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Forex Analysis & Reviews: Hot forecast for EUR/USD on July 31, 2024

Today's Federal Open Market Committee meeting is not only the day's main event, but it will also determine the dynamics of market developments for the entire month ahead. Everything will depend on the statements made by Federal Reserve Chair Jerome Powell. However, there is little doubt that Powell will almost explicitly announce the beginning of monetary policy easing in September this year, which will contribute to the U.S. dollar's prolonged weakness.

The volume of short positions on EUR/USD decreased after the pair reached the support level of 1.0800. As a result, there was a price rebound, followed by the pair's stagnation around the base of the corrective cycle. On the 4-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish bias persists in the market. Regarding the Alligator indicator on the same time frame, the moving average lines point downward, corresponding to a downward cycle. Expectations and Perspectives Today, speculators' main focus will be on the information flow, which will undoubtedly lead to increased volatility. As for technical analysis, the 1.0800 level will serve as support, enabling the euro to gradually recover relative to the current correction. The bearish scenario will come into play only after the price stabilizes below the 1.0800 level. Complex indicator analysis indicates a price rebound from the 1.0800 level in the short term. Indicators are reflecting a downward cycle in the intraday period.

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Forex Analysis & Reviews: Hot forecast for EUR/USD on August 1, 2024

The Federal Open Market Committee meeting results indicated a significant rise in the dollar, but it never happened. The market continues to stagnate despite statements from Federal Reserve Chair Jerome Powell. He explicitly mentioned the need to begin easing monetary policy. However, he did not specify when this process would start. Although there is no doubt that interest rates will be lowered as early as September, the market was generally prepared for this development. Furthermore, according to preliminary estimates, inflation in the eurozone accelerated from 2.5% to 2.6% instead of slowing down to 2.3%. This creates a precondition for the European Central Bank to slow down the pace of interest rate cuts, contributing to the single European currency's strength. In other words, these factors somewhat balanced each other out. Today, the focus will be on events unfolding in Europe. First, investors expect another interest rate cut from the Bank of England, which will support the U.S. dollar. Second, the eurozone is expected to see a sharp increase in the unemployment rate from 6.4% to 6.9%. Due to the scale of the change, this is likely to have the most significant impact. Therefore, despite Powell's statements yesterday, there are all the prerequisites for further strengthening of the dollar.


Despite a rich flow of information, the EUR/USD pair has not shown any speculative activity. The quote has formed a characteristic stagnation around the local low of the corrective cycle, as the support level of 1.0800 serves as a support. On the 4-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish sentiment persists in the market. Regarding the Alligator indicator on the same time frame, the moving average lines point downward, corresponding to a downward cycle. Expectations and Perspectives Subsequent price fluctuations within the 1.0800/1.0850 range are possible in this situation. When the price breaks out of either boundary of the established range, a major spike in speculative activity is expected.

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Forex Analysis & Reviews: Hot forecast for EUR/USD on August 2, 2024

Formally, it is reasonable for the dollar to strengthen. After all, the unemployment rate in the eurozone rose from 6.4% to 6.5%. However, the increase was not as substantial as expected since forecasts anticipated a figure of 6.9%. Nonetheless, unemployment still increased. And what's much more important is the Bank of England's decision to lower the base rate, which was also largely expected. So, it is not that surprising that the dollar has risen. However, the movement ended even before the unemployment data was published in the eurozone and a couple of hours before the BoE meeting outcome. This is what's surprising. It indicates excessive speculative pressure, fraught with the growth of imbalances, which are often corrected by sharp and sudden jumps. Today, a slight weakening of the dollar is likely influenced by the contents of the United States Department of Labor's report. Primarily, this concerns the number of new jobs created outside of agriculture. There are expected to be only 190,000 new jobs, which is the most optimistic forecast. However, considering demographic dynamics, approximately 250,000 new jobs need to be created monthly to maintain labor market stability. However, only 532,000 new jobs were created over the last three months. This indicates further growth in unemployment and the inevitability of interest rate cuts, which will undoubtedly put pressure on the U.S. dollar.

The EUR/USD pair extended the current corrective cycle while the market strengthened its positions on the dollar, breaking through the support level at 1.0800. On the 4-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish sentiment persists in the market. Regarding the Alligator indicator on the same time frame, the moving average lines point downward, consistent with the downward cycle. Expectations and Perspectives Based on the euro's local oversold status, the current downward cycle could be interrupted, leading to an attempt to accumulate long positions. However, the main trigger for today will be the information flow, particularly the report from the United States Department of Labor. Thus, technical analysis is relegated to a secondary role.


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Forex Analysis & Reviews: Hot forecast for EUR/USD on August 5, 2024

Of course, everyone was expecting some gradual deterioration in the state of the American labor market. But nobody could have nightmares about what happened last Friday. First and foremost, the unemployment rate jumped from 4.1% to 4.3%, which was expected to remain unchanged. Furthermore, only 114,000 new jobs were created in the non-agricultural sector instead of the forecasted 190,000. Moreover, previous data was revised downward from 206,000 to 179,000. Clearly, unemployment will continue to rise. After that, the media started to say there would be no soft landing on the American economy, and everything would turn into a deep recession. Accusations immediately started flying at the Federal Reserve, which allegedly delayed the beginning of monetary policy easing too long. Rumors quickly spread that at the September meeting of the Federal Open Market Committee, the interest rate would be reduced not by 0.25% but by 0.50%. Against this backdrop, the dollar naturally began to fall rapidly. Considering that there is now active discussion about the need to reduce interest rates by even 0.75%, the dollar will remain under pressure and is likely to weaken even further.

Amid the information and news flow, the volume of long positions in the euro significantly strengthened. As a result, the EUR/USD pair almost fully recovered relative to the recent corrective move. Due to speculative price movements, the RSI indicator reached the overbought zone in the 4-hour chart, indicating an excessive number of long positions. Regarding the Alligator indicator on the same time frame, the moving average lines point upwards, corresponding to an upward cycle. Expectations and Perspectives From a technical perspective, there is a local overheating of long positions in the euro, which allows for the formation of a pullback. As for the next stage of growth, testing the local high of July is necessary. In this case, breaking through the psychological level of 1.1000 is possible. Complex indicator analysis signals a pullback in the short term. The indicators point to an upward cycle in the intraday period.

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Forex Analysis & Reviews: Forecast for EUR/USD on August 6, 2024

EUR/USD Yesterday's market panic had almost subsided by this morning. Monday did not turn out to be a "black" day. The S&P 500 plummeted by 4.71%, closing at -3.00%. Good ISM figures supported the market: business activity in the non-manufacturing sector strengthened from 49.6 to 54.5 in July, and the employment index rose from 46.1 to 51.1 against an expectation of 46.4. However, the cunning euro buyers we mentioned in our last review chose a bad moment for their action. Market participants did not believe in their notions of a fourfold rate cut by the end of the year, specifically a double decrease of 0.5% each. We saw a similar pattern last November when investors anticipated a sixfold rate cut for the current year, but then the euro fell by 4.5 figures.

After reaching the target level of 1.1010, the price is now ready to form a divergence with the Marlin oscillator on the daily chart. If the pair closes the day below the July 17th peak of 1.0949, the likelihood of the price returning to 1.0905 and attempting to consolidate below this level will significantly increase.

The target level of 1.1018, which we highlighted on the weekly chart, no longer needs to be met with absolute precision unless it is to continue the rise above 1.12.

The price is consolidating below the resistance at 1.0964 in the 4-hour chart. Marlin is striving to exit the overbought zone. If the price consolidates below the level of 1.0905 in this time frame, it will also mean settling below the MACD line on the weekly chart. We're waiting for the market to cool down and form more stable signs of reversal and decline.

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Forex Analysis & Reviews: Hot forecast for EUR/USD on August 7, 2024

The market is set on further weakening of the dollar. Even the extremely disappointing data on retail sales in the eurozone, which slowed from 0.5% to -0.3%, did not provide any notable support to the US dollar. Overall, the market continues to be governed by rumors and expectations regarding the Federal Reserve's actions. Investors still believe the US central bank will immediately lower interest rates by 0.50%. Furthermore, there is speculation about a possible emergency meeting of the Federal Open Market Committee. The dollar will remain under pressure if all this noise does not settle.

During the corrective phase, the EUR/USD pair locally fell almost 100 pips from the 1.1000 level. This movement still fits within the tactical component of the upward cycle. In the 4-hour timeframe, the RSI indicator reflects behavior similar to the price on the trading chart. Initially, the indicator entered the overbought zone, which coincides with the price reaching the 1.1000 level. Afterward, the indicator returned to the 50/70 zone, indicating a pullback. Regarding the Alligator indicator on the same time frame, the moving average lines point upwards, corresponding to an upward cycle. Expectations and Perspectives In this situation, the corrective phase is still relevant in the market. However, if by the end of the day there is no stabilization of the price below 1.0900, it can be assumed that the correction is ending. This could lead to a potential increase in the volume of long positions and a gradual recovery of the euro. The comprehensive indicator analysis signals a correction in the short-term and intra-day periods.

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Forex Analysis & Reviews: From sell-off to gains: stock indexes show positive dynamics

Markets recover from sharp decline The S&P 500 and Nasdaq jumped 1% on Tuesday, showing a strong recovery from the recent sell-off. Investors began to actively buy stocks again, inspired by positive comments from Federal Reserve officials, which eased fears about a possible recession in the U.S. Global growth and a return to risk Equally on the day, stocks around the world began to recover from the aggressive declines the previous day. Amid this gain, U.S. Treasury yields increased and the dollar strengthened. Investors have returned to buying riskier assets despite lingering concerns about an economic slowdown. Cooling Optimism The Dow Jones Industrial Average also showed positive dynamics, but, like other major indices, it fell by the end of the trading day, falling short of the daily highs. This shows some caution among market participants despite the overall improvement in sentiment. Fed calms markets U.S. Federal Reserve officials issued statements rejecting the view that weak July employment data points to an approaching recession. However, they warned that lowering interest rates may be necessary to prevent a possible economic slowdown. Rate cuts likely Amid weak economic data, stocks were under pressure, fueling fears of a U.S. recession. According to CME Group's FedWatch tool, traders are pricing in the likelihood of a rate cut at the next meeting in September, with 75% expecting a 50 basis point cut and 25% expecting a 25 basis point cut. S&P 500 Sectors Advance: The Day's Top Performers All of the major sectors of the S&P 500 ended the day higher, with real estate and financials leading the way. Tech company Nvidia was a particular highlight, jumping nearly 4% to lead the gains for the S&P 500 and Nasdaq. Investors Return to the Market "The market has been oversupplied, but there's a significant recovery happening, particularly in the Nasdaq. Investors are starting to believe again that lower interest rates will be good for stocks," said Rick Meckler, a partner at Cherry Lane Investments, a family-owned investment firm in New Vernon, N.J. Indices Are Rising The Dow Jones Industrial Average gained 294.39 points, or 0.76%, to 38,997.66. The S&P 500 gained 53.7 points, or 1.04%, to 5,240.03, and the Nasdaq Composite gained 166.77 points, or 1.03%, to 16,366.86. The Impact of Artificial Intelligence The Nasdaq Composite has risen 9% in 2024, helped by strong earnings and a bullish outlook for AI. However, as Meckler noted, "while recent earnings have been good, they have fallen short of expectations in many cases." Market valuations remain high, with the S&P 500 trading at 20 times trailing 12-month earnings, according to LSEG, well above the long-term average of 15.7. Expectations and Risks Amid unexpected developments such as the Bank of Japan's recent rate hike, investors have begun to unwind the yen-denominated financing that has been used to buy stocks for years. This has added to market uncertainty and left many wondering about the outlook. Awaiting Powell's Speech One of the key events investors are watching is Federal Reserve Chairman Jerome Powell's speech at a symposium in Jackson Hole, Wyoming, scheduled for August 22-24. His words could influence future market moves and provide insight into the future of monetary policy. Uber and Caterpillar Succeed Uber shares soared 11%, beating Wall Street's second-quarter revenue and profit expectations. The company was able to show solid growth thanks to strong demand for its ride-sharing and food delivery services. Meanwhile, Caterpillar shares rose 3% as the company also beat analysts' forecasts despite weaker demand in North America. Rising prices for heavy equipment such as excavators helped offset those losses. Trading Activity on the Rise Trading volume on U.S. stock exchanges totaled 13.52 billion shares, above the 20-day average of 12.48 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 2.59-to-1 ratio, while the Nasdaq saw a 1.93-to-1 ratio. Highs and Lows The S&P 500 posted 12 new 52-week highs and seven new lows, while the Nasdaq Composite posted 31 new highs and 144 new lows. These figures highlight the continued volatile market, with gains and losses alike. Oil Prices Rebounding Oil prices also edged higher after falling to multi-month lows on Monday. Investors' attention has shifted to supply-side concerns, which, along with a recovery in financial markets, has eased concerns about future energy demand. Nikkei recovery: relief after collapse Tokyo's Nikkei index rose 10%, providing some relief after its 12.4% plunge on Monday. The drop was the biggest one-day sell-off in Japan since Black Monday in 1987, causing global investor jitters. Fed: Slowdown, not recession U.S. Federal Reserve officials on Monday dismissed speculation about a recession despite weak employment data for July. San Francisco Fed President Mary Daly stressed that current data suggest the economy is slowing, but not collapsing. She noted the importance of preventing a labor market crisis. Global Markets Rise The MSCI index, which tracks shares around the world, rose 8.91 points, or 1.17%, to 770.99, off its daily high of 777.81. That followed a more than 3% drop on Monday, marking the third straight day of losses for the global market. European Markets Volatility Europe's STOXX 600 index ended the session up 0.29%, despite earlier volatility, when it fell 0.54%. That underscores the nervousness among European investors trying to adjust to rapidly changing market conditions. FX Market Jitters On the FX front, the dollar strengthened against its major counterparts, while the Japanese yen hit seven-month highs against the US dollar. Some of the more dramatic moves of recent days have eased, and markets are beginning to feel a sense of calm again. Dollar Strengthens Amid Currency Volatility The dollar index, which tracks the dollar against major currencies including the yen and euro, rose 0.07% to 102.94. Against the Japanese yen, the dollar gained 0.4% to 144.74, while the euro weakened 0.2% to $1.093. U.S. Treasury Yields Rise U.S. Treasury yields rose as fears of a potential recession in the country proved overblown, dampening demand for safe-haven U.S. bonds. The 10-year yield rose 12 basis points to 3.903%, while the 30-year yield rose 12.1 basis points to 4.1924%. The yield on 2-year bonds, which often react to changes in interest rate expectations, also rose to 3.9936%. Oil prices recover Oil prices have stabilized after falling on Monday. U.S. crude rose 0.36% to $73.20 a barrel, while Brent crude ended the trading session at $76.48 a barrel, up 0.24% from the previous day. Precious Metals: Gold Loses Ground With the dollar strengthening and bond yields rising, precious metals prices fell. Spot gold fell 0.82% to $2,387.88 an ounce. U.S. gold futures also fell 0.37% to $2,392.70 an ounce. However, expectations of a U.S. interest rate cut in September and ongoing tensions in the Middle East limited gold's losses, maintaining its appeal as a safe haven asset.


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Forex Analysis & Reviews: Hot forecast for EUR/USD on August 9, 2024

Despite slightly increased volatility, the situation in the currency market remains generally unchanged. The dollar continues to trade around the levels reached in the middle of the week. This situation will likely not change until the middle of next week. Investors are waiting for inflation data from the United States, which will provide an answer to the question of the Federal Reserve's next steps. Moreover, Fed officials are trying to calm the markets by stating that inflation targets have still not been met, implying that no rapid easing of monetary policy should be expected. From this, it can be assumed that a reversal will begin mid-next week, and the dollar will noticeably strengthen.

The volume of short positions on the EUR/USD pair decreased after touching the support level of 1.0900, which led to a retracement, even though the price locally breached the level. On the 4-hour chart, the RSI indicator was temporarily below the average level of 50 but then returned above it. This movement indicates a decline in the volume of short positions. Regarding the Alligator indicator on the same time frame, two of three MA lines are intertwined, indicating a stagnant phase. Expectations and Perspectives The price must settle below 1.0900 by the end of the week to support the correction. Otherwise, the level will continue to act as support, which could lead to the price fluctuating within the range of 1.0900/1.0950. The comprehensive indicator analysis signals a stagnant phase in the short-term and intra-day periods.


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Forex Analysis & Reviews: Forecast for EUR/USD on August 12, 2024

On the weekly chart, the price consolidated above the MACD indicator line. The probability of a retest of the target level of 1.1010 or reaching 1.1043 has slightly increased. At the same time, we observe the formation of a very extended wedge on the Marlin oscillator.

Long wedges rarely precede strong, sustained movements; however, the price is clearly on the brink of significant changes that could take it out of the prolonged range of 1.0636-1.1010. If the price breaks below this range, the target levels are 1.0369 and 1.0173.

On the daily chart, the price struggles with the support at 1.0905, aided by divergence with the Marlin oscillator. Therefore, a weekly close in the form of a Doji could also be a false signal. A daily close below the 1.0905 level would indicate the development of the main bearish scenario. After all, the opening of a new weekly candle occurred below the MACD line.

On the 4-hour chart, the price is currently moving above the balance indicator line (red moving average). If the price consolidation above 1.0905 continues, the balance line will be above the price. The signal line of the Marlin oscillator is moving sideways in negative (descending) territory, which increases the likelihood of the price dropping below support in this time frame. Moving below the MACD line (1.0877) would confirm the price's intention to reach the 1.0788 target.

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Forex Analysis & Reviews: Forecast for EUR/USD on August 13, 2024

The euro's consolidation above 1.0905 continues. Yesterday's session closed with a white candlestick, so formally, the probability of the price moving above 1.1010 has slightly increased. However, the price has yet to climb above 1.0964, and the Marlin oscillator continues to apply downward pressure through technical divergence.

On the 4-hour chart, the price is moving along the balance line, highlighting the situation's neutrality. The Marlin oscillator has approached the zero line.

A drop in price below the 1.0905 support would be significant, indicating a potential development of a downward, likely medium-term movement. A shift in the quote below the MACD line, beneath the 1.0888 mark, would confirm this

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