EUR/USD 5-Minute Analysis

During Monday's session, the EUR/USD currency pair moved in both directions. First, there was a sharp decline in quotes (for those who weren't asleep) triggered by Israel's attack on Iran. Then, the pair followed a relatively strong recovery. Why did the recovery happen at all? Why didn't the dollar continue to strengthen? The market quickly remembered one simple fact—the dollar is no longer considered a "safe haven."

How was it in the past? When a new geopolitical conflict emerged, capital would quickly flow out of the affected countries. And to move capital, foreign currencies are needed — euros, dollars, pounds. Since the U.S. economy was always seen as stable with a top credit rating, demand for the dollar surged, driving its value up.

What's the situation now? The market no longer sees the U.S. economy as stable or promising, nor does its government see it as leading the country to a "great future." As a result, investors prefer to buy yen, pounds, or euros. That's why the dollar quickly returned to its starting position.

As for macroeconomic data, German inflation attracted no interest since the second estimate was identical to the first. Industrial production in the eurozone again predictably declined and was worse than forecasts. The euro could have continued falling in the morning, but, as mentioned, nobody is currently interested in buying the dollar.

The trading signals from Friday were not very favorable. The price frequently changed direction throughout the day, resulting in inaccurate levels and lines. We can expect a similar situation today, as the market remains emotionally driven by Donald Trump's initiatives and the renewed conflict in the Middle East. Throughout the day, the price may again ignore technical levels and the Ichimoku indicator, showing sharp movements and frequent reversals. Nonetheless, the uptrend remains intact and unquestioned.

COT Report

The latest COT report is dated June 10. As shown in the chart above, the net position of non-commercial traders has been bullish for a long time. Bears gained the upper hand briefly at the end of 2024 but quickly lost it. Since Trump assumed the U.S. presidency, the dollar has done nothing but decline.

We can't say with 100% certainty that the dollar will continue to fall, but current global developments suggest that it will.

We still don't see any fundamental drivers supporting the euro, but one strong reason remains for continued dollar weakness. The global downtrend is still in place, but who cares about the 16-year price history now? If Trump ends his trade wars, the dollar may start to rise again — but will he ever end them? And when?

The red and blue lines have crossed again, meaning the market trend has become bullish again. During the latest reporting week, long positions in the "Non-commercial" group rose by 6,000, while short positions declined by 4,300. Therefore, the net position increased by 10,300 over the week.

EUR/USD 1-Hour Analysis

The EUR/USD pair maintains a local upward trend in the hourly timeframe despite breaking and surpassing all possible ascending trend lines. As before (for the past four months), the market reacts solely to Trump-related events, his decisions, and the trade war. Now added to this "wonderful and positive package" is a full-scale war in the Middle East. There is no good news, only bad — plenty of it. Therefore, the dollar continues to plunge briskly.

For June 16, the following levels are highlighted for trading — 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1615, 1.1666, 1.1704, 1.1750, as well as the Senkou Span B (1.1353) and Kijun-sen (1.1501) lines. The Ichimoku indicator lines may shift during the day, which should be considered when identifying trading signals. Don't forget to set Stop Loss to breakeven when the price moves 15 pips in the desired direction — this will help avoid potential losses in case of false signals.

No crucial events or reports are scheduled in the Eurozone or the U.S. on Monday, but developments will undoubtedly occur throughout the day. At a minimum, the market could react to Iran's retaliatory strike on Israel. We believe we won't see a "boring Monday" this time.

Illustration Explanations:

• Support and resistance price levels – thick red lines where movement may end. They are not trading signal sources.
• Kijun-sen and Senkou Span B lines—These are strong Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour one.
• Extremum levels – thin red lines where the price has previously rebounded. These act as trading signal sources.
• Yellow lines – trend lines, trend channels, and other technical patterns.
• COT Indicator 1 on the charts – the size of the net position for each category of traders.