EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the US currency after the second rebound from the correction level of 50.0% (1.1278) and consolidation under the Fibo level of 38.2% (1.1238). As a result, the fall in prices on July 17 may be continued in the direction of the next correction level of 23.6% (1.1187). Yesterday, the US currency was in demand again. Retail sales in America in June increased by 0.4% and excluding car sales – also by 0.4%. Forecasts were below. I wonder if this economic report will be one of the few positive over the past month and a half and whether the recession will continue in America. Although it should be noted that the last NonFarm Payrolls showed a very strong increase. Inflation is “lame”, but in the European Union, inflation is not just “lame”, it is “crawling”. Today, the consumer price index in the European Union for June will be published. Based on forecasts, the foreign exchange market does not expect an increase in inflation. Most likely, we will see a value of +1.2% and +1.1% for core inflation. If the reports from America will be positive in the future, the Fed may abandon the idea of reducing the rate. Although, most likely, it will still be lowered “for prevention.” Then the question is: will this decrease be the only one in 2019? But it will depend on economic indicators.
The Fibo grid is built on extremums from March 20, 2019, and May 23, 2019.
Forecasts for EUR/USD and trading recommendations:
The currency pair EUR/USD has completed the closing under the retracement level of 38.2% (1.1238). I recommend selling the pair with the target at 1.1187, with the stop-loss order above the level of 1.1238. I recommend buying the pair with the target at 1.1238 and stop-loss order under the level of 1.1187 if the rebound from the correction level of 23.6% is performed.
GBP/USD – 4H.
The GBP/USD pair, without any signal, performed a reversal in favor of the US dollar and consolidation under the correction level of 100.0% (1.2437). In the end, the fall of quotations of the pair pound/dollar may continue today in the direction of the next resistance levels of 127.2% (1.2184). The MACD indicator is brewing bullish divergence. The formation of this divergence will allow traders to count on a reversal in favor of the pound sterling, closing above the Fibo level of 100.0% and some growth towards the level of 76.4% (1.2661). Much to the chagrin of the pound, news and economic data from the UK continue to push it down. Even in those days when there are no visible reasons for the fall, the English currency is not insured against them. Yesterday, it became known that wages in the UK in May increased by 3.4%, and excluding premiums – by 3.6%, which is higher than the expectations of the Forex market. However, the pound failed to show growth but instead fell below the level of 100.0%, which for some time kept the pair from falling again. Today, the inflation report for June will be released with a forecast of 2.0%, and it is even difficult to predict what will be the reaction of traders to this report. As long as the pair is trading under the correction level of 100.0%, it is preferable to further fall of quotations.
The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the pair pound/dollar consolidate under the correction level of 127.2% (1.2430). Thus, the fall can be continued in the direction of the next correction level of 161.8% (1.2334). There are no emerging divergences on the current chart. Closing the pair’s rate above the Fibo level of 127.2% will work in favor of the English currency and some growth in the direction of the correction level of 100.0% (1.2506).
The Fibo grid is based on the extremes of June 18, 2019, and June 25, 2019.
Forecast for GBP/USD and trading recommendations:
The currency pair GBP/USD consolidates under the correction level of 127.2%. Thus, I recommend selling the pair with the target at 1.2334, with the stop-loss order over the level of 1.2430. I recommend buying the pair with the target of 1.2506 if the closing above the Fibo level is 127.2% and with the stop-loss order under the level of 1.2430 (hourly chart).
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