EUR / USD
On Monday, July 22, trading ended for EUR / USD with a 10 bp decline. Thus, the current movement of the pair fully confirms the intentions of the traders to continue building the downward trend.
A successful attempt to break through the minimum of the supposed wave 2 or b will once again confirm the readiness of the instrument for a further decrease. The news background for the euro-dollar pair on Monday and Tuesday is zero.
Unfortunately, there is simply nothing to pay attention to the markets – no news, no statements, no economic data. One can only note the statement of Donald Trump on Twitter that he reached an agreement with the leaders of Congress on the ceiling of the national debt and the country’s budget for 2020-2021.
The US dollar has reacted positively to these statements, and the markets are hoping that there will be no new “Shutdowns”. However, the US dollar even with the “shutdown” feels just fine to the great chagrin of Trump, who believes that the dollar is too “expensive”, and China and the European Union deliberately reduce the exchange rates of their currencies to have a more favorable position in trade with America.
Purchase goals:
1.1412 – 0.0% Fibonacci
Sales targets:
1.1106 – 100.0% Fibonacci
1.1025 – 127.2% Fibonacci
General conclusions and trading recommendations:
A pair of euro-dollar confirms readiness to build a downward trend. A breakthrough of the estimated minimum wave 1 indicates that the instrument is ready to build a downward wave 3. Thus, I recommend selling the pair with targets located near the levels of 1.1106 and 1.1025, which equals 100.0% and 127.2% Fibonacci .
GBP / USD
The GBP / USD pair went down on July 22 by 20 basis points, and each new decrease in the instrument reduces the chances of building the upward trend section with a starting point on July 17.
Wave e looks fully equipped, but the news background, unfortunately, does not take into account the wave pattern. If only negative messages continue to come from the UK, the market will succeed in breaking through the low of wave e, which will complicate this wave and the entire downward trend.
Today, in the UK, the name of the new prime minister of the country will be announced. It could either be Boris Johnson or Jeremy Hunt. It is difficult to say whether there will be a reaction of the forex market to the election results. Earlier, the pound sterling ignored the repeated resignations of ministers in the British Parliament, the care of Theresa May.
It is possible that there will be no excitement today. Traders, in the first place, are concerned about the changes to the “divorce” process between the EU and Britain, and not political changes inside the country. And with the “divorce” process, it is all difficult. Brexit without a deal will not be approved by parliament, so the new prime minister will most likely have to initiate parliamentary elections.
Sales targets:
1.2334 – 200.0% Fibonacci
1.2194 – 261.8% Fibonacci
Purchase goals:
1.2783 – 0.0% Fibonacci
General conclusions and trading recommendations:
The wave pattern of the pound-dollar instrument implies the completion of the construction of the downward wave e. Thus, I recommend small purchases of a pair with targets located around 28 figures and with an order that limits losses under the minimum of wave e, after the MACD signal goes up. I recommend to return to sales no earlier successful attempt to break through the minimum of wave e.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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