeting, showing that almost all Fed officials agreed that there may be further tightening of policy. In addition, the market expected the Fed may raise the interest rate by 25bps at the end of the two-day policy meeting on July 26th, and the possibility is 88.7%. Meanwhile, hawkish remarks pushed up the USDX, and the EUR fell back under slight pressure against the USD. The next U.S. economic data on Thursday and Friday may pose a greater downside risk to the euro. Currently, the market's attention has shifted to the upcoming U.S. Job Openings and Labor Turnover Survey (JOLTS), ADP private employment data, and weekly initial jobless claims report, as well as the Nonfarm Payrolls report to be released on Friday. If the data supports the USD, EURUSD will plummet to 1.075 or even lower!

Data: U.S. May factory orders released yesterday were at a monthly rate of 0.3%, lower than the expected value of 0.8% and the previous value of 0.4. The market oscillated slightly yesterday due to insufficient data. Furthermore, the final Euro manufacturing index PMI fell to 43.4, indicating that the downturn in the Eurozone manufacturing sector is intensifying. Surprisingly, the producer price index declined to the lowest level since July 2009, which prompted companies to cut sales prices, indicating that the inflation slowdown will continue.

Today's key data: June Challenger Job Cuts, June ADP employment change, and initial jobless claims for the week ending July 1st.

Technical Analysis

Regarding the daily chart, since late June, EURUSD is obviously in the downward channel. Now, the MACD indicator has formed a death cross signal, the exchange rate is also suppressed by the 5-day, 10-day, and 20-day SMAs, suggesting that short-term upward momentum is gradually exhausted. Today, the initial support below is 1.0800, and the secondary support is 1.0720. About the situation above, the initial resistance is 1.0856, and the second resistance will be 1.0920. If the price remains below the first resistance, EURUSD is expected to test the first support soon, and impact the second resistance position.

Today's trading plan: Aggressive traders could try to go short with small positions at 1.0840 and set the stop-loss at 1.0856. Besides, try to fix the first target at 1.0720 and take profits partially, and set the remaining positions as breakeven orders.

Trading Recommendations

Trading direction: short

Entry price: 1.0840

Target price: 1.0720

Stop loss: 1.0856

Support: 1.0800/1.0720

Resistance: 1.0856/1.0920