Current trend

The EUR/USD pair shows ambiguous dynamics, consolidating near the level of 1.0740. Trading volumes remain reduced, as traders are in no hurry to open new positions before the US Independence Day celebration on July 4. In addition, investors are waiting for the final June labor market report, which may clarify the situation regarding the prospects for adjusting the US Fed interest rate by the end of the year.

Analysts expect a slowdown in nonfarm payrolls from 272.0K to 190.0K and a decrease in average hourly earnings from 4.1% to 3.9% YoY and from 0.4% to 0.3% MoM. The unemployment rate may remain unchanged at 4.0%. Today at 14:15 (GMT 2), the Automatic Data Processing (ADP) report on private-sector employment is due. The indicator may increase from 152.0K to 160.0K. At 20:00 (GMT 2), the minutes of the June US Fed meeting are due.

Today, the EU producer price indices are due, supplementing the consumer inflation data received yesterday. The June index slowed from 2.6% to 2.5% YoY and remained at 0.2% MoM, and the core indicator remained at 2.9% YoY with the forecast of 2.8% and changed from 0.4% to 0.3% MoM. Against this background, the officials of the European Central Bank (ECB) remain cautious in their rhetoric. Thus, yesterday, the head of the department, Christine Lagarde, said that the regulator needed more time to ensure that the consumer price index is moving steadily toward the target level of 2.0%, so the ECB will ease the monetary policy at a moderate pace. Lagarde also noted that the risks of a recession had not yet been eliminated, and the prospects for further economic growth looked uncertain.

Support and resistance

On the daily chart, Bollinger bands reverse into the horizontal plane. The price range is expanding slightly from above, letting the “bulls” renew local highs. MACD is growing, maintaining a strong buy signal (the histogram is above the signal line). Stochastic, approaching “80”, reversed into a horizontal plane, reacting to the emergence of ambiguous trading dynamics at the beginning of the week.

Resistance levels: 1.0765, 1.0800, 1.0820, 1.0842.

Support levels: 1.0730, 1.0700, 1.0665, 1.0630.

Trading tips

Long positions may be opened after a breakout of 1.0765, with the target at 1.0820. Stop loss is 1.0730. Implementation period: 2–3 days.

Short positions may be opened after a breakdown of 1.0730, with the target at 1.0665. Stop loss is 1.0765.