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EUR/USD forecast for June 2020

May 28, 2020

May 28, 2020

Forex in June: the impossible is possibleDmitri Demidenko

The growth of global risk appetite, which looked incredible in April

and unnatural in May, can continue in June

In Forex, like in a casino, the most important is to stop at the right time. Based on the statistical analysis with fundamental components, I [recommended exiting the EUR/USD and GBP/USD shorts][1] at the end of May. Just these two operations could have increased the deposit by 6%. Alas, but the strong euro rally at the end of May has a little spoiled the whole situation. The shorts on the [EUR/USD][2] and [EUR/JPY][3] yielded losses of about 3.3%, and shorts on the [GBP/USD][4] and [GBP/CHF][5] resulted in a loss of about 3.9%. Greed may lead to losses. However, I have many times stressed that seasonal regularities should be used in addition to the fundamental and technical analysis.

June is a good time for commodity currencies. Since 1975, the AUD and CAD strengthened versus the US dollar in 27 cases against 18. The NZD performed a little worse, however, it also rose against the greenback. The idea to buy the [AUD/USD][6] and sell the [USD/CAD][7] is not new, I have [recently][8] written about this based on the lockdown stringency.

Periods of rise and fall

![LiteForex: EUR/USD forecast for June 2020][9]

Source: BoE, LiteForex analysis

The pound is usually weak in May amid the dividend payments to foreigners, which has been again proven in May. However, history proves that the situation radically changes in June. The sterling, as a rule, is among the best-performing currencies in June. The GBP median performance is behind only the AUD and the NZD. The median value was lower due to the [GBP/USD][4] sale-offs in 1975 (-6.1%), 1981 (-6.8%), 1988 (-7.9%), and 2016 (-8.4%). In the latter case, the sales resulted from the referendum on the UK membership in the EU, whose fallout is still present. For example, Boris Johnson should participate in the EU summit in June. If the UK Prime Minister makes a step towards the agreement with Brussels or extends the Brexit deadline, this will be a positive factor for the pound.

Averages and Medians

![LiteForex: EUR/USD forecast for June 2020][10]

Source: BoE, LiteForex analysis

I should note that the greenback was usually rather weak in June, which under the current conditions means the S&P 500 rally should continue. According to James Bullard, the president Federal Reserve Bank of St. Louis, if the US GDP features the worst drop in the second quarter, it should feature the best performance in the third quarter. There is still some hope for the V-shaped recovery of the US economy. Besides, the growth of the US stocks, usually followed by an increase in the global risk appetite, is a good reason to use the excellent [trading conditions offered by LiteForex][11] and buy income-earning assets. However, do remember the rule that, in Forex, like in a casino, the most important is to stop on time. Even in the best times, the AUD and the CAD rose by just 1.55% and 1.12%.

Dynamics of currencies in the periods of rise and fall

![LiteForex: EUR/USD forecast for June 2020][12]

Source: BoE, LiteForex analysis

Supported by the unity and generosity of the EU, the euro is rising. However, taking into account the seasonal strength of the Swiss franc, I would hedge the [EUR/USD][2] longs by the [EUR/CHF][13] shorts, betting on the high volatility of the world’s major currencies, which suggest moderate targets.

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Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

  • I recommend trying to trade with a reliable broker [here][14]. The system allows you to trade by yourself or copy successful traders from all across the globe.
  • Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][15] your trading account.
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of EURUSD in real time mode

![Forex in June: the impossible is possible][16]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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  2. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  3. my.liteforex.com/trading/chart?symbol=EURJPY&returnUrl=true
  4. my.liteforex.com/trading/chart?symbol=GBPUSD&returnUrl=true
  5. my.liteforex.com/trading/chart?symbol=GBPCHF&returnUrl=true
  6. my.liteforex.com/trading/chart?symbol=AUDUSD&returnUrl=true
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  13. my.liteforex.com/trading/chart?symbol=EURCHF&returnUrl=true
  14. my.liteforex.com/?category=analysts-opinions&slug=forex-in-june-the-impossible-is-possible&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
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