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06.07.2026 04:48 AM
The EUR/USD currency pair showed no willingness to move in either direction on Friday, with low volatility throughout the day. This is not surprising, as it was a holiday in the U.S. for Independence Day. Therefore, there were no important reports or significant publications throughout the day. Only a speech by European Central Bank President Christine Lagarde took place, who has been speaking fairly often lately. Overall, the European currency continues to correct within a two-month downward trend. Since the market remains hesitant to buy euros and sell dollars, we believe the decline in the EUR/USD pair may resume at any time. The market continues to ignore most macroeconomic, fundamental, and geopolitical events, trading by its own rules. This week, there will be few important events, so movements may be technical in nature.
From a technical perspective, the upward trend continues, but after nine days of growth, the price is still below the Senkou Span B line, which speaks volumes about the current strength of the bulls. If the Senkou Span B line is broken, it will provide some support to the euro. Even if just a little. A consolidation below the trend line will bring the bears back into the market.
On the 5-minute timeframe, exactly one buy signal was generated on Friday. Early in the Asian trading session, the pair broke above 1.1433 but returned to that level by the end of the day. Thus, the signal was not false, but only a 10-15-pip profit could be made from it.
The last COT report is dated June 23. The weekly timeframe illustration clearly shows that the net position of non-commercial traders remains bullish but has declined significantly due to geopolitical events. Traders have been disposing of the European currency in favor of the U.S. dollar in recent months. Donald Trump's policies have not changed, but for some time the dollar has served as a "reserve currency." However, this process may have already concluded.
We still do not see any fundamental factors supporting the strengthening of the European currency, but there are plenty of factors for a decline in the American dollar. The war in the Middle East has made the dollar temporarily super attractive, but once this factor's "shelf life" expires, everything will return to normal. And that expiration may have already occurred. In the long term, the euro could fall even to the level of $1.08 (the trend line), but the upward trend will still remain relevant. Over the past few months, the pair has not come particularly close to this line.
The positions of the red and blue lines in the indicator indicate parity between bulls and bears. During the last reporting week, the number of long positions in the "Non-commercial" group increased by 19,300, while the number of shorts increased by 23,500. Consequently, the net position fell by 4,200 contracts over the week.
On the hourly timeframe, a corrective upward trend is forming within a two-month downward trend. The situation in the Middle East remains tense, but we do not believe that further strikes by Iran and the U.S., or uncertainty in negotiations over a deal, are sufficient grounds for the dollar to strengthen further. The Federal Reserve supported the American currency three weeks ago, yet the market ignores all factors favoring the euro.
For July 6, we highlight the following trading levels: 1.1234, 1.1274, 1.1362, 1.1433, 1.1536-1.1542, 1.1585, 1.1657-1.1666, 1.1750-1.1760, 1.1786, 1.1830-1.1837, as well as the Senkou Span B line (1.1474) and Kijun-sen (1.1417). The Ichimoku indicator lines may move throughout the day, which should be considered when determining trading signals. Always remember to set the stop-loss order to breakeven if the price moves in the right direction by 15 pips. This will protect you from potential losses if the signal proves false.
On Monday, retail sales and the producer price index will be published in the Eurozone, along with another speech by Christine Lagarde. In the U.S., the ISM Services PMI will be released today, and this report is the most significant event of the day.
Today, traders may consider short positions targeting 1.1362 if the price consolidates below the trend line. Long positions can be opened on a bounce from the 1.1417-1.1433 area, targeting 1.1474 and 1.1536-1.1542.
