EUR / USD
On July 10, the EUR/USD pair gained about 15 basis points and thus continues the process of building the expected wave 5 in C in B. The entire wave 5 in C in B can be very long and complex, since at this time the markets are trading very chaotically. However, the current wave markup has not yet been canceled and will remain operational until a successful attempt to break the minimum of the assumed wave 4.
Fundamental component:
On Friday, there was little economic news from the United States and the European Union. Nevertheless, markets are still very seriously monitoring data on the incidence of coronavirus in the United States. The number of infected Americans is growing exponentially, at least 60 thousand new cases have been recorded daily in recent days. It should be noted that in Europe, it is still possible to restrain the spread of the COVID-19, so the situation there is now relatively calm, although there are reports of new non-large-scale outbreaks from time to time.
Nevertheless, it is America that is currently causing the greatest concern. The number of infections is growing more than in 33 states. In three states, hospitals no longer have enough beds for all patients requiring resuscitation. Country Chief Epidemiologist Anthony Fauci, who predicted +100,000 patients every day for two more weeks and claimed that the epidemic had gotten out of control, spoke again, saying that the world was only at the beginning of the epidemic, the virus had not gone away and had not weakened, and countries needed to take restraining measures.
And it is America that can be the first to face the consequences of the second wave. There may not be another “lockdown”, however, business and economic activity may begin again to seriously decline. The population, fearing for their health and lives, will not seek to go to work and lead an active lifestyle. Thus, instead of the economic recovery announced by Donald Trump, the United States may face a new drop in GDP and other indicators.
In addition, countries can be overwhelmed by the health crisis, since hospitals may simply not cope with the influx of patients. Everything that happens in the United States will clearly not help Donald Trump to be re-elected in November.
General conclusions and recommendations:
The euro/dollar pair presumably continues to build the rising wave C to B. Thus, I recommend buying the instrument with targets located near the calculated levels of 1.1406 and 1.1570, which equates to 161.8% and 200.0% Fibonacci for each signal “up” MACD calculated on the construction of wave 5 in C in B.
GBP / USD
On July 10, the GBP/USD pair gained another ten basis points, so the current wave counting has not changed at all. I still expect the building of upward wave 5 as part of the upward trend. The minimum goal of this wave is located near the wave peak 3 or C. On the other hand, a successful attempt to break through the level of 1.2816 will indicate the readiness of the markets for further buying the pound.
Fundamental component:
Nothing interesting happened again in the UK on Friday. The latest news is about a new UK economy program that the UK government has planned. There is no new information on negotiations with the European Union. There were no economic reports on Friday and Monday.
Thus, the current wave marking suggests the continuation of the construction of the upward trend section and the news background does not interfere with this yet, although the markets may at some point recall that there are not many reasons for buying the pound now. And even though information about the high degree of coronavirus infection in the United States seems more important for the markets now.
General conclusions and recommendations:
The pound/dollar pair has greatly complicated the current wave marking, which now involves the construction of a new upward wave. Therefore, I recommend buying the instrument at this time with targets near the levels of 1.2816 and 1.2990, which equates to the peak of wave 3 or C and 100.0% Fibonacci.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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