Fractal analysis of main currency pairs on July 29th

Forecast for July 29 :

Analytical overview of currency pairs on the H1 scale:

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The key levels for the euro / dollar pair on the H1 scale are: 1.1781, 1.1758, 1.1695, 1.1668, 1.1636 and 1.1614. Here, the price is in a correction from an upward structure. The continuation of the downward movement is expected after the breakdown of the level of 1.1695. In this case, the target is 1.1668. There is consolidation near this level. The breakdown of the level of 1.1666 will lead to a pronounced downward movement. Here, the target is 1.1636. Price consolidation is in the range of 1.1636 - 1.1614. We expect the formation of pronounced initial conditions for a downward cycle to the level of 1.1636.

A short-term upward movement is possible in the range of 1.1758 - 1.1781.

The main trend is the upward structure from July 10, the stage of correction

Trading recommendations:

Buy: 1.1758 Take profit: 1.1780

Buy: Take profit:

Sell: 1.1695 Take profit: 1.1670

Sell: 1.1666 Take profit: 1.1636

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The key levels for the pound / dollar pair on the H1 scale are: 1.3056, 1.2994, 1.2962, 1.2916, 1.2878 and 1.2823. Here, we continue to follow the July 14 upward structure. A short-term upward movement is expected in the range of 1.2962 - 1.2994. We consider the level of 1.3056 as a potential value for the top. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 1.2916 - 1.2878. The breakdown of the last value will lead to a deep correction. Here, the target is 1.2823. This is a key support level for the top.

The main trend is the upward cycle from July 14.

Trading recommendations:

Buy: 1.2962 Take profit: 1.2992

Buy: 1.2996 Take profit: 1.3055

Sell: 1.2914 Take profit: 1.2878

Sell: 1.2876 Take profit: 1.2825

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The key levels for the dollar / franc pair on the H1 scale are: 0.9260, 0.9214, 0.9194, 0.9162, 0.9128 and 0.9089. Here, we are following the development of the July 16 downward cycle. A short-term downward movement is expected in the range 0.9162 - 0.9128, hence, there is a high probability of an upward reversal. For the potential value for the bottom, we consider the level of 0.9089. Upon reaching which, we expect a pullback.

A short-term upward movement is possible in the range of 0.9229 - 0.9260. We expect the initial conditions for an upward cycle to be formed to the level of 0.9260.

The main trend is the downward structure from July 16, the stage of correction

Trading recommendations:

Buy : 0.9230 Take profit: 0.9260

Buy : Take profit:

Sell: 0.9161 Take profit: 0.9132

Sell: 0.9126 Take profit: 0.9090

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The key levels for the dollar / yen pair on the scale are : 106.04, 105.81, 105.52, 105.33, 104.98, 104.72 and 104.32. Here, we are following the development of the downward structure from July 20. A short-term downward movement is expected in the range of 104.98 - 104.72. The breakdown of the last level will lead to a movement to a potential level. Here, the target is 104.32. Upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 105.33 - 105.52. The breakdown of the last value will lead to a deep correction. Here, the target is at 105.81. The range of 105.81 - 106.04 is the key support for the bottom. We expect the formation of pronounced initial conditions for the top up to the level of 106.04.

Main trend: downward structure from July 20

Trading recommendations:

Buy: 105.33 Take profit: 105.50

Buy : 105.54 Take profit: 105.81

Sell: 104.97 Take profit: 104.73

Sell: 104.71 Take profit: 104.34

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The key levels for the Canadian dollar / US dollar pair on the H1 scale are: 1.3468, 1.3437, 1.3395, 1.3358, 1.3303, 1.3274 and 1.3211. Here, we are following the downward structure from July 14th. At the moment, we expect movement to the level of 1.3303. Price consolidation is in the range of 1.3303 - 1.3274. We consider the level of 1.3211 as a potential value for the bottom; upon reaching this level, we expect an upward pullback.

A consolidated movement is possible in the range of 1.3358 - 1.3395. The breakdown of the last level will lead to a deep correction. Here, the target is 1.3437. The range of 1.3437 - 1.3468 is the key support for the downward structure. We expect the initial conditions for the upward cycle to be formed up to the level of 1.3468.

The main trend is the descending structure from July 14

Trading recommendations:

Buy: 1.3397 Take profit: 1.3435

Buy : 1.3438 Take profit: 1.3467

Sell: 1.3303 Take profit: 1.3275

Sell: 1.3272 Take profit: 1.3213

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The key levels for the Australian dollar / dollar pair on the H1 scale are : 0.7268, 0.7236, 0.7213, 0.7182, 0.7128, 0.7104 and 0.7064. Here, the price formed a local upward structure from July 24. The continuation of the upward movement is expected after the breakdown of the level of 0.7182. In this case, the target is 0.7213. Price consolidation is in the range of 0.7213 - 0.7236. For the potential value for the top, we consider the level of 0.7268. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 0.7128 - 0.7104. The breakdown of the last level will favor the development of a downward structure. In this case, the first target is 0.7064.

The main trend is the local upward structure of July 24

Trading recommendations:

Buy: 0.7182 Take profit: 0.7213

Buy: 0.7214 Take profit: 0.7233

Sell : 0.7128 Take profit : 0.7105

Sell: 0.7102 Take profit: 0.7065

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The key levels for the euro / yen pair on the H1 scale are: 124.66, 124.26, 123.67, 123.35, 122.70, 122.26, 121.66, 121.28 and 120.75. Here, we are following the downward structure from July 22nd. The continuation of the downward movement is expected after the breakdown of the level of 122.70. In this case, the target is 122.26. There is consolidation near this level. The breakdown of the level of 122.24 should be accompanied by a pronounced downward movement. Here, the target is 121.66. There is consolidation in the range of 121.66 - 121.28. We consider the level of 120.75 as a potential value for the bottom. Upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 123.35 - 123.67. The breakdown of the last value will lead to the formation of an upward structure. Here, the target is 124.26. We consider the level of 124.66 to be a potential value for the top.

The main trend is the descending structure from July 22

Trading recommendations:

Buy: 123.35 Take profit: 123.64

Buy: 123.70 Take profit: 124.26

Sell: 122.70 Take profit: 122.28

Sell: 122.24 Take profit: 121.66

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The key levels for the pound / yen pair on the H1 scale are : 138.41, 137.73, 137.25, 136.55, 136.04, 135.48, 135.18 and 134.75. Here, we are following the upward structure from July 17. At the moment, the price is in the correction area. A short-term upward movement is expected in the range of 136.04 - 136.55. The breakdown of the last value should be accompanied by a pronounced upward movement. In this case, the target is 137.25. There is a short-term upward movement in the range of 137.25 - 137.73. For the potential value for the top, we consider the level of 138.41. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is expected in the range of 135.48 - 135.18. The breakdown of the last level will lead to a deep correction. Here, the target is 134.75. This is a key support level for the top.

The main trend is the upward structure from July 17

Trading recommendations:

Buy: 136.05 Take profit: 136.55

Buy: 136.60 Take profit: 137.25

Sell: 135.16 Take profit: 134.80

Sell: 134.75 Take profit: 134.10

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GBP/USD: plan for the European session on July 29 (analysis of yesterday's trade). Pound continues to rise, ignoring all

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

After a short pause in the first half of the day, the British pound still managed to break above the resistance of 1.2899, which caused the bullish trend to resume and led to renewing the next monthly highs. If you look at the 5-minute chart, you can see how the pair breaks above the 1.2899 resistance on the second attempt and gets pinned on it, which leads to a new wave of growth. At the moment, the bulls should break through and consolidate above the resistance of 1.2949, but there is a possibility of a divergence on the MACD indicator that will limit the upward potential in the first half of the day. Therefore, only a real consolidation above 1.2949 with a test of this level from top to bottom on the volume will form a signal to open long positions, which can lead to an update of the highs of 1.3025 and 1.3075, where I recommend taking profits. A more correct and safe entry point to long positions is a false breakout forming in the support area of 1.2893, where the moving averages pass. Otherwise, I recommend buying GBP/USD immediately for a rebound from the low of 1.2839, or from the larger support of 1.2786, while expecting a rebound of 30-40 points within the day.

You should take note that the Commitment of Traders (COT) reports for July 21 recorded another increase in short and long positions, and it is obvious that the bears are growing in numbers despite the active opposition of buyers of the pound. This suggests that the growth of the market is not due to the strength of the British pound, but because the US dollar is weak. Problems with Brexit and uncertainty about the prospect of economic recovery have not gone away. The COT report indicates that short non-commercial positions increased from the level of 56,761 to the level of 61,310 during the week. Long non-commercial positions rose from the level of 43,175 to the level of 46,230. As a result, the non-commercial net position increased its negative value to -15,080, against -13,568, which indicates the likelihood of a sharp fall in the pound after the US dollar recovers its strength.

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

Sellers still have problems, and the downward correction from yesterday morning only led to forming a new wave of growth. Now another divergence is forming on the MACD indicator, forming a false breakout in the area of 1.2949 after updating yesterday's highs will be a signal to open short positions on the pound. Otherwise, it is best to postpone the sale of GBP/USD until the high of 1.3025 has been tested, or until the update of the larger level of 1.3075 based on a correction of 30-40 points within the day. An equally important task for the bears is to return GBP/USD to the support level of 1.2839, where the moving averages are also held. Consolidating below this range forms a good entry point into short positions that are capable of updating the lows of 1.2839 and 1.2786, where I recommend taking profits.

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Indicator signals:

Moving averages

Trading is carried out just above the 30 and 50 moving averages, which indicates a continuation of the bull market.

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

Bollinger Bands

Growth will be limited by the upper level of the indicator in the area of 1.2960. In case the pair falls, the first rebound will be noticeable after the test of the lower boundary of the indicator in the area of 1.2880.

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 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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EUR/USD: plan for the European session on July 29 (analysis of yesterday's trade). Traders await the Fed meeting. COT reports.

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

Despite the relatively low volatility yesterday afternoon, we still managed to wait for a signal to form on opening long positions. Weak data on the US consumer confidence indicator did not exert much pressure on the European currency, which led to forming a false breakout in the support area of 1.1704, which is clearly seen on the 5-minute chart. However, this entry point only managed to return EUR/USD to the middle of the side channel, where trading is currently being conducted. Nothing has changed from a technical point of view. Most likely, the bulls will try to regain the resistance of 1.1763 in the morning, but important fundamental data will not be released in the European session, which could limit the upward potential of the pair. After consolidating above the 1.1763 range, you can expect to update the weekly high in the 1.1802 area, as well as a test of the long-term resistance of 1.1830, where I recommend taking profits. If the pressure on EUR/USD returns in the morning, and most likely it will, as traders will be preparing for the results of the Federal Reserve's monetary policy meeting, then the bulls will have to protect the support of 1.1704. However, I recommend opening long positions from there only after forming a false breakout. It is best to buy euros immediately on a rebound from the low of 1.1648 in the expectation of a correction of 25-30 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for July 21 recorded a sharp increase in long positions and a reduction in short ones, which indicates the return of investors' interest in risky assets amid confusion that is happening in the US due to the coronavirus, the presidential election and the fall in Treasury yields. The report shows an increase in long non-commercial positions from 194,252 to the level of 204,185, while short non-commercial positions decreased from the level of 83,340 to the level of 79,138. As a result, the positive non-commercial net position increased to 125,047, against 110,912, which indicates an increase in interest in buying risky assets even at the current, rather high prices.

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

Bears made another unsuccessful attempt to break below the support of 1.1704 yesterday, however, the more these tests occur, the more likely it is that the pair will break below this range. But it is important to understand that consolidating below this level forms a good entry point for opening short positions while expecting EUR/USD to fall to a low of 1.1648. A more distant goal will be the 1.1591 area, where I recommend taking profits. Another interesting entry point will be forming a false breakout in the resistance area of 1.1763, which may occur today in the first half of the day amid the absence of important fundamental data. Also, waiting for the results of the Fed meeting will restrain demand for the European currency. If sellers are not active in the 1.1763 area, I advise you to postpone short positions until the high of 1.1802 has been updated, or even sell EUR/USD immediately on the rebound from the resistance of 1.1830 based on a correction of 25-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates the formation of a downward correction in the short term.

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

Bollinger Bands

The volatility is very low, which does not provide signals to enter the market.

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

Elliott wave analysis of EUR/JPY for July 29, 2020

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EUR/JPY failed to break above minor resistance at 124.92 for a rise higher to 125.82 and 127.38 on the way to 129.26. We do think that support in the 122.87-123.05 area will be able to protect the downside from another push higher through resistance at 124.92 for a continuation higher to 125.82 and 127.38 as the next minor targets on the way towards 129.26.

R3: 124.85

R2: 124.30

R1: 123.87

Pivot: 123.60

S1: 123.31

S2: 123.19

S3: 122.81

Trading recommendation:

We are long on EUR from 123.35 with our stop placed at 122.75

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Elliott wave analysis of EUR/USD for July 29, 2020

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EUR/USD is currently testing important resistance at 1.1715. A clear break above this level will call for much more upside pressure in the weeks to come. A clear break above resistance at 1.1715 will call for a rise higher to 1.2216 as the first target on the way higher is 1.2854.

EUR/USD does look quite overbought at the moment.However, traders should be careful, as it can stay overbought for many weeks if we now are in wave iii of 3 as we expected. Just look what happend from April 2017 to August 2017 when EUR/USD rallied by more the 1,100 pips.

R3: 1.2100

R2: 1.1936

R1: 1.1816

Pivot: 1.1715

S1: 1.1678

S2: 1.1605

S3: 1.1536

Trading recommendation:

Buy a possible dip into the 1.1500 - 1.1536 area or a break above 1.1773

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Ripple Price Movement On July 29, 2020

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On the 4-hour chart, we see that Ripple is heading toward the $0.2445 level, although there is a potential reversal of this cryptocurrency. This scenario has been already confirmed by the Stochastic Oscillator above the overbought level. As long as Ripple does not retrace lower than the $0.2153 level, the bullish scenario is set to continue.

(Disclaimer)

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Bitcoin Price Movement on July 29, 2020.

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Bitcoin is now trying to reach the $11,150.8 level. If the bullish momentum is strong, the $11,318.8 level is likely to be reached too. Please pay attention to the $10,794.31 level. If this cryptocurrency pulls back and closes below $10,794.31, then the upward momentum will be halted and Bitcoin will enter into the sideways phase.

(Disclaimer)

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

Control zones for USDCAD on 07/29/20

The fall of the pair is a priority, so keeping sales will be beneficial. The 1.3314 level is within the average daily move, which is the June low. A test of this level will increase the likelihood of a large demand.

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It is important to note that the June low coincides with WCZ 1/2 1.3322-1.3310. This indicates the importance of the range for making trading decisions.

An alternative pattern of continuing the fall will develop if the close of today's trading occurs below 1.3314. This will increase the likelihood of the Canadian dollar strengthening even further

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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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Control zones for NZDUSD on 07/29/20

The probability of a downward corrective movement has increased today. The first target of the fall is WCZ 1/2 0.6625-0.6618. The test of this zone will determine the upward momentum. If the test leads to an increase in demand and forms an absorption pattern, then this will provide an opportunity to buy the instrument.

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Working within the accumulation zone is the basis for building a trading plan. Purchases after the test of WCZ 1/2 will need to be closed when retesting the weekly control zone

An alternative reversal model will develop if the closing of today's trading occurs below the WCZ 1/2. This will pave the way for a decline towards the weekly CZ 0.6550-0.6535. The bearish pattern will become the main one for the first half of next month.

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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.

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

Forecast for EUR/USD on July 29, 2020

EUR/USD

The euro dropped 34 points yesterday. This decline was timely for the divergence forming with the Marlin Oscillator. But the upside potential remains, the 1.1804 target at the border of the global price channel can still be reached, which began in July 2008. The level of 61.8% correction of the fall branch from February 2018 to March 2020 also lies here. The level is marked 38.2% on the chart as the Fibonacci grid is inverted to determine the reaction levels of the expected long-term decline. Whether the divergence will finally form or the price prefers growth, this will become known after the Federal Reserve announces its decision on monetary policy today.

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Marlin is still in an upward trend zone on the four-hour chart. Its advanced decline indicates the intention to move into the bears' zone, which will show the leading direction of the price. But a stronger and more reliable indication for a further decline will be the price consolidating below the 1.1620 level, which will also become a consolidation below the MACD indicator line. In this case, the euro will be aiming for 1.1490.

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Forecast for GBP/USD on July 29, 2020

GBP/USD

The British pound improved the target level of 1.2912 at the Fibonacci level of 76.4% on Tuesday, which coincides with the low on December 23,2019. The high of the day coincided with the January 2020 low. The pound has reached a historically strong resistance zone, from which it may well turn down. Technical indicators indicate the likelihood of such a reversal. On a daily scale, this is a reversal of the signal line of the Marlin Oscillator from the overbought zone. Consolidating the price below the Fibonacci level of 76.4% will give an opportunity to decline to 100.0% at the price of 1.2724.

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There is a price divergence with the Marlin oscillator on the four-hour chart, which has not yet been fully formed. A decrease in the price under the MACD line (1.2820) will be a reliable signal to achieve the 1.2724 target.

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Forecast for AUD/USD on July 29, 2020

AUD/USD

The Australian dollar traded in a 65-point range near the 0.7190 resistance on Tuesday. The Marlin triple divergence has strengthened even more on the daily chart. At the same time, a short-term price entry into the 0.7190-0.7225 range is allowed with a slight exit of the Marlin signal line above the line forming the divergence. A price fall below 0.7070 will be the final signal for a reversal of the trend into a medium-long-term decline.

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The price is above the indicator lines of balance (red) and MACD (blue) on the four-hour chart. The signal line of the Marlin oscillator is attacking the border of the bears' territory. This is a signal for the expected success in the attack on the support of the MACD line (0.7124), after which we are waiting for 0.7070 to be overcome.

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Forecast for USD/JPY on July 29, 2020

USD/JPY

The Japanese yen strengthened, that is, dropped 26 points on the chart on Tuesday. The short-term correction we expected took place; it was limited by the downward embedded price channel line. Now the target for the decline is the 104.60 level.

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The price consolidated below the target level of 105.15 on the four-hour chart, the lower target at 104.60 is open, but now there is a bit of hindrance to the double convergence on Marlin. Strong trends are able to reverse divergences with indicators, if only there is a corresponding fundamental factor that postpones the correction. Today, such a factor may be the Federal Reserve's decision on monetary policy.

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Control zones for USD/CHF on 07/29/2020

The pair is trading outside the average monthly and weekly moves today. This increases the probability of forming a corrective ascending pattern. To implement it, updating the weekly low and testing the weekly control zone 0.9153-0.9126 are necessary.

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The major pullback level is at 0.9276. The probability of the formation of a corrective pattern increases to 90%.

The alternative pattern of continuing the decline has a low probability, so selling from the current levels is not profitable. However, buying is also too early and it is necessary to wait for the formation of the "absorption" pattern on the daily time frame.

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Daily CZ - day control zone. A zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. A zone formed by important marks of the futures market that change several times a year.

Monthly CZ - monthly control zone. A zone that reflects the average volatility over the past year.

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USDCAD below descending trendline resistance! Drop incoming!

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Trading Recommendation

Entry: 1.33872

Reason for Entry: Descending trendline resistance,61.8% Fibonacci retracement

Take Profit: 1.33491

Reason for Take Profit: Graphical swing low

Stop Loss: 1.34073

Reason for Stop Loss: Graphical swing high

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NZDCAD testing support, potential bounce!

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Trading Recommendation

Entry: 0.88972

Reason for Entry: Ascending trend line, 61.8% fibonacci extension and 78.6% fibonacci retracement

Take Profit: 0.89335

Reason for Take Profit: Horizontal swing high resistance, 61.8% fibonacci retracement

Stop Loss: 0.88783

Reason for Stop Loss: Horizontal swing low support, 100% fibonacci extension

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Hot forecast and trading signals for the GBP/USD pair on July 29. COT report. China closes US consulate in Chengdu in response

GBP/USD 1H

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The GBP/USD pair also started a weak correction on Tuesday after buyers failed to overcome the first resistance level of 1.2889. However, the pair's quotes resumed their upward movement and broke the 1.2889 level in the afternoon. Thus, the US dollar did not even manage to adjust normally on July 28. Accordingly, the upward trend continues, bears are still absent from the market, and the trend line continues to support traders to grow. Therefore, we should not wait for the dollar to strengthen before the bears manage to overcome the trend line and, preferably, the Kijun-sen line.

GBP/USD 15M

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Both linear regression channels are still directed upwards on the 15-minute timeframe, so there are no prerequisites for changing the trend's direction at the moment. The latest Commitments of Traders (COT) report on the British currency alerted market participants. The pound sterling grew against the US dollar during the reporting week (from July 15 to 21), but the most important category of traders "non-commercial" opened more Sell-contracts than Buy ones at this time. Non-commercial traders opened 4,500 new Sell-contracts and 3,000 Buy-contracts in just a week. Thus, the net position has decreased by around 1,500, which means that the bearish mood among professional traders has increased. The commercial category of traders also did not open Buy-contracts, but on the contrary, got rid of them, closing almost 5,000. Thus, both groups of traders did not increase their longs, however, the pound was getting more expensive and continues to get more expensive to this day. We believe that this is a signal for an incipient change in the trend, but this does not mean that the upward trend will end tomorrow. However, it is quite strange to see the growth of the currency, which is mostly sold off by major players.

The fundamental background for the GBP/USD pair slightly improved on Tuesday, although market participants did not really need it. The pound has already been bought rather zealously in recent weeks and without fundamental support. Nevertheless, purchases continued after information emerged from Michel Barnier, who said that an agreement with London was still achievable and that he saw British Prime Minister Boris Johnson's desire to conclude a deal in a personal meeting. Thus, Barnier and his team are ready to continue working on the deal, despite the fact that Johnson's position named after US President Donald Trump is already clear to everyone. That is, London wants the kind of deal it wants, and is not ready to give in on this issue. If Brussels also does not yield, then London is ready to sever all ties and agreements with it and trade according to the World Trade Organization rules, even though this will be to its detriment. In any case, by the end of the summer the situation with the negotiations should finally become clear, since Johnson personally planned to visit Brussels, and he promised to curtail any negotiations by the end of the summer if progress is not made. In general, as usual, there are many high-profile statements, but few concrete actions. But the bulls are ignoring all this data for now and continue to cheerfully buy the pair, which leads to a strong increase in the pound and a strong fall in the dollar.

There are two main scenarios as of July 29:

1) The outlook for the bulls continues to be very positive, as the pair's quotes continue to remain above the trend line. The first target for this week was broken yesterday – the resistance level of 1.2889. Thus, you are advised to keep long positions open with the targets of the resistance levels 1.2988 and 1.3174. Potential Take Profit in this case will be from 40 to 220 points.

2) Sellers are advised to start considering the possibility of opening short positions with the goal of the Senkou Span B line (1.2622), but to do this, you need to wait until the Kijun-sen line (1.2809) has been overcome and, accordingly, the upward trend line. The potential Take Profit in this case is about 150 points.

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

Hot forecast and trading signals for the EUR/USD pair on July 29. COT report. Let there be a correction! Buyers loosened

EUR/USD 1H

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The EUR/USD pair began a long-awaited correction on the hourly timeframe on July 28. Unfortunately for the dollar, this correction may end as quickly as it started. At least at the time of this writing, the pair has corrected by only 60 points, which is minuscule in relation to the previous upward movement. Nevertheless, buyers loosened their grip, which allowed the quotes to go below the 1.1741 level and enables the pair to continue moving down to the critical Kijun-sen line. However, we should admit that the bears are still absent in the market, so it will be extremely difficult for the dollar to continue moving down anyway, and even more so to overcome the Kijun-sen line or the ascending channel.

EUR/USD 15M

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The lower channel of linear regression turned down on the 15-minute timeframe, so we finally got the first signal of a possible trend change. The latest Commitments of Traders (COT) report showed major changes in favor of buyers. Professional traders (non-commercial category) opened 9,500 new Buy-contracts and closed 8,000 Sell-contracts during the reporting week (from July 15 to 21). The net position for this category, which is the most important, immediately increased by 17,500. In general, the European currency continued to rise in price after July 21 and does so to this day. Thus, non-commercial traders continue to increase purchases of euros. Therefore, the COT report does not give any reason to assume the end of the upward trend in the euro. Even the 36,000 Sell positions opened by the commercial category do not have much significance, since this is a group of hedgers and traders who usually open opposite categories of non-commercial positions. Simply put, professional traders set the tone.

The fundamental background for the EUR/USD pair did not change on Tuesday. In principle, there was no news at all from the European Union at the beginning of the new trading week. Thus, the European fundamental background has not changed completely. And nothing changed over the ocean, either. All the key themes remain the same. Market participants continue to closely monitor the scale of how the US deals with coronavirus, the clashes of protesters with US President Donald Trump's special forces in Portland and Seattle, the course of the election campaigns of Joe Biden and Trump, the intensity of relations between China and the United States, the stunning promises of the US president about the "golden life". Meanwhile, the US dollar continues to fall in price. In principle, the last nail in the dollar's coffin may fly this week. And this is not even the Federal Reserve meeting, at which traders are not expecting anything overly interesting. This is a report on GDP for the second quarter, according to which the most important indicator of the state of the economy will contract by 33-34%. This report will be released on Thursday and you are advised to not lose sight of it. Nothing interesting is expected from either the EU or the US until the evening. However, traders could become relatively active on the eve of the announcement of the results of the Fed meeting, and the US dollar may even continue to strengthen, since market participants do not expect anything pessimistic from the Fed.

Based on the above, we have two trading ideas for July 29:

1) Buyers continue to completely dominate the market, but have taken a break. Buy orders remain relevant with targets at the resistance levels of 1.1827 and 1.1996. Thus, now traders need to wait for the local correction to be completed, which may be signaled by a rebound from the Kijun-sen line or consolidation of quotes above the 1.1741 level. Potential Take Profit in this case is from 70 to 240 points.

2) On the other hand, bears continue to rest and wait for the bulls to give them at least a minimal chance to seize the initiative in the market. This requires at least price taking below the Kijun-sen line (1.1659). In this case, you are advised to sell the pair with the targets Senkou Span B line (1.1575) and the support level of 1.1486. You are advised to consider serious selling after the price consolidates below the rising channel. Potential Take Profit in this case is from 60 to 150 points.

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

Overview of the GBP/USD pair. July 29. Democrats and Republicans are fighting over the size of the new package of aid to

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 157.5025

The British pound started the second trading day of the week quite pessimistic, with a downward movement. However, this so-called correction ended very quickly, and the pound soared up again. Market participants continue to ignore the negative news background from the UK, but at the same time, they are very attentive to everything that is happening in the US. Thus, the next local highs were updated, and the upward trend continued. The pound/dollar pair did not even manage to adjust normally.

In the article on the euro/dollar, we have already questioned whether everything that is happening in America at this time is happening by itself. The war with Donald Trump continues on the sidelines of the US Congress. For example, the issue of providing a new package of assistance to the economy in the face of a severe pandemic crisis is now on the agenda. Republicans and Trump are proposing to allocate another $ 1 trillion for this, as well as cut federal unemployment allowances by three times. In America, the current situation is that unemployment benefits, together with "coronavirus" allowances, often exceed the wages of certain categories of American workers. In fact, many Americans do not want to go to work, because their wages do not differ much from the amount of unemployment benefits. And given how much the "coronavirus" is raging in the country, not every American is ready to lead an active social life. Democrats also propose to allocate another three trillion dollars to support the economy and thus increase the national debt to 29-30 trillion dollars. Naturally, in the run-up to the election, this proposal from the Democrats is a very strong step for Joe Biden. Of course, many people want to stay out of work as long as possible and still get the same money. Well, Donald Trump needs Americans to go back to work and restore the economy, and not just sit at home and fear the "coronavirus". That is why the president proposes to reduce unemployment benefits, which naturally further reduces his political ratings.

Meanwhile, unexpectedly, the British pound has found fundamental support. Just the kind that the pound likes. That is, rumors, speculation, assumptions, and so on. And on this news, the pound continued to strengthen against the dollar on July 28. Quite unexpectedly, Michel Barnier, the chief Brexit negotiator with London, said at a closed meeting with the ambassadors of EU member states that an agreement with the UK is possible to conclude. "I remain confident that a balanced and sustainable agreement remains possible, even if it is less ambitious," Barnier said, also adding that London does not seem too interested in a quality agreement. According to Barnier, his recent meeting with Boris Johnson showed that London really wants to conclude an agreement, despite the fact that it is ready to reject any agreements with the EU.

At the same time, British Prime Minister Boris Johnson said that the first signs of the second "wave" of "coronavirus" are being observed in Europe. The UK has introduced a mandatory two-week quarantine for all those who arrived from Spain since July 26, some countries again note serious increases in the number of infected people. If Europe and the UK are overwhelmed by the second "wave" of the pandemic, the pound and euro may very quickly lose their advantage over the US dollar.

Well, the leader of the United States Donald Trump, meanwhile, continues to delight the audience with their allegations. This time, the US president said that the victory over the "coronavirus" will soon be won, after which the country will enter the "Golden age". "It will be much better than ever," Trump said, politely keeping silent about the fact that this "Golden age" can be associated, in his opinion, only with his name, and not with the name of Joe Biden. All that America will get if Biden becomes the new president, Trump believes, is destroyed cities and collapsed markets. In addition, the president once again criticized the media, which "represent the protesters in Portland and Seattle as innocent people, although in fact they are agitators and provocateurs who should be kept under the control of law enforcement agencies".

As a result, the British currency continues to grow, and again at a very high rate. What can stop buyers in the current conditions, it is even difficult to guess. The most interesting thing is that almost no important and interesting macroeconomic reports are planned for this trading week in the UK. But in the US, a report on GDP will be released, which can finally finish off the US currency. Recall that according to experts' forecasts, the US economy may lose from 33% to 34% in the second quarter. We also remind you that initially in the first quarter, GDP was expected to fall by 4%, but after that it came out by 5%. So, this time there may be something similar. Well, it is unlikely that traders will be happy to reduce the economy by more than 34%. Also, today we plan to summarize the results of the Fed meeting, which can be both absolutely "passing" and quite interesting. Simply put, we don't know what to expect from the Fed's monetary committee in such a difficult economic situation.

From a technical point of view, nothing changes at all for the pound/dollar pair. The pound continues to grow even when the euro currency takes a pause. Thus, it seems that buyers really aimed at the level of 1.3200, which is the maximum from March 9, from which the panic fall of the pair and the growth of the dollar began. Both channels of linear regression are still directed upwards, and the price is located far enough from the moving average line, which indicates the strength of the current trend. Thus, short positions are not recommended to be considered at all, since there is no single prerequisite for changing the trend. The future of the US dollar still depends on currency market traders, not least the major players. However, despite the fact that the latest COT report showed a reduction in the net position (weakening of the bullish mood), the pound, as we see, still continues to grow. Therefore, we need to wait for the time when market participants "remember" that everything in the UK is also not very good, the economy of this country is also experiencing serious problems, and in the autumn, Britain may face its second "wave" of the pandemic.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 102 points per day. For the pound/dollar pair, this value is "average". On Wednesday, July 29, thus, we expect movement within the channel, limited by the levels of 1.2842 and 1.3046. Turning the Heiken Ashi indicator downward will indicate a new round of downward correction.

Nearest support levels:

S1 – 1.2878

S2 – 1.2817

S3 – 1.2756

Nearest resistance levels:

R1 – 1.2939

R2 – 1.3000

R3 – 1.3062

Trading recommendations:

The GBP/USD pair continues to move up on the 4-hour timeframe. Thus, it is recommended to stay in purchases of the British currency with the goals of 1.3000 and 1.3046 (the level of volatility on Wednesday), until the Heiken Ashi indicator turns down. Short positions can be considered after fixing the price below the moving average with the first goal of 1.2695.

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

Overview of the EUR/USD pair. July 29. The coronavirus, the economic crisis, unemployment, and rallies across the country

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 83.1168

The EUR/USD currency pair stopped rampant growth on Tuesday and started a kind of corrective movement. So far, the downward movement does not even resemble a correction, since it is extremely weak. Thus, it will be very good if the price manages to reach at least the moving average line. There is no question of fixing the price below the moving average and changing the trend to a downward one. Despite the fact that we have already warned traders several times that the upward trend may end at any moment, there are no prerequisites for this yet. Therefore, as before, it is not recommended to try to guess the market turn down, and trade strictly on the trend.

There were no macroeconomic publications on Tuesday in either the United States or the European Union. However, by and large, this does not matter now, since traders still ignore most of the statistics. But in America, the state of four crises persists, no optimistic news is received, and everything can only get worse. In principle, if we try to look at the situation in the United States much more broadly, we get a completely different picture. This is now a serious economic crisis in the country, because of "coronavirus", because "China is to blame". There are rallies and protests all over the country right now, because "a white police officer killed a black man in custody". This is now a country mired in a serious political crisis, because Donald Trump does not know how to cooperate with anyone who does not support his point of view. And if you look at the situation in general, try to put it together into one single picture, you get a very complete picture of what is actually happening in the United States.

We should not start with an epidemic, a crisis, or a social crisis. You need to start, as usual, with the activities of Donald Trump. We will not once again list all the "merits" of Trump to the country, thanks to which, it left the WHO, fell out with China, going to start a trade war with the EU, and is in the epicenter of the economic and epidemiological crisis. Trump in fact failed to reach an agreement with China, failed to reach an agreement with the European Union, did not take into account the threat of an epidemic, then spat on the health and lives of Americans when "opening" the economy, fearing that during the time that the country will be in "lockdown", other international competitors will go far ahead, and he will lose all chances of re-election for a second term. Trump also failed to stop and calm protesters across the country, because he did not try to do so. Instead of supporting the protesters (rallies are not prohibited by US laws), he almost immediately offered to disperse all those who prevent him from achieving personal goals, disperse with the help of the army, which shocked the Pentagon and the army itself, which has never been used to suppress riots and rallies. And what is the result? As a result, we get that there are quite a few interested in Trump being re-elected for a second term in the world and in the US.

China does not benefit from Trump, because it is no longer possible to trade with America as it was before, and Trump plans to tighten the screws even more and balance the trade balance with China, which is naturally not profitable for the PRC itself. Trump is not beneficial to anyone inside the country, since even Republicans already understand that under Trump, the country will be forever mired in conflicts and internecine strife. On the one hand, the United States, like other "superpowers", is often involved in military conflicts, trade conflicts, and conflicts in general. As they say, "because they can". On the other hand, a country should come out of every conflict with some profit, with some benefit. What are the benefits of Trump's actions? He himself destroyed the economy, completely destroyed normal relations with China, and still no one knows how, why, or whether the "coronavirus" broke out on purpose. Given which country was most affected by COVID-2019, certain doubts are creeping in.

Now let's move on to rallies and protests. We have also questioned the "idea" of the rallies themselves. Yes, the murder of George Floyd is a very sad event that certainly deserves attention and investigation. But does it deserve two months of rallies and protests across the country? Do Americans really care so much about racism in the country? Especially when there are far more serious problems that affect everyone, whether white or black. We are already inclined to believe that all the unrest in American cities is supported and "fueled" by some hidden force. And given the fact that Trump does not benefit from all these rallies, it is certain that this force is counteracting the US president. Well, the situation with COVID-2019 in general, no matter how you look at it, works against the US leader. At this time, whatever Trump does, he will still come under criticism. Voters and ordinary citizens are no longer interested in how many tests the United States have conducted. And no one believes in Trump's promises anymore. Leading US media outlets have already published the figure of 20,000 several times. That's how many times Trump intentionally or accidentally misled in the course of his speeches, statements and comments. 20,000 times in less than 4 years. Thus, the next statement of Trump that the vaccine against "coronavirus" will be ready for the winter, no one is enthusiastic. On November 1, Trump can declare without batting an eye that if he is not elected, the development of the vaccine will stop. No one will be surprised. More confidence now in Anthony Fauci, the country's chief epidemiologist, whom the White House is trying to keep quiet, as his forecasts are completely disappointing. And given the fact that the US population blames Trump for the scale of the pandemic and the losses, Fauci just confirms that Trump is to blame, and we can expect even worse consequences of the pandemic due to the negligence of the country's government. Thus, it is possible that there is already a certain conspiracy against Trump in the US, designed to prevent him from winning the election in November.

On the third trading day of the week in the US, it is planned to summarize the results of the Fed meeting. None of the market participants expects changes in the parameters of monetary policy, so it is unlikely that this meeting and its results will be unexpected or interesting. Most likely, the meeting will be "passing". Quantitative easing and economic stimulus programs are unlikely to change in the face of a pandemic. Thus, the greatest interest will be aroused by the Fed's press conference, which may contain important and interesting information about the prospects of the economy, the timing of its recovery and the future actions of the regulator.

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The volatility of the euro/dollar currency pair as of July 29 is 95 points and is still characterized as "average". Thus, we expect the pair to move today between the levels of 1.1632 and 1.1822. The upward turn of the Heiken Ashi indicator signals the end of the downward correction within the ascending trend.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

Trading recommendations:

The EUR/USD pair started a very weak round of corrective movement. Thus, today it is recommended to wait for the completion of the correction, which is signaled by the reversal of the Heiken Ashi upwards, and again buy the euro with the goals of 1.1822 and 1.1963. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first target of 1.1475.

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

Comprehensive analysis of movement options for EUR/USD & GBP/USD (H4) on July 29, 2020

Minute operational scale (H4)

There will be no stops in the EUR/USD & GBP/USD (H4). We are looking at the event options for these tools from July 29, 2020

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Euro vs US dollar

The development of the single European currency EUR/USD since July 29, 2020 will be due to the development and direction of a breakout of the channel borders 1/2 Median Line (1.1795 - 1.755 - 1.1720) of the Minute operational scale forks - we look at the animated chart.

In the case of joint breakdown breakdown of support level at 1.1720 at the lower border of the channel 1/2 Median Line Minute and Median Line Minuette (1.1710), the movement of a single European currency will continue to order:

  • lower bound of ISL38.2 (1.1680) equilibrium zone of the Minuette operational scale fork;
  • ultimate Shiff Line Minute (1.1610);
  • initial line SSL Minuette (1.1580);
  • with the prospect of reaching the boundaries of the equilibrium zone (1.1380 - 1.1320 - 1.1260) of the Minute operational scale fork.

The breakdown of the upper border of the channel 1/2 Median Line of the Minute operational scale fork - resistance level of 1.1795 - the upward movement of the EUR/USD may be continued to the end of the line FSL (1.1855) of the Minuette operational scale fork and the line of control UTL (1.1920) of the Minute operational scale fork.

The EUR/USD movement options from July 29, 2020 are shown on the animated chart.

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Great Britain pound vs US dollar

The movement of Her Majesty's currency GBP/USD from July 29, 2020 will depend on the direction of the breakdown of the range:

  • resistance level of 1.2955 - lower bound of ISL38.2 equilibrium zone of the Minute operational scale fork;
  • support level of 1.2920 - UTL control line of the Minuette operational scale fork.

A consecutive breakdown of the support level of 1.2920 on the line of control UTL of the Minuette operational scale fork and the initial line SSL Minuette (1.2900) will direct the movement of GBP/USD to the borders of channels 1/2 Median Line of the Minuette operational scale fork (1.2835 - 1.2805 - 1.2775) and Minute (1.2775 - 1.2705 - 1.2623), and areas of equilibrium (1.2750 - 1.2705 - 1.2665) of the Minuette operational scale fork.

The breakdown ISL38.2 Minute - resistance level of 1.2955 - will determine the further development of currency movements of Her Majesty in the zone of equilibrium (1.2955 - 1.3055 - 1.3160) of the Minute operational scale fork, taking into account the development of the final Shiff Line Minute (1.3010).

We look at the options for the movement of GBP/USD from July 29, 2020 on the animated chart.

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The review is prepared without considering the news background, the opening of the trading sessions of the major financial centers and is not a guide to action (issuing orders "sell" or "buy").

Formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

Where the power coefficients correspond to the weights of currencies in the basket:

Euro - 57.6 %;

Yen - 13.6 %;

Pound - 11.9 %;

Canadian dollar - 9.1 %;

Swedish Krona - 4.2 %;

Swiss franc-3.6 %.

The first coefficient in the formula brings the index value to 100 on the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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

EUR/USD. Price barrier siege: 1.1750 a tough nut to crack

Buyers of the euro-dollar pair updated multi-month highs yesterday, but could not gain a foothold above the resistance level of 1.1750 (the lower limit of the Kumo cloud on the monthly chart). All other price barriers were literally demolished by EUR/USD bulls amid the general weakening of the US currency. Today, the dollar is trying to win back at least a small part of the lost positions, and in some cases it succeeds (for example, against the Canadian currency). As for the euro-dollar pair, we see a positional struggle between buyers and sellers. The pair has been trading within the 17th figure throughout the day: neither bulls or bears are able to make a price leap yet. The pair attracts sellers as soon as the price rises above the resistance level. And vice versa: the pair begins to be bought as soon as the price falls to the bottom of the 17th level. As a result, EUR/USD traders are stuck in the flat, although the pair is more willing to be sold on growth than be bought on declines.

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The indecision of market participants is explained by the absence of a powerful "unipolar" news source. The economic calendar for Tuesday is almost empty, so traders have to once again chew on yesterday's topics, which have already been largely played by the market. For example, the topic of the coronavirus, which continues to exert background pressure on the dollar, has been dealt by the news that the American company Moderna has begun the final vaccine trials: a record number of volunteers - 30,000 people - will take part in the study. In addition, the daily increase in infected people slightly decreased on Monday relative to the previous days (+59,000, while the figure did not fall below the 60,000 mark over the past week). That is, on the one hand, the situation with the coronavirus remains difficult in the United States, but, on the other hand, the light that appeared at the end of the tunnel helped the dollar to stop its decline.

Macroeconomic reports are also controversial. Thus, the consumer confidence index from the Conference Board, which is based on a survey of Americans about the level of their confidence in the current state of the economy and future development, showed negative dynamics. If the indicator rose to 98 points in June, then it fell to 92 points in July, reflecting the increased fears of US residents about the second wave of the epidemic.

Meanwhile, the Richmond Fed Manufacturing Index (which is based on a survey of manufacturing companies in the region) unexpectedly showed strong growth. This indicator collapsed to -53 points in April, then began to gradually recover, although at a rather slow pace: it came out at -27 points in May, and at zero in June. Experts expected a modest increase to three points today, but the indicator jumped to 10.

But the positive effect of the release was offset by a message from the US Federal Reserve, which extended seven emergency lending programs. These programs were approved by the Fed at the height of the epidemic (in March and April), but they expired at the end of September. With today's decision, the Fed made it clear that it will take a soft and cautious position in the near future. It is also worth noting that the Fed's decision has been announced today, i.e. on the eve of the announcement of the July Fed meeting.

An uncertain situation is emerging with the new aid package for the US economy. A $1 trillion Republican bill is currently pending in the Senate. Senate minority leader - Democrat Chuck Schumer - just announced that the parties at this point are "too far away" for a consolidated decision. At the same time, he rather harshly criticized the bill: Schumer called the Republican initiative "completely inadequate", since it does not provide enough money for the safe opening of schools, does not protect Americans who find themselves in a difficult financial situation from the withdrawal of mortgaged housing, and tenants - from eviction.

In turn, House Speaker Nancy Pelosi (where Democrats control the majority) even suspected US President Donald Trump of personal gain in developing new stimulus measures. She suggested that Trump proposed to include an article on the costs of renovating the FBI headquarters in the new bill for personal gain. We are talking about the Trump Hotel, which is located opposite the Bureau's headquarters. According to Democrats, the head of the White House is interested in the security forces building being renovated (while the alternative is to move to another building), "so that no one can build a hotel on this attractive site for development" - on Pennsylvania Avenue in the very center of the US capital. This position of Pelosi suggests that it will be difficult for the Trump administration to get past the millstones of the Lower House of Congress.

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Thus, the prospects for the dollar still look quite vague, despite the existence of reasons for corrective growth. Political battles in Congress, the coronavirus factor, conflicting macroeconomic statistics, the diplomatic war with China – all these factors continue to put pressure on the greenback. Therefore, selling the EUR/USD pair looks extremely risky now. But purchases can be considered after consolidating above the 1.1750 mark. This level of resistance was too tough for the pair's bulls yesterday, but buyers continue to besiege this price barrier. Once overcome, you can consider longs to the next resistance level of 1.1800. You are advised to place the stop loss at 1.1575 (the Tenkan-sen line on the D1 timeframe) – if the price goes below this level, the growth scenario will lose its relevance.

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

Fed may support the dollar

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The dollar has been falling since May, the decline took on a threatening momentum yesterday. As a rule, sharp and strong movements are accompanied by a correction, which happened on Tuesday. The US currency has rebounded from 2-year lows, however, the reasons why it has been declining until today have not gone away.

It is too early to talk about the reversal of the tendency. The medium-term trend, like the long-term one, is still downward, so there is no need to rush into purchases. We need to wait for a confident consolidation above the 93.75 level, where the line of the medium-term downward trend passes. The dollar fell by 3.6% in July. In order for it to be able to avoid the worst month in a decade, it needs not just a correction, but a rather crucial rise.

USDX

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The dollar correction is probably related to the upcoming events this week: the adoption of a new package of stimulus measures for the US economy and the Federal Reserve meeting on the rate. Both factors are unpredictable, so they can make the game against the dollar more tense.

Investors do not expect the central bank to respond with changes in monetary policy on Wednesday, but the rhetoric may well be dovish. Markets expect to hear confirmation of the central bank's forecast for the most lenient monetary policy and allow for a change in the focus on the future.

It is possible to average inflation targeting. The Fed will push inflation above the 2 percent target and thus make up for years of missing the target.

The rise in nominal yields, which pushed the 10-year yield to a weekly peak of 0.63%, suggests that investors can "sell the fact" even if Fed Chairman Jerome Powell's rhetoric seems "soft" to them.

The US central bank may well present some kind of surprise, so a positive reaction from the dollar cannot be ruled out, although this is unlikely. The main drivers - the weak recovery of the US economy and the policy of financial officials - indicate a bearish trend forming on the dollar.

Recall that a weaker dollar makes US exports more competitive overseas. In addition, it helps multinational companies by making it more attractive for them to convert profits back into the national currency. This is good news for the rally in the US stock market, which has now slowed down.

Meanwhile, a weaker dollar could bring little short-term political gain to US President Donald Trump, who is seeking a second term in office. Trump said the currency's perennial rally is hurting American manufacturers. In order to "feed" this sector, it will take at least a year of dollar weakening. It's too long and the elections are in November.

A further decline in the dollar will be an undesirable event for Japan and European countries. Their national currencies will grow, threatening the pace of economic growth recovery and efforts to stimulate inflation.

The euro has already set its sights on conquering the 1.1800 mark in conjunction with the dollar, although there was a slight correction on Tuesday after a new resistance level of 1.1668–1.1680 had formed. However, the fall was on a small volume, and the euro exchange rate is still around highs. It is unlikely that anyone will dare to deny the existence of a strong local upward trend in the European currency, so preference should still be given to long positions.

EUR/USD

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