EUR/USD
On July 22, the euro/dollar pair gained about 45 basis points. Thus, the increase continued and the wave 3 in 5 in C in B is taking a very long form. The current wave markup has not changed at all in recent days, because the euro is constantly growing. A successful attempt to break the 200.0% Fibonacci level indicates that markets are ready for new purchases of the single currency.
Fundamental component:
The single currency is still in high demand in the Forex market. At the same time, the US dollar is losing its popularity. However, the euro/dollar pair continues rising. I would like to list the factors and reasons for such a strong rise of the euro. Such an event was last recorded long ago. The euro’s jump was not triggered by macroeconomic reports, Fed’s or ECB’s actions, changes in monetary policies, geopolitical changes, etc.
The euro is gaining in value, because the US epidemiological situation is shocking the whole planet. After all, the US is one of the most developed and technological countries with the largest GDP in the world. However, the coronavirus epidemic may set it back into the past. The first wave of diseases in the country ended. However, unlike the European countries the US immediately faced the second one.
Now US logs 60-70 thousand new virus cases. And most importantly, there are 1,000 or more deaths a day. It is clear that people die for many reasons and the same complications from the ordinary flu also cause a large number of deaths. However, the problem is that there is a cure for the flu, and the virus itself cannot infect the whole country. But there is no medicine or vaccine against the coronavirus. Therefore, it can easily infect the country or most of its population.
Thus, the consequences are obvious. US President Donald Trump continues to make statements that are very difficult to understand. The President said that the coronavirus would not cause much harm to the United States. According to Trump, the death rate from the coronavirus in the United States is one of the lowest in the world, although many other sources indicate the opposite. In general, in such conditions, demand for the US currency will hardly move up.
Conclusions and recommendations:
The euro/dollar pair continues to build upwards wave C and B. Thus, I recommend buying the trading instrument with targets located near the level of 1.1827, which is equal to 261.8% of Fibonacci.
GBP/USD
On July 22, the pound/dollar pair did not gain a single pip. However, the current wave layout has not changed and still assumes the construction of an upward wave of 3 in 5. Dynamic of the British pound is not as strong as that of the euro. I suppose that the currency pair will go on advancing.
Fundamental component:
There is very little news in the UK during the current week. Yesterday, it was reported that London and Brussels are unlikely to reach an agreement on Brexit. Today, it became known that the UK industrial orders fell by 46% in July. Actually, this news has a negative influence on the pound sterling. Nevertheless, markets continue to buy the British currency. The wave’s markup continues to remain in force.
Conclusions and recommendations:
The pound/dollar pair has complicated the current wave markup, which now involves building of an upward wave. Therefore, I recommend buying the instrument at this time with targets located around the 1.2816 and 1.2990 levels, which is equal 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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