Technical Analysis of GBP/USD for July 8, 2020:

Technical Market Outlook:

The GBP/USD bulls has almost hit the next target which was 61% Fibonacci retracement located at the level of 1.2597. After a underachieved rally, the market is now consolidating in a narrow range. 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. The momentum is starting to decrease and the market is coming off the overbought levels.

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 GBP/USD on July 8, 2020

In general, the pound recalls Brexit if nothing happens in the market. Although throughout yesterday, the pound was growing not only because of the expectation of the next statements on this issue. Macroeconomic statistics slightly helped. Another thing is that usually no one looks at this data at all. So, yes, the main driving force was Brexit. Moreover, yesterday there was an informal meeting of negotiators from both sides, about which they even began to joke around. They say that a couple of weeks ago, rumors leaked that Brussels is allegedly ready to make concessions on such an extremely important issue as fishing, and the meeting was held in the form of a dinner at which fish dishes were served. And the English press thinks it's very funny. In short, market participants were waiting for some more loud statements about the next breakthroughs and that the agreement will be signed any day. That's what everyone's been talking about for the past few weeks. However, it would be better not to comment, because British Prime Minister Boris Johnson said that the UK is ready to leave the European Union without a trade agreement. In other words, the prime minister of the United Kingdom has literally crossed out everything that has been said and done for at least the past month with a single phrase. Maybe even a couple of years. And most importantly, many investors now feel like complete fools, because their optimism about the pound was based on the fact that London and Brussels finally agreed on something and will be able to avoid the fact that events will develop in the worst-case scenario. But so far, this has only led to the fact that the pound has once again stood still. Investors need to make sense of what is happening.

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If we look at the statistics, it can be pleasing. According to Halifax, the rate of house price growth in the UK slowed from 2.6% to 2.5%. The good news is that it was forecast to slow down to 2.0%. Well, the most important thing in this news is that these data have almost no effect on the market. Halifax data does not cover the entire housing market, but only part of it. So it is not possible to draw conclusions about the state of the real estate market in the United Kingdom from these data.

Halifax house price index (United Kingdom):

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The JOLTS data on the number of open vacancies in the United States is in about the same position now. After all, the content of the latest report of the United States Department of Labor is such that all indirect data on this very labor market and want to be interpreted exclusively in a positive way. It is not clear what we could do with them. So this time, it is unclear how we should perceive the growth in the number of open vacancies from 4,996,000 to 5,397,000. On the one hand, this may be due to the fact that employers are beginning to gradually recover from the long stagnation they were in due to restrictive measures in the case of the coronavirus epidemic, and are actively looking for additional employees. On the other hand, this may be due to the fact that employers, seeing what a mess is going on in the labor market and how many unemployed people are now divorced, decided to lay off some employees in order to recruit new ones, but with lower salaries. In general, it is not clear exactly how we should treat this data. And to be fair, it should be noted that the market ignored these data as well.

Number of open vacancies JOLTS (United States):

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The macroeconomic calendar is completely empty today, so market participants can only comprehend Johnson's words regarding the trade deal with the European Union. His words clearly did not please anyone. So the prospects for the pound's growth look extremely vague.

In terms of technical analysis, we see a rapid upward move, which led to the breakout of the upper limit of the variable flat of 1.2440/1.2530, as a result of which the quote reached the value of 1.2590. Market participants did not succeed in holding new highs, and immediately a pullback emerged in the direction of the previously passed border.

With respect to volatility, a high speculative interest is recorded, on the basis of which local jumps in the market arise.

Looking at the trading chart in general terms, the daily period, you can see that the high activity in the market did not affect the overall dynamics, which has been keeping the quote in the side band for more than two months.

It can be assumed that if the price is pinned below 1.2530, another downward spiral of short positions will open, which will return the quote to the values of 1.2500-1.2480.

An alternative scenario considers a variable oscillation within the values of 1.2530/1.2600.

From the point of view of a complex indicator analysis, it can be seen that the indicators of technical instruments on hourly and daily periods signal a purchase due to a surge in activity during the past day. If the price is consolidated below 1.2530, the indicators on the minute and hour intervals will indicate a sell signal.

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Technical Analysis of ETH/USD for July 8, 2020:

Crypto Industry News:

Willie Breedt, a South African citizen accused of stealing up to $ 16.3 million from around 2,000 investors through his VaultAge Solutions program, was allegedly forced into bankruptcy by a local court. According to a recent media report, the whole situation was initiated on 3 July by Simon Dix - one of the largest VaultAge investors who entrusted Breedt with 7.5 million South African rand, or $ 440,000.

VaultAge Solutions was founded in 2018, promising weekly returns on customer deposits through mining and trading cryptocurrencies. Program investors allegedly received only 1% of the expected profits. Before hiding about two weeks ago, the VaultAge operator initiated an intimidation case. A group of bailiffs hired by angry investors tracked him down at a guest house at Silver Lakes Estate in Pretoria, which he had reserved under a false name. Previous reports suggested that CEO VaultAge fled the country to Mozambique in December 2019.

Shortly after the sequestration order was issued, the Directorate for Investigating Priority Crimes, South Africa, known as "Hawks," raided the guest house, confiscating a laptop and Ledger Nano wallet, which could potentially contain some of the missing funds. In addition, the South African reserve bank has appointed PwC to investigate VaultAge and all agents who may have carried out transactions on its behalf.

Technical Market Outlook:

The ETH/USD has made the Bearish Engulfing pattern has been made at the top of the move up and the market reversed lower towards the level of $233.88. Any violation of this level will open the road towards the support seen at $232.20 or below. Please notice, there is another Pin Bar candle made at the top of the recent rally as well. The levels of $235.42 and $232.20 will now act as a local technical support for the price. On the other hand, the next target for bulls is seen at the level of $243.71 and $248.86.

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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Technical Analysis of BTC/USD for July 8, 2020:

Crypto Industry News:

For several weeks, Bitcoin miners have been holding more and more while the price is above $ 9,000. Meanwhile, Bitcoin mining may become more difficult within a week.

It seems that at a time when more Bitcoin miners were turning on their machines, increasing hashrate or network computing power, they are also holding more newly generated coins. Their net inventory over the past five weeks has reached 344 BTC ($ 3.2 million). By comparison, almost three weeks ago, on June 16, the same "collection" was 27 Bitcoins.

Consequently, the five-week MRI fell from 99.56% to 94.88%. If this indicator is below 100%, miners keep more Bitcoins and increase their inventories, and above 100% means they spend more.

Meanwhile, it is estimated that the difficulty of Bitcoin mining, which is a measure showing how difficult it is to compete for mining prizes, will increase again in seven days during the next difficulty correction, according to the top Bitcoin BTC.com mining pool. If estimates become a reality, they will raise the rate by 6% to 16.74 T - a new record of all time.

The difficulty exceeded 16 T previously only twice: 16.10 T in May and 16.55 T in March this year. This would not only be a new record, but would bring it closer to the never before reached 17 T. However, these estimates are likely to change as the adjustment date approaches. Bitcoin mining difficulty is adjusted every two weeks (more specifically every 2016 blocks) to maintain a normal 10-minute blocking time.

Technical Market Outlook:

After the BTC/USD pair has retraced over 50% of the last wave down and made a local high at the level of $9,329 the momentum has decreased and Bitcoin has stuck in a narrow range. Only a sustained breakout above the $9,400 would put the bulls back in control over the market again. This level is very close to the 61% Fibonacci retracement located at the level of $9,375, so breakout will require a lot of momentum, which for now is strong and positive. The local technical support is seen at the level of $9,240 and $9,154.

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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Elliott wave analysis of EUR/GBP for July 8, 2020

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EUR/GBP broke below short-term important support at 0.9000. It may dip to 0.8946 before the next rally to the short-term important resistance at 0.9068 which confirms renewed upside pressure.

The break below short-term key support at 0.9000 indicates a temporary bearish count. This count calls for a continuation lower to 0.8347 before the decline from 0.9500 finally is completed and a new bullish rally can take place.

For now, we will stick to a bullish scenario. However, a break below 0.8864 will change the preferred count to the bearish count.

R3: 0.9176

R2: 0.9120

R1: 0.9068

Pivot: 0.9000

S1: 0.8946

S2: 0.8912

S3: 0.8864

Trading recommendation:

Our stop at 0.8985 was hit for a nice 225 pips profit. We will buy EUR again at 0.8946 or upon a break above 0.9068. If we get our buy order at 0.8946 filled we will place our stop at 0.8860.

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Elliott wave analysis of GBP/JPY for July 8, 2020

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GBP/JPY continues to push higher. If it breaks above resistance at 134.59, it should act as support for the next impulsive rally towards the next minor target at 136.35. In the longer term, we are looking for GBP/JPY to rally back to the 139.74 peak.

If support at 134.59 is broken, strong back-up support is seen at 133.90, which is able to protect the downside. If not, we will have to review our bullish outlook.

R3: 136.35

R2: 135.90

R1: 135.37

Pivot: 135.00

S1: 134.59

S2: 134.23

S3: 133.90

Trading recommendation:

We are long GBP from 132.85 and we will raise our stop to 133.85.

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Litecoin to test 45.98 level, July 08, 2020

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There is a hidden divergence on the 4-hour chart between the Litecoin price with the Stochastic Oscillator. From this technical point of view, Litecoin has a chance to test the 45.98 level and if the bullish momentum is strong enough then 46.88 will be the next target. This scenario will be canceled if Litecoin drops and closes bellow the 42.77 level.

(Disclaimer)

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GBP/USD: plan for the European session on July 8 (analysis of yesterday's trade). Pound to continue growing with good news

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

Yesterday's news that an informal meeting of Brexit negotiators is taking place in the UK provided significant support to the pound, as it clearly indicates the parties' interest in concluding a deal. If you look at the 5-minute chart and remember my forecast yesterday afternoon, you will see how it was possible to play on the side of both buyers and sellers. I spoke about consolidating the pair at 1.2516 and forming a signal to enter long positions at the beginning of the US session, which allowed us to take about 70 points from the market. But I think you also remember the 1.2585 resistance, where I advised you to open short positions immediately on the rebound, which allowed you to pull another 30-40 points from the market. At the moment, buyers of the pound should break through and consolidate above the resistance of 1.2585, but this will happen only after the speech of the British finance minister on the topic of supporting the country's economy. A breakout of 1.2585 will open a direct path for GBP/USD to the highs of 1.2676 and 1.2803, where I advised taking profits, and will also maintain the bullish trend formed on July 1. Also, a good entry point into long positions will be to form a false breakout in the support area of 1.2526, where the moving averages also pass. If there is no activity there, it is best to wait for an update of a larger low of 1.2464 and buy the pound there for a rebound, counting on a correction of 30-40 points within the day. You also need to remember that the Commitment of Traders (COT) report for June 30 recorded another increase in short and long positions, which indicates a confrontation between buyers and sellers. The latter needs to be more active in order to return the wounds to their side. The COT report indicates that short non-commercial positions increased from the level of 48,170 to the level of 55,414 during the week. Long non-commercial positions rose from the level of 29,654 to the level of 34,424 during this time. As a result, the non-commercial net position increased its negative value to -20,990, against -18,516.

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

Sellers of the pound need to keep protecting the resistance area of 1.2585, its breakout will lead to a new bullish momentum. Forming a false breakout in the area of 1.2585 will signal the opening of short positions, but this will only happen if the UK finance minister announces negative forecasts in today's speech. Other fundamental statistics will not be published today. A more important task for sellers of GBP/USD is to return and consolidate under the level of 1.2526, which also forms a signal to sell the pound and will lead to its decline to the area of the low of 1.2464, where I recommend taking profits, since it is not possible to go below this range the first time. The low of 1.2386 is still the bears' long-term goal, which they will only be able to reach if the upward trend breaks. In case GBP/USD grows further, you should only look at short positions after updating the high of 1.2676, counting on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is conducted above the 30 and 50 moving averages, which indicates that the pound will continue to grow in the short term.

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

A break in the upper limit of the indicator around 1.2585 will lead to a larger increase in the pound. A break in the lower border of the indicator at 1.2500 will increase the pressure on the pair.

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

Trading plan for EUR/USD for July 08, 2020

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Technical outlook:

EUR/USD has held below 1.1340/45 highs and is seen to be trading around 1.1266 levels at this point in writing. The single currency pair is expected to print yet another low below 1.1258 before pulling back. Please note, any intraday rallies thereafter would remain well capped below 1.1340/45, going further. Immediate resistance is seen towards 1.1340/45, followed by 1.1420, while interim support is seen at 1.1167 respectively. EUR/USD is seen to be targeting 1.1010 in the immediate short term, while the next potential target is 1.0775. Trading point of view, EUR/USD remains a good candidate to be sold on rallies with risk above 1.1420.

Trading plan:

Remain short, stop @ 1.1420, target @ 1.1010 and 1.0775

Good luck!

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EUR/USD: plan for the European session on July 8 (analysis of yesterday's trade). Euro buyers try to maintain a bullish trend.

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

Buyers of the euro made another attempt to keep the upward trend on their side and were active at 1.1272 yesterday, from which I advised you to open long positions in my forecast for the afternoon. If you look at the 5-minute chart, you will see how the next fall to the level of 1.1272, after the bulls' unsuccessful attempt to go above the resistance of 1.1313, led to an upward movement of EUR/USD, but it was not possible to achieve support from major players, as a result, the pair returned to the area of 1.1272 in the Asian session. At the moment, the bulls should protect the support of 1.1267, since its breakout will lead to a reversal of the upward trend that was formed on July 1. I advise opening long positions from this range only after a false breakout has been formed. Given the fact that important data is not published today, it is likely that the euro will continue to remain under pressure against the background of yesterday's reports on Germany and the forecasts of the European Commission. When the support breaks 1.1267, it is best to wait for an update of the new low of 1.1233 and open long positions from it immediately for a rebound, counting on a correction of 20-25 points within the day. Larger bulls will prefer to wait until the 1.1233 area has been updated. Let me remind you that the Commitment of Traders (COT) reports for June 30 recorded an increase in short positions and a sharp reduction in long ones. This indicates that market participants are taking a more cautious approach to the euro last week, as well as the lack of people willing to buy the euro when it grows at higher prices. The report shows an increase in short non-commercial positions from the level of 72,368 to the level of 81,432, while long non-commercial positions decreased from the level of 190,816 to the level of 180,387. As a result, the positive non-commercial net position decreased to 98,955, against 118,448, which indicates a slowdown in the growth of interest in purchasing risky assets at current prices.

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To open short positions on EUR/USD you need:

The task of sellers of the European currency is to break through and consolidate below the support of 1.1267, which the bulls are so actively protecting. A break of this level will lead to forming a new downtrend, which can bring the European currency to a low of 1.1233, and also lead to an update of the support of 1.1193, where I recommend taking profits. The gloomy forecasts of the European Commission, which could be found yesterday, quickly discouraged euro buyers from being active at weekly highs. Another good point for entering short positions is when a false breakout forms in the resistance area of 1.1305. I recommend selling EUR/USD immediately for a rebound after updating the weekly high in the area of 1.1345, counting on a correction of 20-25 points within the day.

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Indicator signals:

Moving averages

Trading is conducted below 30 and 50 moving averages, which creates a number of problems for buyers of the European currency.

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

A break in the lower border of the indicator around 1.1260 will lead to increased pressure on the European currency. Bullish momentum will be limited by the upper level of the indicator in the area of 1.1300.

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

USDCAD reversing off 1st resistance, more downside!

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Trading Recommendation

Entry: 1.3611

Reason for Entry: Horizontal swing high

Take Profit :1.3560

Reason for Take Profit: The horizontal overlap support

Stop Loss:1.3650

Reason for Stop loss: Horizontal overlap resistance

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Forecast for EUR/USD on July 8, 2020

EUR/USD

The euro continued to grow on Tuesday, having previously tested support for the target level of 1.1265 from above. As yesterday, the price is developing above the balance and MACD indicator lines on the daily chart, but the Marlin oscillator has not been able to move into the positive (growing) trend zone.

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The euro's growth is risky not only due to the observed excessive risk appetites, but also from a technical aspect – the euro increasing towards the target levels of 1.1420 and 1.1465 will form a reversal divergence on the Marlin oscillator, followed by a medium-term decline.

The growing scenario is already at risk of failure. The Marlin signal line turned from the border of the growth territory. Consolidating the price at 1.1265 can reset the price to the lower support of 1.195, which will automatically move the price under the balance line, and this is already a shift in the interests of players to further pull down the euro and overcome 1.195, opening the way to 1.1100.

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The euro's reversal from yesterday (the low of the day) occurred from the balance line on the four-hour chart and synchronously with this, the signal line of the Marlin oscillator turned from the border with the territory of the downward movement up. At the moment, the Marlin line shows the intention to turn around from this border. Consolidating the price under the support of 1.1265, of course, will force the Marlin to gain a foothold under its own border in the negative trend zone.

So, a rise in the price above 1.1300 will allow the price to continue growing to 1.1420, a consolidation under 1.1265 opens the way to a fall to 1.195.

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Forecast for GBP/USD on July 8, 2020

GBP/USD

The pound successfully overcame the resistance of the 123.6% Fibonacci level at 1.2540 yesterday. The Marlin oscillator has invaded growth territory on the daily chart. The price is directly held by the balance indicator line. Now the nearest target of the pound is the Fibonacci level of 110.0% at the price of 1.2645. Overcoming this level opens the second target for the Fibonacci level of 100.0% (February 28 low) at the price of 1.2725.

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The price was pinned above the Fibonacci level of 123.6% on the four-hour chart, the signal line of the Marlin oscillator turned up from the border of the negative trend zone – the market is set to grow further.

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The following circumstance can prevent growth – a divergence with the price is formed on the Marlin, and the signal line leaving to the negative zone will finally form it. In this case, we expect the pound to fall to support the MACD line (1.2400), just below the Fibonacci level of 138.2%. In turn, pinning the price below the Fibonacci level of 138.2% will indicate the intention to overcome the support of the indicator line and move deeper down to the Fibonacci level of 161.8%, in the area of the MACD line on the daily chart.

It is possible for growth to resume after overcoming yesterday's high of 1.2591.

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Forecast for AUD/USD on July 8, 2020

AUD/USD

The Australian dollar fell by 70 points yesterday in the morning due to the introduction of a re-quarantine in Melbourne due to the onset of the second wave of coronavirus infection. However, investors were so keen on beating the US dollar that, despite the fall in the stock market (Euro Stoxx 50 -0.85%, S&P 500 -1.08%), the main currencies returned to growth, including the Australian dollar. It wasn't until late in the evening that the bears took over. As a result, the aussie fell by 26 points. The Reserve Bank of Australia meeting, being neutral on the results, did not affect the exchange rate.

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The signal line of the Marlin oscillator lies on the border of the negative trend zone on the daily chart, the 1.7080 target (July 19 high) can be reached within the next day. Next, we expect growth to continue in the target range of 0.7190-0.7225, since it is very likely that the price and the Marlin oscillator are preparing to form a triple divergence, and the distance between the oscillator and the forming line is still significant.

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The price found support on the balance line on the four-hour chart, which indicates that the trend is under strict control of buyers. The Marlin oscillator fluctuates at the border of trends. In general, the 0.6923/79 range, determined by the local extremes of yesterday, is an area of uncertainty. The exit of the price above its upper limit will give the price the opportunity to continue growing to 0.7080, leaving the price below 0.6923 will allow you to test the strength of the MACD line in the area of 0.6892. Consolidating at 0.6892 will reveal the market scenario for a decline to 0.6680.

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Forecast for USD/JPY on July 8, 2020

USD/JPY

Our comment from yesterday about how it is difficult for the USD/JPY pair to grow due to significant technical resistance was realized as the price re-tested the target level of 107.77 and a quick subsequent pullback from it. But the daily candle remained white and once again the price attacked an unstable level this morning. Success will make it possible for the price to develop an offensive to the next target of 108.38. A sign of this success is the opening of today's session above the balance indicator line. The Marlin oscillator is in the growth zone.

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The price is trying to go above the balance line on the four-hour chart, Marlin is in a growing position.

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An alternative scenario assumes that the price will fall under the MACD line (107.30) followed by an attack of strong support on the daily scale of 107.07. The first sign of price development in this scenario will be its decline to the nearest extreme of 107.51.

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CADJPY coming close to descending trendline resistance! Drop incoming!

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Trading Recommendation

Entry: 79.260

Reason for Entry: Moving average resistance, 61.8% Fibonacci retracement, descending trendline resistance

Take Profit: 78.883

Reason for Take Profit: -27% Fibonacci retracement, 100% Fibonacci extension

Stop Loss: 79.424

Reason for Stop Loss: Recent swing high

The material has been provided by InstaForex Company - www.instaforex.com

CADJPY coming close to descending trendline resistance! Drop incoming!

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Trading Recommendation

Entry: 79.260

Reason for Entry: Moving average resistance, 61.8% Fibonacci retracement, descending trendline resistance

Take Profit: 78.883

Reason for Take Profit: -27% Fibonacci retracement, 100% Fibonacci extension

Stop Loss: 79.424

Reason for Stop Loss: Recent swing high

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EUR/USD. European Commission report disappointed, but bears could not take advantage of the situation

The euro-dollar pair retreated from its local highs today, plunging to the middle of the 12th figure. The downward correction was primarily due to the weakening of the euro-traders, who reacted negatively to the updated forecast of the European Commission, which was more pessimistic than the spring version. However, the corrective decline was temporary: bears could not pick up the banner and impulsively pull down the price to the support level of 1.1260 (the average line of the Bollinger Bands indicator coincides with the Tenkan-sen and Kijun-sen lines), although some pressure is still maintained on the pair. There is a positional struggle between buyers and sellers: according to its results, the price will either gain a foothold in the area of the 13th figure, or return to the area of the 11th price level.

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On the one hand, the European Commission report was really disappointing: according to updated forecasts, the eurozone economy will contract by almost nine percent this year (8.7%), and, accordingly, will grow by 6.1% next year. The forecast was revised downward relative to the spring estimates. At that time, Brussels predicted a 7.7% decline in the European economy. But as Europe left the quarantine "at a slower pace than previously thought," EC economists revised their previous estimates. If we talk about specific countries, France, Italy and Spain are among the most affected. There, the volume of GDP in 2020 will be reduced by more than 10%. But the European Commission has not changed its forecast for Germany: the German economy should contract by 6.3% (the forecast was at the level of -6.5% back in May). It is noteworthy that according to EC experts, the Polish economy will experience the smallest recession in the European Union (-4.6%) this year. According to the report, the Polish economy has demonstrated relative stress tolerance due to the low level of impact on the affected sectors and a "diversified economic structure".

As for the inflation outlook, weak dynamics are also expected. Despite the growth of the oil market and rising food prices, the impact of these factors on the overall inflation rate will be offset by weak economic growth and low consumer activity.

The euro-dollar pair plunged to the middle of the 12th figure after the disappointing report was released. But the weak position of the US currency prevented the bears from developing a downward momentum. Sellers gave up after several attempts to storm the support level of 1.1260. This was partly facilitated by Isabel Schnabel, a member of the European Central Bank's Executive Board. According to her, the latest macroeconomic reports "were very positive", and this, in her opinion, indicates that the coronavirus crisis may be less destructive, and the recession is not as deep as previously assumed. She also clarified that "the main scenario for the development of the situation" is currently being implemented in Europe. This rhetoric sharply contrasted with the published forecast of the European Commission. Therefore, the euro-dollar pair is stuck in place following sharp price fluctuations, waiting for the next information.

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Meanwhile, the greenback shows a downward trend throughout the market: the dollar index has returned to the area of 96 points, reflecting a decline in demand. To one extent or another, the US currency has weakened in almost all key pairs (to one degree or another). Despite US President Donald Trump's reassuring admonitions about reducing deaths from COVID-19 in the US, traders remain concerned about the rate of spread of the coronavirus in the country. The daily growth rate of infected people is stable above 40,000, and has been above 45,000 new cases since June 30. The dynamics are clearly upward, so the dollar is under background pressure. On the one hand, the White House clearly does not intend to close the country to quarantine, but on the other hand, state authorities can tighten (and are already tightening) restrictive measures at the local level.

This ambiguous fundamental background determines the flat movement of the EUR/USD pair. Given the fact that the economic calendar is almost empty on Wednesday, American doctors will be the main newsmakers of the currency market – the greenback will show weakness if the growth rate of the number of infected exceeds the 50,000 mark again, allowing the bulls to seize the initiative.

From the technical point of view, buyers still manage to stay above the support level of 1.1260 - the average line of the Bollinger Bands indicator on the daily chart, which coincides with the Tenkan-sen and Kijun-sen lines. In turn, the Ichimoku indicator shows a bullish Parade of Lines signal. All this indicates the priority of longs to the first resistance level of 1.1360 – this is the upper line of Bollinger Bands on the same timeframe. This scenario has almost been realized today – the pair has risen to the level of 1.1332. The situation has not technically changed at the moment: buyers can still prove themselves by testing the above resistance level.

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Hot forecast and trading signals for the GBP/USD pair on July 8. COT report. Buyers taking advantage of the opportunities

GBP/USD 1H

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The GBP/USD currency pair, in contrast to EUR/USD, was trading higher on Tuesday, traders managed to reach the resistance level of 1.2589, and also overcome the level of 1.2530, from which the quotes rebounded three times earlier. At the moment, the pound/dollar pair is being corrected, but a new upward trend is emerging. Since there are no trend lines or ascending channel at the moment, visually buyers may not have a clear advantage in the market. However, they are now supported by the Kijun-sen line, we do not expect the pair to be below it in the coming days. Despite the fact that the fundamental background from Britain is not too favorable, the pound continues to be in demand against the US dollar.

GBP/USD 15M

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Both linear regression channels continue to be directed upwards on a 15-minute timeframe, so the overall trend remains upward in the short term. There are no signs of the beginning of correction at the moment.

The COT report

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The latest COT report, which covers the dates of June 24-30, shows that major traders actively traded the pound at this time. If the major market participants mainly reduced contracts for the euro, they increased contracts for the pound. Professional market participants increased the number of contracts for purchase by 4,000,and 8,400 for sale. Thus, the net position decreased by 4,400 contracts only in the non-commercial category. It is logical for the pound to become cheaper during this period of time. The commercial group, which does not set goals to make a profit through currency operations, naturally bought the pound to a greater extent. Since if someone sells currency, then who buys it. The total net position for the pound increased during the reporting week (18,000-15,000 = +3,000). The pound sterling grew after the report expired, so we can assume that professional market participants are already looking in the direction of buying the British currency.

The fundamental background for the GBP/USD pair was completely absent on Tuesday. From time to time, news is received regarding negotiations between London and Brussels on a free trade agreement, but they are not being promoted. It's just that there are constant reports that a new round of negotiations has begun, a new round of talks has ended, British Prime Minister Boris Johnson is personally going to negotiate, the meeting with EU leaders has been rescheduled, and that's all, no progress. Thus, we cannot conclude that the pound began to strengthen on Tuesday on the basis of some optimism regarding this topic. Most likely, the pound resumed growth on the basis of technical reasons, successfully breaking the level of 1.2530, which hindered buyers from going up before that. Nothing is changing for the better in the United States, therefore, the high risk of a new quarantine or just a serious blow to the economy as a result of the coronavirus outbreak may force investors to turn their backs on the dollar. Industrial production can continue to work and recover, but ordinary Americans cannot be forced to show economic activity at the level as if everything was fine. Thus, while a new outbreak of COVID-2019 is raging in the country, the US currency may continue to remain under pressure.

There are two main scenarios as of July 8:

1) The upward movement has more prospects now since the resistance level of 1.2530 was passed. Thus, we recommend buying the pair while aiming for the resistance level of 1.2698, if the bears do not lose the initiative in the near future and do not fall below the Kijun-sen line. For more confidence, we recommend waiting until the first target of 1.2589 is reached. The potential Take Profit in this case will be about 100 points.

2) Sellers are advised to wait until the pair consolidates below the support area of 1.2404-1.2424, and at the same time, the Kijun-sen and Senkou Span B lines. In this case, the downward trend will again take place, and the first targets for sell orders will be 1.2311 and the support area of 1.2196–1.2216. Potential Take Profit in this case will be from 70 to 170 points.

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Hot forecast and trading signals for the EUR/USD pair on July 8. COT report. Buyers and sellers currently do not dominate

EUR/USD 1H

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The EUR/USD pair continued its downward movement on the hourly timeframe on July 7 after it reached the resistance area of 1.1326–1.1342 for the third time. The pair fell to the important Senkou Span B line, then rebounded from it, rose to the resistance level of 1.1304 and began to fall again since it failed to overcome it. Thus, we conclude that buyers still do not have enough strength to develop their own success. Bears still can not boast of anything, but in general, there is a sideways movement, which is most clearly visible on the higher timeframes. Thus, between the areas of 1.1326–1.1342 and 1.1227–1.1243, we do not recommend trading at all, since there is no trend in this area, and neither bulls nor bears have advantages.

EUR/USD 15M.

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The lower channel of linear regression turned down on the 15-minute timeframe, signaling the beginning of a correction. This is exactly what happens on the hourly chart, as traders failed to overcome 1.1326–1.1342.

The COT report

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The new COT report, which was released on Monday, showed that professional traders were busy closing buy contracts and opening sell contracts during the reporting week (June 24 – 30). It is interesting that the European currency fell in price during this period of time, but not too much, not by -17,000 contracts in the net position. At the same time, from a technical point of view, the euro/dollar pair is now in a flat, which is clearly visible on the 4-hour timeframe and higher. Therefore, we cannot conclude that major market participants have completely abandoned euro purchases. It should also be noted that market participants who hedge their risks, closed contracts for sale with the same zeal in the reporting week, thus slightly offsetting the actions of speculators. In total, 8,500 Buy-contracts and 3,000 Sell-contracts were closed. Thus, almost in any case, the euro should have fallen in price during the reporting week. But the future prospects of the euro are difficult to track on the COT report. All recent changes have not been trending.

The overall fundamental background for the EUR/USD pair did not change again on Tuesday. The European currency has been trading lower for most of the day, but at the same time there is no talk of forming a new downward trend yet. There was bad news for the euro. The European Commission updated its March forecasts for economic growth in the eurozone in 2020-2021, and they were worse than the previous ones. In addition, if a free trade agreement with London is not reached, the current forecasts (-8.7% of GDP) will be revised for the worse. On the other hand, mostly negative information is being received from overseas as well. In most cases, it concerns either the coronavirus or US President Donald Trump. All information regarding Trump has little effect on the current movement of the pair and the mood of traders. But daily news about new tens of thousands of Americans infected with COVID-2019 may not allow the US dollar to resume growth. However, we have already said that the European economy and the euro have a certain advantage over the US economy and the dollar in the current conditions. The only question is whether traders have fully worked out this advantage or are we waiting for another round of strengthening of the euro?

Based on all of the above, we have two trading ideas for July 8:

1) Buyers reached the area of 1.1326-1.1342 for the third time in the last month and have also failed to gain a foothold higher for the third time. Thus, we advise you to buy the euro but not before you have overcome this area with the goals of resistance levels 1.1362 and 1.1422. Potential Take Profit is up to 80 points.

2) The bears show a certain desire to return to the game, but so far their initiative is clearly not enough. The pair performed, as we expected, falling to the two strong lines of the Ichimoku indicator - Senkou Span B (1.1258) and Kijun-sen (1.1278). However, we are still waiting for the 1.1226 – 1.1242 support area to be overcome, and after that we advise you to open short positions with the goals of 1.1186 and 1.1126. The potential Take Profit in this case is from 35 to 95 points.

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Overview of the GBP/USD pair. July 8. "Trump is part of a coronavirus disaster." The European Commission lowered its forecasts

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: 179.4777

The British pound resumed a strong upward movement in the second half of the past day and overcame the Murray level of "5/8"-1.2512, which we called key for the prospects of the British currency. Thus, the bulls showed their best side, in contrast to the bulls on the euro/dollar pair. We just need to figure out what caused the sharp increase in demand for the British pound on Tuesday, July 7. After all, in recent days, only negative news has been coming from the UK, mainly concerning negotiations on a free trade agreement. At the end of last week, negotiations again failed, top EU officials again condemned London, saying that Britain does not want to sign a compromise agreement, and the EU is not going to sign it "at any cost." A little later, the representative of the European Commission Paolo Gentiloni warned the UK and the EU that if an agreement is not reached, it will be an additional blow to both the European and British economy. Current, far from optimistic forecasts for 2020 and 2021 implies that a trade agreement will be concluded. If not, the EU's GDP may be much weaker in 2021 than the 5% expected now. Thus, the British pound has nothing to be happy about. However, the reasons for the strengthening of the pound should be found in Britain, since the euro currency has not risen in price in pair with the dollar.

Let's return to the Brexit negotiations, which unexpectedly resumed in London today. According to most experts, the current probability of reaching an agreement between London and Brussels does not exceed 10%. And this value, which is already low, falls as the end date of the "transition period" approaches. Both chief negotiators reiterated that "the parties are too far from understanding", as well as "significant differences in positions". German Chancellor Angela Merkel said that all 27 EU countries should prepare for a no-deal Brexit. Well, Boris Johnson continues to assure that the agreement, which took 7-8 years with other countries, can be reached in about a month. By the end of July, the British Prime Minister is going to agree on everything with Brussels. How this is possible is clear only to Boris Johnson. Meanwhile, British businesses that are experiencing serious problems due to the "coronavirus crisis" are calling on the British government to let them know as soon as possible whether there will be an agreement with the EU or whether it is time to launch emergency action plans in case of emergencies. UK businesses have suffered from a lack of understanding between London and Brussels in the past few years, with some companies moving their offices and factories outside of the Foggy Albion, however, there was still hope that the parties would agree. Now, only ardent optimists can believe in reaching an agreement between Brussels and London. The key differences remain the issues of competition between British and European companies, the judicial issue, the issue of fishing in British waters by European sailors, as well as the issue of compliance with European norms and standards. Thus, there was no positive news for the British pound.

Moreover, the European Commission lowered its forecasts for UK GDP for 2020. According to the European Commission, the British economy will shrink by 9.7% in 2020, and not by 8.3%, as expected in March. According to the calculations of the European Commission, in the second quarter of 2020, British GDP lost 18.2%, which is more than that of any EU country. The forecast of economic growth for the UK for 2021 remained unchanged and is +6%, but only if a free trade agreement is concluded with the European Union. Otherwise, the recovery of the British economy will be slower and weaker. "The recovery in company investment is expected to be slower due to the pressure on balance sheets as a result of the COVID-19 pandemic and uncertainty around the future trade relationship between the EU and the UK," the European Commission said in a report. Also, the European Commission believes that even if the agreement is concluded, it will not be as profitable for both sides as it is now. This means that this will lead to negative consequences that will be more pronounced for Britain than for the European Union, the report says.

As we said in earlier articles, Donald Trump is now mercilessly criticized by half of America and it will be difficult for him to win the election. Many officials, who are known throughout America, openly blame the American President for the fact that COVID-2019 infected about 3 million Americans and 130 thousand deaths. New York mayor Andrew Cuomo openly stated that the US leader contributes to the spread of the "coronavirus". Cuomo recalled that it was Trump who at the beginning of the epidemic repeatedly stated that "in 99% of cases, the virus does not carry any danger", and that "it will not live even until the summer". According to Cuomo, this led to the fact that the Americans did not observe the quarantine. The mayor of New York said that "Donald Trump is part of the disaster that we are in".

Trump's political ratings are also bad. According to the latest polls, Joe Biden's advantage remains at around 10%. It is noted that the research was conducted by both Democrats and Republicans and gave approximately the same results. It is especially important that "wavering states" like Wisconsin, Arizona, and Florida, which in 2016 secured a victory for Trump, this time intend to vote for Biden. Many political analysts also note the fact that in some ways, Trump was just unlucky. Many Americans who do not support Trump have nothing personal against him, however, they are opposed to events related to the US President. And this is the trade war with China, "coronavirus", racial protests and rallies, high unemployment, and so on. However, political analysts also advise not to write off Trump ahead of time from the accounts. Many believe that the situation may still change before November. Experts believe that one of the main advantages of Trump, which can still help him win, is the fulfillment of his campaign promises. It was Trump who was able to build a tough dialogue with China on trade injustice, and migration policy was also changed. But Trump still has a lot of problems. One of them is racial. Many experts believe that the black population of the United States can come to the elections with only one goal – to prevent Trump from winning by casting their votes for Biden.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 88 points per day. For the pound/dollar pair, this indicator is "average". On Wednesday, July 8, thus, we expect movement within the channel, limited by the levels of 1.2459 and 1.2635. Turning the Heiken Ashi indicator downward will indicate a new round of downward correction.

Nearest support levels:

S1 – 1.2512

S2 – 1.2451

S3 – 1.2390

Nearest resistance levels:

R1 – 1.2573

R2 – 1.2634

R3 – 1.2695

Trading recommendations:

The GBP/USD pair continues its upward movement on the 4-hour timeframe. Thus, today it is recommended to buy the pound/dollar pair with the goals of 1.2634 and 1.2695 and keep them open until the Heiken Ashi indicator turns down. It is recommended to sell the pair after fixing the 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 8. The European Commission expects a stronger economic downturn than before. Paolo Gentiloni

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: 49.1665

The second trading day for the EUR/USD pair in more than prosaic trading. The pair worked out the Murray level of "5/8"-1.1353 for the third time, bounced off it for the third time, and adjusted to the moving average line. Thus, it is possible that now the pair's quotes will go below the moving average and try to resume the downward trend, but in general, the euro/dollar pair remains within the side channel, where it has been for about a month. Thus, in technical terms, nothing changed on Tuesday, July 7. Buyers are still afraid of new long positions, as a small amount of positive information is received from the European Union. At the same time, it does not come from the US at all, so the dollar purchases are now in doubt. However, sooner or later, the quotes will leave the side channel, we can only wait.

On Tuesday, from the macroeconomic events, we can only note the publication of industrial production in Germany for May. This indicator was worse than experts' forecasts and amounted to -19.3% in annual terms and +7.8% in monthly terms. Thus, market participants expected a stronger recovery of the indicator and did not wait. Perhaps even the fall of the European currency in the first half of the day was triggered by this report, although it is difficult to believe since traders regularly ignore much more significant publications. Moreover, the pair was ready to fall due to technical reasons. However, the negative from the European Union continued to arrive. The European Commission published a summer economic forecast yesterday, in which it indicated that it expects a stronger economic downturn, despite the measures taken by the EU government and the ECB. "Our summer forecast shows, first of all, that the path to economic recovery is still paved with uncertainties," said European Commission member Paolo Gentiloni. According to new forecasts, the Eurozone's GDP will shrink by 8.7% in 2020 and grow by 6.1% in 2021. The European Commission explained that the quarantine measures were lifted and eased at a slower pace than expected in the spring, so the impact of the pandemic on economic activity was deeper, therefore the decline in 2020 will be stronger. Paolo Gentiloni also made five conclusions on the development of the EU economy for the next two years:

1) "The pandemic has hit the European economy harder than expected."

2) "Rapid and decisive policy measures have enabled and are preventing the collapse of European labor markets."

3) "The difference between EU states is increasing. The European states have been hit by the same pandemic, but the consequences are different in the member states."

4) "Inflation will remain relatively low in 2020."

5) "Uncertainties remain high, and the risks that weigh on this forecast are downward-oriented."

Thus, the statements of the European Commission are full of depressing conclusions, forecasts, and expectations. With such a fundamental background, it is difficult to expect the euro to strengthen. Gentiloni also touched on the topic of global economic recovery, saying: "The decline in global GDP in 2020 due to the epidemic will be greater than we expected in the spring, reaching 4%, and the recovery will begin in 2021 at the level of 5% of GDP." Also, Gentiloni said that the accuracy of the current forecasts of the European Commission leaves much to be desired, as there are a huge number of uncertainties and factors that can turn the picture upside down, which may again harm economic growth. Also, Gentiloni noted the high risks of "divorce" of the UK and the European Union without an agreement. According to the politician, the current forecast for 2021 is based on the fact that London and Brussels will sign a free trade agreement. Gentiloni also noted that the current crisis will lead to an increase in poverty, which will have to be fought for many years. In this regard, the member of the European Commission called on the EU countries to quickly accept the 750-billion package of assistance to the European economy, which will be discussed at the EU summit on July 17-18. Earlier, several EU summits have already touched on the issue of allocating 750 billion euros to the most affected EU member states, of which about 66% of the funds will be provided on a non-refundable basis. However, the "Northern countries", the so-called "stingy four", Austria, the Netherlands, Denmark, and Sweden, are opposed to granting distribution of money and are ready to agree only to the option of lending. Thus, even at the next summit, it is far from certain that any positive decision will be made. As we said earlier, the longer the European Council considers this recovery plan, the more the economy and individual countries (Spain and Italy) will sink as a result of the "coronavirus crisis". Thus, we need to rush to approve the sources and methods of distribution of the recovery fund.

In the United States, meanwhile, all attention is focused on the "coronavirus", which is breaking records every day. Although the White House remains completely calm, and Donald Trump even calls for opening all schools from the first of September, the epidemic continues to infect 40-60 thousand Americans every day, and the total number of recorded cases of the disease is already almost 3 million. However, Donald Trump continues to think only about the upcoming elections, has planned several more trips to American cities with campaign rallies, and did not miss the opportunity to "prick" the Democrats and personally Joe Biden, writing on Twitter: "Corrupt Joe Biden and the Democrats do not want to open schools in the fall for political reasons, not because of health. They think it will help them in November. Wrong, people will understand everything." Also, Donald Trump did not forget to "ride" and "false media", writing: "The death rate from the Chinese virus has decreased by 39% while our best testing program in the world continues to work. Why are fake media silent about the fact that mortality is declining? All because they are fake!"

On the third trading day of the week in the European Union and the United States, no important information is planned again. In the EU, only the ECB Vice-President Luis de Guindos, who rarely makes important and high-profile statements, will make a speech. And even more so, how else can the ECB Vice-President spoil the mood of euro buyers after yesterday's forecasts and conclusions of the European Commission and regular "ultra pessimistic" speeches by Christine Lagarde? Thus, today the euro/dollar pair can remain inside the side channel, limited by the levels of 1.1200-1.1353.

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The volatility of the euro/dollar currency pair as of July 8 is 77 points and is characterized as "average". We expect the pair to move between the levels of 1.1205 and 1.1359 today. A new turn of the Heiken Ashi indicator upward will signal a new round of upward movement 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 1.1200, which is the approximate lower limit of the channel, with the goal of 1.1108. It is recommended to open buy orders not earlier than the Murray level of "5/8"-1.1353 with a target of 1.1475.

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GBPUSD and EURUSD: An informal meeting of Brexit negotiators pushes the pound up. Germany's recovery will not be as active

The euro declined against the US dollar, and the British pound surged higher after the appearance of another rumor related to the secret Brexit negotiations. Pressure on the euro was exerted by today's reports on Germany, as well as the forecast of the European Commission, which was filled with one negative. However, the current movement of the euro/dollar pair is purely corrective, and so far, buyers of risky assets are still quite far from panicking.

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Now let's look at the report on industrial production in Germany, which caused the fall of the European currency in the first half of the day. Even though the monthly growth rate has broken all records, serious problems for the German economy cannot be avoided. The data fell short of economists' forecasts, which suggests that a return to normal life will be quite difficult. Given the fact that orders also did not show strong growth, and it will be possible to make a full assessment of the damage from the coronavirus only in the late autumn of this year, it is rather premature to say that the recovery of the industry will remain at a high level. Most likely, the movement will be undulating, and much will depend on how Germany copes with the second wave of the epidemic.

According to the Federal Bureau of Statistics Destatis, in May of this year, due to the easing of quarantine measures, compared with April, industrial production in Germany increased sharply. The indicator includes an assessment of the manufacturing industry, energy, and construction. Thus, industrial production jumped immediately by 7.8%, while economists expected growth of 10%. Compared to May last year, industrial production decreased by 19.3%.

If we take the indicator separately by direction, manufacturing production in May increased by 10.3%, while the production of intermediate goods decreased by 0.1%. The main growth was in the capital goods sector by 27.6%, while consumer goods increased by only 1.4%.

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It is already clear that a more active recovery of the Eurozone economy will require the adoption of the European Commission's proposed plan to stimulate the economy. However, this issue is unlikely to be raised until the meeting of EU leaders scheduled for July 17-18. If the agreement is approved, and Germany and other Northern countries do not become very resistant, given the latest macroeconomic statistics, the demand for the European currency may increase even more. Therefore, do not be surprised if the euro strengthens closer to the summit, even against the background of negative data, as many institutional investors will gain long positions on risky assets. However, any delay in negotiations is fraught with downside risks for both the Eurozone economy and the European currency.

Another unpleasant report was the forecast of the European Commission, according to which they revised their attitude to GDP for 2020. According to the data, economists now forecast a reduction in Eurozone's GDP in 2020 by 8.7%, whereas a little earlier it was only a reduction of 7.7%. As for Germany, it is the only country where the report was revised in a positive direction. The economy is expected to contract by 6.3% against 6.5% in 2020. Italy's GDP is likely to fall by 11.2% against 9.5%, while France's GDP will shrink immediately by 10.6% against the previous estimate of 8.2%.

The revision came after the initial analysis and response of these countries to the coronavirus pandemic after the opening of economies and the lifting of quarantine measures.

As for Italy, a report was released today, which indicated a sharp increase in retail sales after the gradual lifting of quarantine measures and the reopening of stores. According to statistics agency Istat, in May 2020, the retail sales index increased by 24.3%. The growth was mainly due to a sharp jump in non-food products by 66.3%. Meanwhile, the panic eased, and sales of food and essential goods fell by 1.4% compared to April.

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As for the technical picture of the EURUSD pair, now a lot will depend on how traders behave at the level of 1.1270, which was formed today in the first half of the day after a sharp decline in the trading instrument against the background of negative fundamental statistics. If the bulls again show enough activity, as it was in the first half of the day, we can count on a repeated return of the EURUSD to the resistance of 1.1300 and its breakout, which will provide an influx of new buyers who can drive the euro to weekly highs to the levels of 1.1350.

Meanwhile, the British pound shot up after breaking through the 1.2520 resistance, which was the main focus of buyers in the first half of the day. The increase came after rumors that representatives of the UK and the European Union will soon hold informal trade talks. As you may remember, no significant progress was made last week, as the European side still insists on following common rules and standards in the field of trade. Likely, Prime Minister Boris Johnson may also take part in the informal meeting.

The material has been provided by InstaForex Company - www.instaforex.com