EUR/USD Monthly Forecast: June 2020

Trends in this currency pair tend to be driven by the U.S. Dollar, which appears to be in the process of moving from a long-term bearish trend into a bullish trend.

EUR/USD Technical Analysis

For more than two years, there has been a relatively clear downwards trend in this currency pair, which has been driven mainly by strength in the U.S. Dollar. The trend has been slow and weak, with plenty of deep pullbacks, as is typical for this currency pair.

However, we are now seeing what looks like a trend change from bearish to bullish, as we have our first monthly close which is above the levels from both three and six months ago. This is typically a pretty good indicator for identifying the long-term trend in this currency pair.

Furthermore, if we look at the price action of the current and recent candlesticks shown in the monthly price chart below, we can see that there are long lower wicks for the three most recent candlesticks, and higher and higher closes, which typically indicate a change in direction.

Drilling down to a lower time frame, Friday’s daily candlestick threatened at one point to close at a new 50-day high, which has also historically been a good indicator of long-term trend in this currency pair. A daily close soon above 1.1140 or so will, if it happens quite soon, indicate some momentum emerging into this new bullish trend. The price has been consolidating for some time in its current price area, but last week broke above the 1.1000 level which had held it down for a while. This level is also psychologically significant as a major round number, so this is another bullish sign.

Technical analysis therefore points to a bull market and a continuing rise over June, although traders should always be careful dealing with long-term trends in this currency pair which is typically prone to deep retracement and slow overall movement.

EUR/USD 2017/2020 Monthly Price Chart

EUR/USD Fundamental Analysis

Trends in this currency pair tend to be driven by the U.S. Dollar, which appears to be in the process of moving from a long-term bearish trend into a bullish trend. This is more to do with improving risk sentiment than any particular expectations from the Federal Reserve, which has indicated negative rates are not on the agenda.

The Euro has grown stronger over the past few days and this move coincided with the announcement of a new economic rescue package from the European Union valued at €750 billion. As it seems this will not be coming from printing new money, it has had an effect of boosting confidence in the Euro.

It seems that sentiment and fundamental analysis support the bullish case for this currency pair.

Bottom Line

It looks as if the most likely scenario for June 2020 is a price rise for this currency pair. An important short-term sign that such a rise is underway will be likely to be a daily close above 1.1140.

Projected High – 1.1380

Projected Low – 1.0915

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.