EUR / USD
On July 15, the EUR/USD pair lost about 30 pips, but this decline did not particularly affect the current wave counting. Thus, the instrument presumably remains within the framework of a wave 3 in 5 in C in B. If this is true, then the increase in quotes will resume in the near future with targets located near the level of 200.0% Fibonacci level. In any case, wave 5 in C in B does not look fully equipped yet.
Fundamental component:
The end of the trading week belongs entirely to Europe and the Euro. The ECB meeting ended yesterday, and the EU summit begins today. There was a lot of news from the ECB meeting, but almost all of them meant the absence of any changes. So the deposit and lending rates remained unchanged. PEPP and APP have not been expanded. Thus, the expectations of the markets were fully justified. No one expected any changes. Moreover, ECB President Christine Lagarde was also quite stingy with comments.
The only thing Lagarde drew attention to was the restoration of economic activity, which at the same time, remains at levels much lower than before the crisis and pandemic. The head of the ECB also announced that she expects the growth of key economic indicators in the third and fourth quarter. However, this event is already behind and, judging by the reaction of the markets, they were not particularly impressed. Now, all the attention to the EU summit. If the news is also neutral, for example, if no decision is made during the meeting, then there may be no market reaction. However, other options are possible.
For example, EU leaders will not be able to agree on a fund and, therefore, new negotiations on this issue will be required. The demand for the euro in this case can seriously decline, since without this package of assistance the economy can recover much harder and longer. However, extremely “optimistic” news came from the US today. The number of new cases of coronavirus per day exceeded 70 thousand. Until the forecast of the country’s chief epidemiologist Anthony Fauci (100 thousand a day) remains not so much.
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 level of 1.1570, which is equivalent to 200.0% Fibonacci, for each MACD up signal in the calculation to continue the construction of wave 5 in C in B.
GBP / USD
On July 16, the GBP/USD pair lost about 30 pips. The proposed wave of 2 to 5 is completed, thus, I believe that the tool has moved on to building wave 3 of 5 before a successful attempt to break through its minimum. If this is true, then upgrading the instrument will resume with targets located around 28 and 30 figures in the near future. A successful attempt to break through the low of wave 2 into 5 will indicate a possible complication of this wave and postpone the execution of the option with building wave 3 for some time .
Fundamental component:
The unemployment data was published in the UK on Thursday, which turned out to be much better than expected to see the markets. In particular, the unemployment rate did not increase in May, remaining at 3.9%. However, the demand for the British in recent days has still declined. During the day, markets can only pay attention to the statement of the Chairman of the Bank of England, Andrew Bailey.
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 level.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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