EUR / USD
On July 13, the EUR/USD pair gained about 40 basis points and thus, continues the process of constructing the alleged wave 5 in C in B, in particular its internal wave 3. Thus, the entire wave 5 in C in B can turn out to be very long and complex, because at this time, the markets are trading very chaotically. Nevertheless, the current wave marking has not yet been canceled and will remain operational until a successful attempt to break through the minimum of the assumed wave 4.
Fundamental component:
On Monday, there was still little economic news from the United States and the European Union. Most of the news was not about the economy, but about the coronavirus, which continues to rage in the United States. However, the information now already concerns the confrontation between Donald Trump and the Chief Virologist of the country, Fauci, who, in theory, should actively cooperate and cooperate with each other, instead, they do not even talk, not least because of Trump’s criticism of the epidemiologist. Meanwhile, the number of daily cases in America is growing.
The EUR/USD pair continues a rather quiet increase in accordance with the current wave marking and even a rather mediocre inflation reports in Germany (0.9% y / y in June and 0.6% m / m), the mood index in the business environment of the ZEW Institute (59.3) could not stop the markets from continuing the restrained purchases of the euro an index for assessing the current economic conditions of the ZEW Institute (-80.9), an index of economic sentiment in the European Union (59.6). All of these reports had higher market expectations.
The report on industrial production in the EU also turned out to be worse than market expectations and showed a decline of 20.9% yoy and an increase of 12.4% m/m. Thus, all the news from the European Union turned out to be worse and could not cause an increase in demand for the European currency.
Nevertheless, it is the euro that rises in the first half of Tuesday. Today, another report on inflation in the US is planned, the reaction to which is likely to be not much different from the reaction to the morning reports. Thus, for the time being, it can be noted that the markets consider the topic of coronavirus in the US more important than others, so the US dollar continues to decline.
General conclusions and recommendations:
The euro/dollar pair is supposedly continuing to build the upward wave C in 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 13, the GBP/USD pair lost about 85 basis points. Thus, it can be assumed that the construction of the internal correctional wave 2 as part of the future 5 upward trend section has begun. If this assumption is correct, then the increase in quotes will resume in the near future. If the current wave marking is correct, then the rising wave 5 does not look complete and fully staffed.
Fundamental component:
There was not much news in the UK on Monday. However, several very important economic reports came out on Tuesday, one of which, GDP in May m/m, showed an increase of 1.8% instead of + 5% expected by the market. The industrial production in the UK in May also fell short, but still met the expectations of the market. Nevertheless, it is believed that the decline in demand for the British in the first half of the day is logical. Let’s see what happens in the afternoon, when the report on inflation in America is released.
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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