Technical analysis of GBP/USD currency pair for the week of July 6-11

Trend analysis.

The price, from the level of 1.2478 (closing of the last weekly candle), is expected to rise this week, with the goal of reaching a pullback level of 61.8% - 1.2597 (red dotted line). If this level is reached, we can continue to work upwards with the target of 1.2703 - resistance line (red bold line). From this line, a downward movement is possible.

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Fig. 1 (weekly schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger Bands - neutral;

- monthly chart - up.

The conclusion of a comprehensive analysis is an upward movement.

The overall result of calculating the candle of the GBP/USD currency pair according to the weekly chart: the price for the week will most likely have an upward trend with the absence of the first lower shadow of the weekly white candlestick (Monday - up) and the absence of the second upper shadow (Friday - up).

The first upper goal is to reach the pullback level of 61.8% - 1.2597 (red dashed line). If this level is reached, continue to work upwards with the target 1.2703 - resistance line (red bold line).

An unlikely but possible scenario: when moving up and reaching a pullback level of 50% - 1.2530 (red dashed line), the price will decline, so that the lower fractal - 1.2250 (red dashed line) will be reached.

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Technical analysis of EUR/USD currency pair for the week of July 6-11

Trend analysis.

The price, from the level of 1.1245 (closing of the last weekly candle) can continue to move up this week, with the first goal of 1.1276 – a pullback level of 76.4% (blue dotted line). After reaching this level, work further up with the next target 1.1330 - resistance line (red bold line). From this line, work can start downwards.

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Fig. 1 (weekly schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - neutral;

- trend analysis - up;

- Bollinger Lines - up;

- monthly chart - up.

The conclusion of a comprehensive analysis is an upward movement.

The total result of calculating the candlestick of the EUR/USD currency pair according to the weekly chart: the price for weeks is more likely to have an upward trend, with the absence of a lower shadow for the weekly white candlestick (Monday - up) and the absence of a second upper shadow (Friday - up).

The first upper target of 1.1276 is a pullback level of 76.4% (blue dashed line). Upon reaching this level, work further upward to the next goal of 1.1330 - resistance line (red bold line). It is possible to pull back down from this line.

An unlikely scenario: working down with a target of 1.1121- pullback level of 38.2% (red dashed line) when moving up and reaching a pullback level of 76.4% - 1.1245 (blue dashed line) is unlikely.

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COVID-19, hanging over the markets, hinders the speed of their recovery (growth of AUD/USD and NZD/USD pairs is expected)

The very good data on US employment published on Thursday not only had a noticeable local impact on the US dollar, which fell to major currencies over the week, but also inspired stock markets, allowing major US, European and Asian stock indices to finish the week in positive note as well as oil quotes of the two main brands Brent and WTI.

So why are investors so optimistic about America's strong employment data? And why have the growth of markets and the weakening of the dollar been limited?

In our opinion, the reasons remain the same. This is the uncertainty of how the situation around the coronavirus pandemic will develop and, as a result, the ability of economically developed countries to further expand economic activity and rebuild their economies.

Of course, the incoming economic data from China, the USA and Germany, as the leader of continental Europe, indicate that the process of recovery of national economies continues to grow. This is the most important factor that stimulates the growth of demand for risky assets, supports crude oil prices and puts pressure on the US dollar. But the spells of WHO (World Health Organization) that the risks of the second wave of the pandemic are extremely high, the surge in the number of people infected in the United States amid social unrest and chaos caused by robberies and killings force investors to be vigilant, despite the logic of buying shares in companies in the wake of the recovery process.

Global markets continue to move very cautiously. Positive news and rumors push the value of assets up, but the return of the negative again almost levels everything.

A similar picture is observed in the currency market. Over the past four weeks, major currency pairs have consolidated in fairly narrow ranges and only the yen and the franc managed to grow against the dollar. However, the currencies of emerging economies were under attack. This is due to the outflow of capital from EM.

We expect that the beginning of the week will most likely show the same dynamics as in the past week, while the factor of COVID-19 will hang over the markets.

Forecast of the day:

The AUD/USD is trading below a strong resistance level. Positive dynamics in Asia pushes commodity currencies to growth. Breaking through the price level of 0.6975 will lead to a growth in the pair to the level of 0.7040.

The NZD/USD pair is also growing, approaching a strong resistance level of 0.6560, breaking through which, in the wake of positive moods in the Asia-Pacific region, will lead to a growth in the pair to the level of 0.6655.

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Technical Analysis of EUR/USD for July 6, 2020:

Technical Market Outlook:

The EUR/USD pair has been trading inside of the narrow range located between the levels of 1.1185 - 1.1347 for quite some time now, so the market participants await an important breakout. The next intraday resistance for bulls is seen at the level of 1.1302, so please pay attention to this level as any violation of 1.1302 open the road towards the 1.1347. On the other hand, the key intraday support is still seen at the level of 1.2228 and break out below this level will likely end up in test of the .1185 support. The momentum remains positive on H4 time frame, but there is no clear indication regarding the market conditions.

Weekly Pivot Points:

WR3 - 1.2879

WR2 - 1.2698

WR1 - 1.2610

Weekly Pivot - 1.2423

WS1 - 1.2323

WS2 - 1.2148

WS3 - 1.2056

Trading Recommendations:

On the EUR/USD pair, the main long-term trend is down, but the local up trend continues. The key long-term technical support is seen at the level of 1.0336 and the key long-term technical resistance is seen at the level of 1.1540. Only if one of this levels is clearly violated, the main trend might reverse (1.1540) or accelerate (1.0336).

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Technical Analysis of GBP/USD for July 6, 2020:

Technical Market Outlook:

The GBP/USD pair has been hovering around the level of 1.2438 for most part of the weekend, but during the early Monday trading hours the bullish activity has increased. It looks like the bulls might want to test the 50% Fibonacci retracement once again, so in the case of a successful breakout, the next target for them is 61% retracement located at the level of 1.2597. Please notice, there is an important intraday technical resistance located just above 50% Fibonacci retracement at the level of 1.2542. On the other hand, the nearest technical support is still seen at the level of 1.2406 and 1.2362.

Weekly Pivot Points:

WR3 - 1.2879

WR2 - 1.2698

WR1 - 1.2610

Weekly Pivot - 1.2423

WS1 - 1.2323

WS2 - 1.2148

WS3 - 1.2056

Trading Recommendations:

On the GBP/USD pair the main trend is down, which can be confirmed by the down candles on the weekly time frame chart. The key long-term technical support has been recently violated (1.1983) and the new one is seen at the level of 1.1404. The key long-term technical resistance is seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518) or accelerate (1.1404). The market might have done a Double Top pattern at the level of 1.2645, so the price might move even lower in the longer-term.

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Hot forecast and trading recommendations for EUR/USD on July 6, 2020

As expected, in the absence of US traders who were on holiday last Friday due to the Independence Day occasion, nothing happened in the market at all. Although the euro had a reason for growth. So as soon as the new trading week began, market participants quickly began to win back Friday's data, and at the same time, they are preparing for today's publication of retail sales data.

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The final data on business activity indices in Europe were slightly better than forecasts, the market did not react to this in any way but due to the holiday in the United States. Thus, the index of business activity in the services sector rose from 30.5 to 48.3. The composite PMI rose from 31.9 to 48.5. At the same time, the preliminary estimate showed an increase in the index in the service sector to 47.3, and the composite index to 47.5. So the market began to win back such positive news with the beginning of a new week.

The composite index of business activity (Europe):

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However, the growth of the indices at the time of publication of the preliminary assessment was included in the cost of the euro. And a slightly more active growth, and even with a delay, could not in itself provide the euro with sharp growth. So to some extent, traders are anticipating retail sales growth in Europe, which should increase by 14.8%. But this is in monthly terms. On an annual basis, the rate of decline should slow down from -19.6% to -8.6%. There is no doubt that this is a very positive factor, indicating that the European economy is trying to recover from a deep recession, partly caused by restrictions due to the coronavirus epidemic.

Retail sales (Europe):

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But business activity indices are growing not only in Europe, but also in the United States. What the final data on these indexes should confirm today. Thus, the index of business activity in the service sector should grow from 37.5 to 46.7. The composite index is expected to grow from 37.0 to 46.8. But in theory, this should not affect the market in any way, since all this has already been taken into account by traders when the preliminary assessment was released. However, the single currency is growing quite noticeably, and this is against the background of playing back the previous data, and before the release of others. In other words, the euro's growth right here and now is not fully justified. So the US data could be a reason for a small adjustment.

The composite index of business activity (United States):

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From the point of view of technical analysis, we see a sharp surge in activity during the Asian session, where after Friday's stagnation, speculators could not sit still, and eventually returned the quote to the limits of the highs of the previous week. In terms of dynamics, there is a gradual decline in volatility, but it is still insignificant, and speculative excitement is still high. Regarding the details of the fluctuation, it is worth highlighting the horizontal price movement, which has been going on for the third week, periodically changing the width of the 1.1180/1.1300 ---> 1.1180/1.1350 range.

It is worth considering that the range level of 1.1180 [1.1165//1.1180//1.1190] plays an integral role in the structure of the range, as well as the market mood of speculators.

Considering the trading chart in general terms (daily period), you can see that variable ranges are nothing more than stagnation at the conditional peak of inertia.

We can assume that the area of 1.1285/1.1300 will once again put pressure on market participants, resulting in a slowdown and a rebound in the opposite direction, which, in turn, will resume the course within the previously established range of 1.1180/1.1300.

An alternative scenario will be considered if the price is pinned higher than 1.1305, which will lead to a local move towards the variable border of 1.1350.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments for minute and hour periods signal a purchase due to a local upward rise.

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Technical Analysis of BTC/USD for July 6, 2020:

Crypto Industry News:

A recent Blockchain Tencent accelerator competition took place in Shenzhen, China. The topic concerned "Blockchain industry and ecological construction".

According to local news, Professor Zhu Jiaming, a former United Nations Industrial Development Economist and President of Chinese Digital Assets Research, believes that "2020 is an important year for Blockchain integration in various industries and this is a key period in the history of Blockchain development and applications."

Zhu says that there is an unprecedented consensus on Blockchain status in macroeconomic and social governance, and that he has reached a national strategic level. He admits that Blockchain application scenarios have been extended in recent years. He also states that the combination of Blockchain with various industries has become more developed, and that the ecology of Blockchain industrialization has begun to appear. In this context, Zhu Jiaming believes that "Strategy, interaction, ecology and acceleration" have become the key words for Blockchain integration.

Apparently 60 companies participated in the Tench Blockchain accelerator competition. They were divided into three groups: "industrial Blockchain solutions", "industrial Blockchain infrastructure" and "industrial blockchain peripheral services". They cover finance, government affairs, logistics, legal affairs, education, industry and other industries, with a total value of over 10 billion yuan, or about $ 1.40 billion.

Technical Market Outlook:

The BTC/USD pair has been trading inside of a narrow zone during the weekend after the bulls had managed to made a Pin Bar candlestick formation during the tests of the level of $8,858. The price keeps trading below the key short-term trend line resistance as well and the bears are making lower highs during a bounces. The momentum is hovering around the fifty level, which is a neutral level for both market participants, but in a case of any breakout higher above the trend line, the next target for bulls is seen at the level of $9,150 and $9,240. Only a sustained breakout above the $9,240 would put the bulls back in control over the market again.

Weekly Pivot Points:

WR3 - $9,487

WR2 - $9,346

WR1 - $9,113

Weekly Pivot - $8,999

WS1 - $8,779

WS2 - $8,645

WS3 - $8,425

Trading Recommendations:

The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred until the level of $10,791 is clearly violated. The key mid-term technical support is located at the level of $7,897.

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Dollar under attack: New spike in COVID-19 infections recorded in US

The dollar index started the trading week with a small downward gap, and it slowly fell on Monday during the Asian session, returning to the area of the 96th figure. The greenback lost all the gains it made last week, once again demonstrating its vulnerability and in a certain sense – unreliability. Against the background of fairly strong nonfarm (with the exception of the inflationary component), the US currency could well develop a rally, especially since other macroeconomic reports (the ISM manufacturing index, consumer confidence indicator) also came out in the green zone, confirming the gradual recovery of the US economy. But all the achievements of the American economy are offset by the coronavirus, which continues to spread actively on the territory of this country. The United States is updating anti-records, while the pace of COVID-19 distribution around the world is gradually slowing. Coronavirus has become the #1 topic for dollar bulls, and the corresponding news flow does not contribute to the growth of the US currency.

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According to the World Health Organization, the US accounted for 53,000 of the 212,000 new infections in the world last Friday. The upward trend is observed in the southern and western states of the country – many of them were among the last to introduce strict quarantine restrictions at the beginning of the epidemic, but they were the first to begin to lift them. Some states reported a record daily increase in the number of confirmed COVID-19 cases over the weekend. First of all, we are talking about Florida – 11,460 cases were recorded there on Saturday alone. This anti-record is second only to the record that was registered in new York in mid-April, that is, at the peak of the epidemic – 11,570 patients were detected there in 24 hours. Texas is another hot spot on the map of the USA. 8,258 positive tests for COVID-19 were registered in this state on Saturday. Many other states in the country have also updated anti-records, including North Carolina, South Carolina, Tennessee, Alaska, Missouri, Idaho, and Alabama. It is noteworthy that repeated outbreaks are recorded as the quarantine restrictions in these regions of the United States are relaxed. Along with Texas and Florida, the most severe situation persists in Arizona: according to recent reports, about 25% of all tests for COVID-19 came back positive.

Investors are concerned about the trend itself. For example, if from June 8 to 24, the daily increase in infected people in the United States fluctuated in the range of 15-25,000, then from June 24, this indicator began to show a stable upward trend, exceeding the 30,000 mark and then the 40,000 mark. In early July, the United States updated the anti-record several times when the indicator exceeded the 50,000th level. And the current decline in the dollar index is also associated with coronavirus, given the divergent dynamics in the world and in the US. So, over the past day, COVID-19 was detected in 75,499 people in the world – this is 14,188 fewer cases than it was the day before. However, the incidence rate is still at a high level in the United States: 44,530 patients with coronavirus were registered there on Sunday.

The White House, for its part, remains calm. Commenting on the latest anti-records, US President Donald Trump on Saturday once again said that the growth of coronavirus in the United States is associated with an increase in the number of tests. Earlier, he had already voiced this idea, and at the same time made it clear that Washington is not going to re-close the country to quarantine. White House officials also oppose the lockdown – but they also recognize that local authorities can tighten quarantine restrictions at the federal level. At first, this position provided background support for the dollar. But now, when the alarming trend is observed in almost all the southern and western states of the country, the US currency's immunity has weakened. After all, the authorities of these states can return strict quarantine at the local level, which in total will be comparable to a large-scale nationwide lockdown. At the same time, the next spike in the incidence is expected in the coming days – the United States will feel the consequences of the Independence Day celebrations (the incubation period of COVID-19 is on average 4-5 days).

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Therefore, the US currency may come under additional pressure this week. As we can see, macroeconomic reports by and large do not work, no matter how rosy they are - they only have a temporary impact on the mood of investors. While the rate of spread of coronavirus in the United States is of great concern to traders. According to the country's chief epidemiologist, if the current trend continues, the United States will face a 100,000 a day increase in infected people in the foreseeable future. Therefore, if the daily increase exceeds the 50,000 mark again this week, the dollar will weaken throughout the market.

If we talk about the EUR/USD pair, the price was able to overcome the average line of the Bollinger Bands indicator (on the daily chart) during the Asian session on Monday. If the pair is pinned above 1.1260, the Ichimoku indicator will form a bullish Parade of Lines signal, which will allow you to rise to the next resistance level of 1.1350 (the upper line of the Bollinger Bands on the same timeframe).

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Elliott wave analysis of GBP/JPY for July 6, 2020

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After the break above resistance at 133.65 GBP/JPY should continue to push higher towards the next minor target at 135.90. A break above here will confirm a continuation towards the 139.74 peak and ultimately a break above here too for a rally closer to 148.32 as the next major target.

Short-term support is seen at 134.20 and then at 133.70.

R3: 135.90

R2: 135.55

R1: 135.06

Pivot: 134.55

S1: 134.20

S2: 133.90

S3: 133.70

Trading recommendation:

We are long GBP from 132.85 and we will raise our stop to break-even

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Elliott wave analysis of EUR/JPY for July 6, 2020

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EUR/JPY continues to move higher. It is now trying to break above the last weeks' sideways consolidation indicating renewed upside pressure towards 122.12 as the next minor upside target. In the longer term, EUR/JPY should continue to move higher towards the 124.43 peak and ultimately also break above here for a rally towards at least 129.30.

Short-term support is seen in the 121.10 - 121.30 area, which is expected to protect the downside for the next push towards 122.12.

R3: 122.12

R2: 121.71

R1: 121.56

Pivot: 121.30

S1: 121.10

S2: 120.95

S3: 120.71

Trading recommendation:

We are long EUR from 119.95 and we wil raise our stop to 120.71

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Bitcoin to test retail support at 8890.60, July 06, 2020.

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Bitcoin is trying to test the Liquidity Pool around the Retail Support (Clean Low) at 8890.60. If the bearish momentum is strong there is chance that bitcoin will drop to 8795.35. This scenario is likely to occur if bitcoin does not rise and close above the 9144.10 level.

(Disclaimer)

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Technical Analysis of ETH/USD for July 6, 2020:

Crypto Industry News:

Elon Musk has long aroused interest in the cryptocurrency environment. With unclear reasons, many investors on the BTC market are waiting for the creator of Tesla to invest in digital currencies. Last week, the famous businessman only admitted that ... has nothing to do with Ethereum.

Almost a year ago, Twitter post by William Shatner appeared. He suggested (half-jokingly, semi-seriously) that Vitalik Buterin and Elon Musk should consider building a platform based on Ethereum.

Then, in May 2019, none of the most interested responded. However, now Musk finally reacted and wrote on Twitter:

"I'm not building anything on ethereum. Not for or against it, just don't use it or own any".

Musk has long been arousing emotions on the market. First, many scams were based on his fake accounts. The fraudsters set up profiles that suggested that Tesla's CEO was behind them, and then persuaded naive Internet users to send them funds at BTC. In response, they were supposed to send a few times more cryptocurrencies. As you could easily guess, it was just a simple recruitment. It turned out, however, that some people fell for it. Why? Perhaps the reason was that Musk looks like a little crazy who would be able to do something so strange. In addition, the eccentric businessman recently announced that he was selling all his physical assets, including home. Then many BTC investors dreamed that he would buy cryptocurrency for such acquired funds.

Musk himself, however, already has cryptocurrencies, but apparently it is only 0.25 BTC. A little bit for a billionaire.

Technical Market Outlook:

The ETH/USD has has almost hit the intraday support located around the level of $222, but it was not clearly violated yet. The market is still trading below the short-term trend line resistance, so the odds for another low are high as the momentum is still weak and negative. Neither bulls nor bears can make up their mind and made a breakout in either direction. The next target for bears is seen at the level of $217.65 and $209.89 and the nearest technical resistance for bulls is seen at the level of $232 ( just above 50% of the Fibonacci retracement located at $231.94).

Weekly Pivot Points:

WR3 - $241.60

WR2 - $236.80

WR1 - $229.63

Weekly Pivot - $225.04

WS1 - $218.03

WS2 - $213.12

WS3 - $205.61

Trading Recommendations:

The larger time frame trend on Ethereum remains down and as long as the level of $288 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred. The next key technical support is seen at the level of $174.82.

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GBP/USD: plan for the European session on July 6 (analysis of yesterday's trade). Pound buyers defended support at 1.2451

To open long positions on GBP/USD, you need:

Pound buyers managed to defend support 1.2451 amid weak volatility and low trading volume, which preserves the prerequisites for the pair's further growth in the short term. News of another failed round of talks between London and Brussels did not significantly affect the pound's quotes. While trading is conducted above the area of 1.2451 at the moment, we can expect the pound to continue growing to the high of 1.2528, consolidating above which will necessarily lead the pair to a new resistance area of 1.2607, where I recommend taking profits. In case GBP/USD falls in the first half of the day, forming a false breakout at the level of 1.2451 will be a signal to open long positions. This could happen after the release of good reports on activity in the construction sector in the UK, which is gradually reviving after the coronavirus pandemic. If there is no activity from the bulls in this range, it is best to postpone purchases until the update of the larger area at 1.2386, from which the bulls will try to build the lower border of the new ascending channel.

To open short positions on GBP/USD, you need:

Sellers of the pound will definitely show activity in the resistance area of 1.2528, which they managed to protect last Thursday, forming a fairly good sell signal from there. The bears need to consolidate below the level of 1.2451 at the moment, which will be a signal to open short positions in the expectation of resuming the downward correction to the area of the low of 1.2386, where I recommend taking profits. In case GBP/USD grows further, it is best to postpone sales until a false breakout forms at the level of 1.2528. But you can safely open short positions immediately for a rebound only after testing the high of 1.2607, counting on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates the uncertainty of traders with a further Outlook.

Note: the period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

The downward movement will only continue after the breakout of the lower border of the indicator in the area of 1.2451. Growth above the upper limit of the indicator in the area of 1.2492 will lead to a new upward wave of the pound.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial traders are speculators, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on July 6 (analysis of yesterday's trade). Euro buyers returning to the market. Aim

To open long positions on EUR/USD, you need:

Last Friday, after good data on the PMI index for the eurozone services sector, the bears tried to renew pressure on the euro. However, with every false breakout, major players did not provide help, which ultimately led to trading week ending above the range of 1.1241. We see active purchases of the European currency from this level in the Asian session. If the pair falls during the first half of the day, a repeated test of the 1.1241 area and forming a false breakout there will be a signal to open long positions in the hope of continuing to strengthen EUR/USD to last week's high in the area of 1.1297. An equally important task is to break through and consolidate in this range, which will cause the euro to grow further towards the high of 1.1346. However, its update will depend on how today's data on retail sales in the eurozone and the level of investor confidence turns out. If the pressure on the euro returns in the first half of the day, and the bulls are not active in the support area of 1.1241, it is best to wait for another decline to the area of 1.1193 and buy EUR/USD there immediately for a rebound based on a correction of 25-30 points within the day.

To open short positions on EUR/USD, you need:

Euro sellers will be waiting for weak data on retail sales in the eurozone and a poor report on the US services sector. However, returning the pair to the sub-area of support of 1.1241, which is a kind of middle of the side channel of the previous week, and consolidating under it will be a signal to open short positions. This scenario will lead to a repeated decline in EUR/USD to the low of 1.1193, the next test of which will increase pressure on the euro and sharply pull down the pair to the lows of 1.1155 and 1.1106, where I recommend taking profits. If the bears are not active in the 1.1241 area, it is best to postpone short positions until the upper limit of the 1.1297 channel is updated, to which the pair is now gradually approaching. However, forming a false breakout on it will be a signal to sell the euro. Bigger players will return to the market from the high of 1.1325, a test of which can lead to a downward correction of EUR/USD of 25-30 points within the day.

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Indicator signals:

Moving averages

Trading is conducted above 30 and 50 moving averages, which indicates that the bulls are trying to return to the market.

Note: the period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair declines, the lower border of the indicator around 1.1215 will provide support.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial traders are speculators, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.
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Control zones for USDJPY on 07/06/20

Today's trading plan is based on the test of WCZ 1/2 107.90-107.74. If the test leads to forming an absorption pattern in the line of strengthening the yen, then sales will again come to the fore. The target for the decline is last week's low. It is important to understand that the priority has already changed to the ascending one from last week.

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If purchases for the instrument are already open, then you need to keep them. You will be able to convert to breakeven after updating the monthly high.

An alternative model for a decline will develop if today's trading closes below the WCZ 1/4 107.33-107.25. This will allow you to consider working within the accumulation zone. The target for the fall will be the WCZ 1/2 106.51-106.35.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Forecast for EUR/USD on July 6, 2020

EUR/USD

The market was completely calm and thin on Friday and the euro gained seven points. The technical picture has seriously moved towards the euro's rise this morning, towards the nearest target of 1.1420. Apparently, investors continue to test the market for its ability to take risks. This is confirmed by the increase in the yields of government bonds in Australia and the United States and the decline in gold prices in the Asian session. The signal line of the Marlin oscillator remains in the zone of negative indicators, it is not in a hurry to grow, which creates a sign of divergence that is beginning to form. The euro could reach 1.1465.

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The price went over the balance indicator line on the H4 chart, the market balance shifted mainly to purchases, to the euro's growth. Consolidating the price above 1.1265 will allow it to continue growing towards the intermediate target of 1.1353, then to 1.1420. Marlin in the growth zone.

It is difficult for the price to move down. In order to do this, it needs to overcome the support of the MACD line (1.1214), but this action already requires strong fundamental factors. If they do not follow during the day, we are waiting for the price to increase further.

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Forecast for GBP/USD on July 6, 2020

GBP/USD

The price slightly rebounded from the balance indicator line on the daily scale chart on Friday. This rebound was confirmed since the market opened today, and the price continues to grow from it. The signal line of the Marlin oscillator is consolidated directly in front of the border of the bulls' territory, the transition of this signal line to the zone of positive values will form a growing trend until the end. Growth targets are correctly determined by the Fibonacci levels: 1.2540 (123.6%) and 1.2645 (110.0%).

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The price continues to rise above the balance line (indicator red) and the Krusenstern line (blue) on the four-hour scale chart. Marlin horizontally moves in the area of a growing trend. It will be difficult for the market to turn the tide of growth in this situation, it will need to go under the MACD line (1.2370), and this is a decrease from the current price of 113 points, breaking the intermediate support of 1.2424 at the Fibonacci level 138.2%.

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So, we are waiting for growth to continue towards the goals of 1.2540 and 1.2645.

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Forecast for AUD/USD pair on July 6, 2020

AUD/USD

The Australian dollar is pinned above the level of 0.6900 oon the daily chart. The pair grew by 18 points last Friday. The growth continues today in the Asian session. The Marlin oscillator entered the growing trend zone today. Now the aussie's actual goal is 0.7080.

There is a high probability that the first goal will be overcome in order to form a divergence with the Marlin oscillator.

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The price accelerates growth over the balance indicator lines (red) and the MACD indicator lines (blue) on the four-hour chart. The signal line of the Marlin oscillator came out of the local consolidation (gray rectangle) up. We are waiting for the growth to continue towards the goal of 0.7080.

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Forecast for USD/JPY on July 6, 2020

USD/JPY

The USD/JPY pair gave a clear signal for growth today in the Asian session. After the price consolidated under the balance on the daily scale chart for two days, the price surged when other indicators confirmed the growth.

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This is the exit of the Marlin oscillator into the growing trend zone - above the zero line, and the transition of the horizontal MACD line, which it has been in for the last two days, into a growing trend. The nearest growth target is 108.38. Then to 108.95. A decrease in the price below 107.08 (this is an alternative option) will turn the price into a medium-term decline.

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The price is rising above the red balance indicator line on the four-hour chart – the balance has shifted to a preferential growth, the Marlin oscillator has invaded the territory of the bulls. We are waiting for the USD/JPY pair to grow further.

Indexes are showing healthy growth on the stock market: Nikkei 225 1.45%, China A50 2.42%, Kospi SEU 1.20%, which convey optimism to the USD/JPY pair.

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CADJPY approaching swing high! Pullback towards trendline expected!

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Trading Recommendation

Entry: 79.703

Reason for Entry: Recent swing high, -27% Fibonacci retracement, 161.8% Fibonacci extension

Take Profit: 79.332

Reason for Take Profit: 61.8% Fibonacci retracement, ascending trendline support

Stop Loss: 79.914

Reason for Stop Loss: 161.8% Fibonacci extension

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Overview of the GBP/USD pair. July 6. The UK is relaxing its quarantine measures. Doctors are preparing for a new outbreak

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward.

CCI: 74.2307

The British pound starts a new trading week with an attempt to resume the upward movement. Since the pair is currently anchored above the moving average line, the blue bars of the Heiken Ashi indicator signaled a downward correction, which could already be completed. Thus, on the first trading day of the new week, the pound/dollar pair may try to resume an upward movement, according to the new trend. However, it is noteworthy that the pair failed to update the previous local maximum, which is also the Murray level of "5/8"-1.2512. Thus, it is not excluded that the downward movement will be resumed with a departure below the moving average.

For the British pound, the fundamental background still comes down to negotiations on an agreement that will be in effect between the UK and the European Union after December 31, 2020. Recall that not so long ago, both sides of the negotiation process confirmed that the "transition period" will not be extended, which means that after 2020, all current agreements will be canceled. The old ones will be canceled, however, the new ones still can't be signed. Last week, a new round of talks was launched between the groups of Michel Barnier and David Frost, however, the parties did not even wait for its completion, saying that there was no progress in the negotiations and there was no reason to continue them.

In addition to this negative information, last week it became known that GDP in the first quarter decreased by 1.7% y/y, although forecasts were slightly more optimistic. And despite all this information, the British pound still rose in price. We believe that in the current conditions, this strengthening of the British currency should not be given too much attention. We believe that there is no pronounced trend at the moment, and the United States and the UK are competing with each other, whose fundamental background will be worse. About the problems that America has faced recently, everyone has long been familiar with and aware of. Thus, we believe that neither the pound nor the dollar can have a clear advantage at this time. Based on these considerations, the pair may try to return to the area below the moving average line at the beginning of the new week. We also remind you that the macroeconomic background is still ignored in most cases and is ambiguous in almost all cases. For example, is almost 5 million Nonfarm Payrolls good or bad? Good! And if we take into account -21 million jobs a month earlier?

However, there is a small positive for the British pound. From July 10, restrictions on the entry of foreign citizens from more than 50 countries will be lifted in the UK. A little earlier, many quarantine measures were canceled or replaced with more lenient ones. This means that the British economy may begin to recover in the near future. It was decided to reopen restaurants and bars, and this week it is expected that a plan will be presented to open several other businesses, such as beauty salons or fitness centers. Also, the requirements for social distance have already been lowered, from two meters to one, but Boris Johnson said that if measures to prevent the second wave of the epidemic do not work, the authorities will be forced to re-introduce a full "lockdown". Many medical experts are already expecting a second wave of the epidemic, believing that the British will consider the quarantine completed and will not observe any security measures at all. In principle, many British media and periodicals have already called the opening day of pubs "super Saturday". According to forecasts, the Sun newspaper on this day, pubs could sell about 8.5 million liters of beer. Given the mentality of the British, for whom the pub is a second home, we can assume that the second wave of "coronavirus" may happen in the near future. After all, the British did not particularly zealously observe the quarantine and during its full operation, now the situation can only get worse.

Thus, the "coronavirus" continues to keep in fear, and at the slightest suspicion of a new outbreak of the epidemic, the UK authorities can begin to re-strengthen quarantine measures. On the first trading day of the week, the UK is scheduled to publish only the index of business activity in the construction sector, and in the US – the index of business activity in the service sector. We believe that both of these indicators are unlikely to have a serious impact on the mood of market participants. Thus, first of all, we still pay attention to technical factors. Overcoming the Murray level of "5/8" will allow traders to reconsider long positions, and the return of quotes below the moving average will change the current trend to a downward one.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 107 points per day. For the pound/dollar pair, this indicator is "high". On Monday, July 6, thus, we expect movement within the channel, limited by the levels of 1.2373 and 1.2587. Turning the Heiken Ashi indicator down will indicate a new round of downward correction.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

R3 – 1.2634

Trading recommendations:

The GBP/USD pair is fixed above the moving average on the 4-hour timeframe. Thus, today it is recommended to buy the pound/dollar pair with the goals of 1.2512 and 1.2573 and keep them open until the Heiken Ashi indicator turns down. It is recommended to sell the pair after the reverse consolidation of quotes below the moving average with the first goals of 1.2390 and 1.2329.

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Overview of the EUR/USD pair. July 6. Donald Trump will not leave the White House voluntarily. American experts talk about

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 23.8095

As we have already mentioned in articles over the weekend, the euro/dollar currency pair has been trading in a relatively narrow trading range in recent weeks, which can be called flat. At the moment, the pair is trading just below the moving average line, however, in flat conditions, this location does not have any special significance. Traders continue to ignore the macroeconomic background, and there have been few fundamental events in recent days or even weeks. We are even a little surprised by this fact since most of the interesting topics seem to be put on pause now. China and the United States have stopped verbal sparring, and Washington has stopped daily accusing Beijing and making unsubstantiated statements about the alleged evidence of its guilt in the spread of the COVID-2019 virus. Dr. Anthony Fauci, after a long pause, finally went on the air, only to say that the current incidence of coronavirus was "terrible". Meanwhile, there were 55,000 new cases recorded in the United States yesterday, which Donald Trump immediately explained with an already proven argument. "The number of coronavirus cases is growing because our testing is so massive and so good, much bigger and better than in any other country. This is great news, but the even better news is that deaths and death rates are declining," Trump wrote on Twitter. However, it does not matter to the economy why the number of cases of "coronavirus" is growing. Earlier, we wrote that in several states, public institutions and some places of potential congestion of large numbers of people have been closed again. The latest information related to the state of Florida, where a curfew was imposed. The state of Arkansas has made it mandatory to wear masks in all public places. Seven states reported a record number of new cases over the weekend. Thus, the economy may start to slow down again. After all, the economy is not only about industrial production and trade with other countries. The economy is also about ordinary people, ordinary citizens who go (or don't go) to work, visit (or don't visit) public institutions, cinemas, restaurants, sports clubs, and more. If the country's anti-disease records are updated daily, how many Americans will want to lead an active social life? Thus, even if the new lockdown is not introduced, even if the White House does not tighten the quarantine measures, it will not have a particularly positive impact on the economy, because most Americans will continue to avoid public places.

However, many periodicals and experts note that the November elections are now on the agenda for the American President. It seems that the original plan of Donald Trump has already failed. We believe that the American President wanted to restore the country's economy as quickly and fully as possible before November, to once again have excellent arguments in his favor before the voters. However, realizing the utopian nature of this idea, he seems to have abandoned it. It is unlikely that the US economy will recover to pre-crisis values in a few months. But Trump may try to use the "coronavirus" precisely to prevent his main rival, Joe Biden, from winning the election. In general, it seems that future elections will be the most absurd in the history of the United States. After all, the Governor of each state can impose or cancel quarantine restrictions. Thus, "foul play" may occur in many states. It may look something like this. There are so-called "contested states" - states that fluctuate between Biden and Trump. In such disputed states with Democratic governors, there may be restrictions on access to polling stations in those cities where Trump is most likely to win. And vice versa. That is, Biden and Trump may try to influence the election results by restricting voter access to those precincts where it is obvious that a competitor will win. Thus, "coronavirus" can now be used for political purposes. Easier scenarios are also possible. For example, there will be no direct restriction on access to polling stations, but in some places, there may be a new quarantine or a warning that there is a new outbreak, which will greatly reduce the desire of many Americans to leave their homes. It has also long been rumored that Donald Trump opposes voting by mail, believing that this way he will lose part of his electorate. Biden, however, seems to support this method of voting. But why? Because he doesn't want a mass gathering of Americans across the country or because he believes that Donald Trump is right? Also, there are fantastic options. Fantastic for any President other than Trump. For example, it is possible that "election fraud" may be declared after the vote has been counted. The President of the United States has the right to make such a statement and initiate an investigation. The investigation, which will be dragged out by the Republicans with all their might, can drag on for several months, as in the time of impeachment. Thus, until December 14 (the date when all states must appoint their representatives to the board), electors from "swing states" currently controlled by Republicans will not be approved. Accordingly, the Democrats may lose a certain part of the vote, and they will try to challenge this in the Supreme Court. But the Court can also redirect the case to the US Congress, where its Upper House is controlled by Republicans, who will block any attempts by Democrats to win the case. One thing is certain - Donald Trump will not leave the White House voluntarily, even if he loses the election.

On Monday, July 6, the European Union will publish the retail sales figure for May. This indicator is expected to decrease again, by 15% monthly and by 7.5% on an annual basis. In the United States, the service sector business activity indices for June according to Markit and ISM versions are scheduled for today, with forecasts of 46.7 and 49.5. However, given the fact that market participants continue to ignore most of the macroeconomic information, we believe that this data will have a very indirect impact on the course of trading. Plus, Monday trading can be boring and inactive in itself. Thus, we do not expect the flat to end tomorrow.

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The average volatility of the euro/dollar currency pair as of July 5 is 70 points and is characterized as "average", but in general, it continues to decline. We expect the pair to move between the levels of 1.1175 and 1.1315 today. A new turn of the Heiken Ashi indicator upward will signal a new round of upward movement so far within the side channel.

Nearest support levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading recommendations:

The EUR/USD pair continues to trade near the moving average line, inside the side channel. Thus, at this time, it is recommended to trade down if traders manage to overcome the level of 1.1175, which is the approximate lower limit of the channel, with the goals of 1.1108 and 1.0986. It is recommended to open buy orders not earlier than the Murray level "5/8"-1.1353 with a target of 1.1475.

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GBP/USD. Brexit talks failed again. Pound afloat against the dollar solely due to US events

4-hour timeframe

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In contrast to the EUR/USD pair, the British pound fell in price at the beginning and end of the trading week, and the rest of the time it grew quite strongly. A flat was not observed during the week. However, it is also impossible to say that there is a pronounced trend movement at the moment. If the downward trend persists at this time, it means that the correction in its composition is quite strong. For example, we are now witnessing one of these corrections, in which the pair has reached the upper line of the Ichimoku cloud and may even overcome it, which could become the starting point for a new upward trend. Meanwhile, in fundamental terms, the UK is completely calm. From time to time, market participants get confirmation that the negotiation process between Brussels and London is firmly in place, the parties are not going to make concessions and will only exchange mutual accusations, and that's all. This information clearly does not help the British currency, however, since everything is far from smooth over the ocean, the pound sterling still continues to stay afloat.

Last Tuesday, you could only pay attention to UK GDP for the first quarter, which declined more than expected by 1.7% in annual terms. And on Friday, the business activity index for the services sector was published, which only exceeded the forecast value by 0.1. The speech of the head of the Bank of England, Andrew Bailey, at the beginning of the week did not contain anything interesting. Prime Minister Boris Johnson also gave a speech, calling the coronavirus a disaster for the British community and economy. At the same time, Johnson believes that it is absolutely necessary to conduct a check and find out what went wrong in the confrontation with the COVID-2019 virus. The prime minister is appalled by the scale of the epidemic and the large number of victims of the virus. However, Johnson believes that the current situation is a chance to change the country for the better.

In general, nothing is changing in the UK, and the country is confidently moving towards economic collapse. Perhaps this is too loud a statement, but who could have guessed six months ago (when the coronavirus was already known) that this virus would lead to such economic consequences and have such a high death rate? But COVID-2019 has not disappeared. In fact, it was possible to stop the spread of this virus in European countries, including the UK. However, this does not mean that the virus is gone forever. A striking example of this is the United States, where even the first wave has not yet finished. Moreover, in many other countries around the world, where governments have relaxed or lifted quarantines, there are new outbreaks of infection. Thus, no one knows how many more lives the coronavirus will take, what measures governments around the world will have to take to stop future waves, and when a vaccine will be invented against this infection. It is a vaccine, not a cure. Because even though drugs exist, they can not cure everyone, and they can not stop the spread of infection at all. In addition to the serious consequences of the epidemic, the UK still has to deal with Brexit, and its negotiations fail from time to time.

In fact, the negotiations with Brussels is still the number one topic for the British pound. Just last year, Johnson triumphantly won the election, first in the election of prime minister, and then in the parliamentary elections, which made it possible for London to finally end the parliamentary wars over the divorce with the European Union. However, as the next six months showed, Johnson and his government could not achieve anything positive for the country. What is the point of the current version of Brexit, if it was exactly the same one that was proposed by Theresa May? That is, the current option is, in fact, a hard Brexit, which could have been implemented in 2016-2017, that is, without a three-year delay. It turns out that the main point in Johnson's victory and the Conservative party is that the policy of these diplomats do not suit the majority of the British people. The point is simply that the majority of British people wanted to finish the epic of leaving the EU as soon as possible. Which the Johnson government is now implementing. The UK will be facing the most serious financial losses on the horizon. By the end of 2020, Britain will lose at least 70 billion pounds due to the divorce itself in the EU, and from 2021 will begin to lose money due to quotas and duties that have begun to operate, according to the rules of the World Trade Organization. Well, the financial losses due to the epidemic and the coronavirus crisis are not even worth talking about now. In general, as we have said in recent years, rescuing the sinking British pound is the work of the US dollar.

The situation developed in the United States in 2020, which made it possible for both the euro and the pound to grow. The political crisis in America, the absurd policy of US President Donald Trump, his contradictory statements, failed to fight the epidemic, being the first in the world in the number of infections and deaths from the coronavirus, the constant wars with the Democrats, impeachment proceedings, a trade war with China, the book of the former national security adviser John Bolton, who reveals many aspects of Trump, and the racist scandal, which has led to several weeks of rallies and protests across the country, and in which Trump once again showed himself not at its best, all this could be the reasons why the US currency has ceased to become more expensive in the long term. Therefore, this entire year could turn out to be quite balanced for both the British pound and the US dollar. From our point of view, the future will solely depend on whether Trump is re-elected for a second term or not.

Trading recommendations:

The pound/dollar pair started an upward movement on the 4-hour timeframe. Thus, you are advised to consider long positions with targets of 1.2587 and 1.2624. You are also advised to return to sell orders, but not before you pin the pair below the critical line with the first targets of 1.2250 and 1.2168. All goals will be reviewed on Monday.

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