Daily Market Analysis from ForexMart

Trading recommendation for EUR/USD on July 13, 2021

Looking at the EUR/USD trading chart, one can see the amplitude price movement within the resistance area of 1.1880/1.1895, as if there is a cumulative effect in the market before a new round of acceleration.

Sell signal
Traders will consider this if the price is kept below the level of 1.1835, which will open the way to the support level of 1.1800.

Buy signal
Traders will consider this if the resistance area of 1.1880/1.1895 is broken, which will lead to further formation of a correction. In this case, there is no need to rush. We consider buying positions above the level of 1.1900, with a prospect of 1.1950-1.2000.

* The resistance level is the so-called price level, from which the quote can slow down or stop the upward movement. The principle of constructing this level is to reduce the price stop points on the history of the chart, where the price reversal in the market has already occurred earlier.

* The accumulation process is a price fluctuation in a closed amplitude, where at the moment of a breakdown of a particular stagnation border, a local acceleration in the direction of breakdown often occurs.

Trading recommendation for GBP/USD on July 13, 2021

As for the trading chart of the GBP/USD, it shows the price movement within the deviation of the level of 1.3900, where market participants still view it as resistance.

Sell signal
They have been considered by traders since yesterday, where sell positions may have already been opened. If no deals have been opened, it is advised to wait for the price to hold below the level of 1.3835. The prospective target is 1.3785-1.3750.

Buy signal
It is considered by traders as a prolongation of the existing correction, but entering the market will be possible after the price holds above the level of 1.3950, with a prospective target of 1.4000.

What is reflected in the trading charts?

A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each individual candle in detail, you will see its characteristics of a relative time period: the opening price, the closing price, the maximum and minimum prices.

Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.

Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.

The up/down arrows are the reference points of the possible price direction in the future.

Things to remember:
Golden Rule: It is necessary to figure out what you are dealing with before starting to trade with real money. Learning to trade is so important for a novice trader since the market will exist tomorrow, next week, next year, and the next decade.

Forecast for EUR/USD on July 14, 2021

The euro fell by 83 points on Tuesday, which created some ambiguity in the technical interpretation of this movement.

The high rate of decline, due to which the Marlin oscillator slowed down with a decline, on the one hand, forms a double convergence on the daily chart, on the other hand, the signal line of the oscillator has approached the lower border of its own channel and is preparing to overcome it.

Here, theoretically, convergence may develop, for which the price needs to reach the March low of 1.1705, but the oscillator may continue to develop in the global descending channel, and then the price may reach the target level of 1.1465 and even 1.1300. But we consider this scenario as the main one. Thus, yesterday's low at 1.1772 is a signal level - price drift below it opens the target at 1.1705. Further movement to 1.1640 is possible.

No peculiarities observed on the four-hour chart, there are no reversal signals, the price is below the balance and MACD lines, and Marlin develops a decline. We are waiting for the price at the nearest target level of 1.1705.

Analysis of transactions in the EUR / USD pair

A signal to buy appeared in the market on Wednesday, but it had to be ignored because it came when the MACD line was at the overbought area. And even if bearish traders set up short positions, EUR / USD did not go down, causing losses to investors.

Trading recommendations for July 15

Despite the disappointing report on industrial production, euro continued to rise on Wednesday, as traders were skeptical about the latest statements of Fed Chairman Jerome Powell. In his speech, Powell hinted that the central bank will continue to adhere to a super-soft policy, which resulted in the weakening of the US dollar.

Today, Italy will publish a report on CPI, but it is unlikely to affect the market very much. But the labor market data from US will be a driver for dollar growth, especially if the figure turns out much better than expected. There will also be another speech from Fed Chairman Jerome Powell, but it may not add a significant effect on the market.

For short positions:
Open a short position when euro reaches 1.1819 (red line on the chart), and then take profit at the level of 1.1773. A decline will occur if Italy releases a weak inflation data, and if US publishes a strong labor market report. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1838 and 1.1876, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.1819.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

Analysis of transactions in the GBP / USD pair

Several market signals appeared on Wednesday, but only one was successful. In fact, the first one, which was to buy, had to be ignored because it came when the MACD line was way above zero. Fortunately by afternoon, a signal to sell was formed, and it coincided with the MACD line being in the overbought area. Such led to a significant drop in GBP / USD.

Trading recommendations for July 15

Pound rose on Wednesday, thanks to better-than-expected data on UK inflation. And if the employment report today indicates another good performance, GBP / USD will surely continue its growth in the market. But in the afternoon, price may pull back slightly, if US releases a similar strong report on its labor market. There will also be another speech from Fed Chairman Jerome Powell, but it may not significantly affect the market.

For long positions:
Open a long position when pound reaches 1.3847 (green line on the chart), and then take profit at the level of 1.3890 (thicker green line on the chart). Demand will increase if UK releases strong growth in the labor market. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3825 and 1.3780, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.3847.

For short positions:
Open a short position when pound reaches 1.3825 (red line on the chart), and then take profit at the level of 1.3780. A decline may occur if UK releases weak data on employment. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3847 and 1.3890, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.3825.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

Investors abandon weakening USD

According to data from July 13, the inflation rate in the United States reached 5.4%, a reading last seen in the 2008 crisis. However, the Fed stubbornly insists that such a high indicator will not last long. The time will come and they will no longer need to print money in such big volumes. Besides, interest rates will be raised sooner or later. According to most analysts, the first hike of the key rate may take place in December next year. However, it is quite difficult to make long-term forecasts as everything may change, especially since tightening monetary policy is not such an easy task. The same situation occurred in 2008 when the world economy was in the stage of recession, although not as significant as today. Back then, the Fed raised the interest rates only six years later. This is why economies believe that the tightening of the monetary policy will take place in 2023, that is, only three years after the start of easing it.

Although the US economy is recovering the losses incurred during the quarantine restrictions and the market is obviously reviving, the economy is still too weak. It is reflected in both the US currency and on the yield of government bonds. It would be extremely naive to hope that big changes could occur in the coming months. Imported goods in the United States rose by 11.3%, which is why prices for consumer goods are also likely to grow. Interestingly, there are rumors that the real inflation rate in the country is several times higher than the official figures.

The US currency declines not only due to a shaky economy but also because of an excess of money in the financial system. The money-printing press simply devalues it. Traders are not ready to invest in bonds that are not able to cover even half of inflation. Bearish sentiment is also swept across the bond market. As with the US dollar, the government bonds are now unpopular due to the fact that they continue to be issued in an unlimited amount.

In the light of such events, demand for riskier assets is buoyant as traders simply do not have other options for investing. In search of profitable investments, many have now turned to the stock market, so we can expect new peaks from the main indices. According to the most modest estimates, stocks may jump by 12-15% in the coming months. Apparently, the biggest gainers are still the technological and biotechnological sectors, as well as the real estate sector. Venture capital investments have also reached unprecedented amount. Experts are quite curious to see how central banks will stop this wave without collapsing the markets at the same time.

Against the background of rising prices, gold, which has always been an asset that protects traders from inflation, is rapidly recovering. As for oil, it is also steadily rising in value. As the US economy is getting back to normal, demand for commodities increases as well. Yet, the US dollar is gradually sliding down.

Analysis of transactions in the EUR / USD pair

Several market signals appeared on Friday. The first one, which was to sell, came at the time that the MACD line was going down from zero. However, it did not manage to produce a large downward movement, so the deal ended with a loss. All other signals appeared when the indicator was in the overbought or oversold area, so it was necessary to open positions in the opposite direction.

Trading recommendations for July 19

Data released last Friday did not affect the markets very much. In fact, even though the US released a strong retail sales report, euro did not succumb to a bear market.

Today, trading should be quite calm, as there are no important statistics to be released. Upcoming statements from the Bundesbank, as well as housing data from the United States are unlikely to shake EUR / USD. Most likely, the pair will just remain in a horizontal channel.

For long positions:

Open a long position when euro reaches 1.1815 (green line on the chart), and then take profit at the level of 1.1849 (thicker green line on the chart). Demand will increase if the European Central Bank announces that it would reconsider winding down measures to support the economy. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1799 and 1.1773, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.1815.

For short positions:

Open a short position when euro reaches 1.1799 (red line on the chart), and then take profit at the level of 1.1773. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1815 and 1.1849, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.1799.

Analysis of transactions in the GBP / USD pair

Several market signals appeared on Friday, but not all of them were as profitable as expected. The first one, which was to sell, managed to push GBP / USD down by 25 pips, but failed to bring the price to the target level of 1.3780. A similar story happened in the afternoon, but it was only on the third attempt that pound managed to hit 1.3780. All in all, the downward movement was around 40 pips. Then, at 1.3842 a signal to buy appeared, but it did not bring much profit.

Trading recommendations for July 19

Upcoming statements from the Bank of England could shake the markets today. In fact, just last week, several members changed their position, saying that the central bank now needs to reconsider scaling back support measures for the economy. If similar statements are announced today, pound will rise very sharply. Then, in the afternoon, there will be a report on the US housing sector, but it is unlikely to affect the market very much.

For long positions:

Open a long position when pound reaches 1.3769 (green line on the chart), and then take profit at the level of 1.3837 (thicker green line on the chart). But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3694, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.3769.

For short positions:

Open a short position when pound reaches 1.3743 (red line on the chart), and then take profit at the level of 1.3694. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3837 and 1.3769, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.3743.

Simplified wave analysis and forecast for USD/JPY and USD/CAD on July 20

USD/JPY

Analysis:
Analysis of the chart structure of the main pair of the Japanese yen shows that a hidden downward correction ended in the dominant wave of the bullish trend on July 8. The subsequent ascending wave structure has a reversal potential. The middle part (B) is nearing completion.

Forecast:
Today, the pair's price fluctuations are expected in the range between the opposite zones. In the first half of the day, pressure on the support zone is likely. By the end of the day, you can expect a change in the vector and a price rise to the resistance area.

Potential reversal zones
Resistance:
- 109.70/110.00
Support:
- 109.00/108.70

Recommendations:
Trading on the yen market today is possible only within the framework of individual trading sessions in a fractional lot. Purchases from the support zone are more promising.

USD/CAD

Analysis:
The direction of the short-term trends of the Canadian dollar since the spring of last year is set by the descending wave algorithm. Since March 18, the price has formed a correction in the form of a stretched plane. The quotes have reached the boundaries of a powerful reversal zone of the higher timeframe. However, there are no signals of an early reversal on the chart.

Potential reversal zones
Resistance:
- 1.2820/1.2850
Support:
- 1.2730/1.2700

Recommendations:
In the coming day, the upward course of the price movement is expected to continue. A short-term decline to the settlement support is not excluded at the European session. Then you can count on the formation of a reversal and a change in the short-term trend.

Forecast:
There are no conditions for selling the Canadian dollar on the market today. Short-term sales with a reduced lot are possible from the support zone.

A small pullback should not be misleading, sell-off of risks will continue. Overview of USD, CAD, JPY

The markets slightly recovered after a sharp decline on Monday, but there are no special reasons for a positive return.

News regarding the coronavirus is disappointing. According to the head of the US Centers for Disease Control (CDC), 83% of new cases in the US are associated with the Delta strain, compared with 50% a week earlier, and if the trend towards a worsening of the situation continues, another package of restrictive measures may be required. These fears increase the flight from risk.

The tension was supported by the Bank of Australia. The minutes of the RBA published yesterday noted that the economic results are still far from meeting the Bank's inflation and employment target, and therefore, the arguments in favor of maintaining the procurement program at the level of $ 5 billion per week remain. Moreover, the RBA provoked the situation through the media, suggesting that if the current restrictions in Sydney and the Victoria District last until August, the Bank will have arguments in favor of canceling the July decision to reduce the volume of purchases. This decision is also in favor of an increase in demand for protective assets.

It can be assumed that the demand for protective assets will dominate in the coming days again, and the US dollar will continue to rise against commodity currencies.

USD/CAD

After the Bank of Canada's meeting last week, where it left monetary policy unchanged (a decline in purchases from $ 3 billion to $ 2 billion per week was expected and confirmed), no significant macroeconomic events occurred. The rate hike is expected in the second half of 2022, which is around the same time as the forecast for the Fed rate. There was no harsh reaction to the improvement in the economic situation, which somewhat disappointed the bulls. It seems that BoC will adhere to cautious positions and does not intend to be the first to make poorly calculated steps.

The net long position on CAD fell by 1.2 billion during the reporting week. This is quite a deep adjustment. And although the advantage remains for the Canadian dollar (+2.1 billion), the trend is clearly not in its favor. The estimated price rises.

The Canadian dollar passed the resistance level of 1.2626 almost without stopping, not giving any reason to wait for a decline. Thus, the movement to the next target of 1.3010/20 is justified. The need for a correction may interfere since the spot price has gone significantly higher than the calculated one, but it is logical to use any decline for purchases.

USD/JPY

The nationwide core consumer price index rose by 0.2% y/y in June. This is the second month above zero and the growth slightly exceeded the forecast. For Japan, which has been suffering from deflation for several decades, even such minimal growth is already positive.

However, it is clearly too early to be optimistic. On August 20, data for the base year 2020 will be published. There will be new significant factors, which will reduce the inflation index by 0.2% according to the calculations of Mizuho Bank; hence, a slight downward shift is expected. This means that the Bank of Japan's plans to disperse inflation to 2% remains a dream.

The seemingly positive dynamics in the corporate prices and import prices, which showed +2.3% in June – the maximum since 1981, will not help either. The reason here is almost exclusively in the growth of oil prices, and since the growth of consumer incomes remains consistently low, there is no need to wait for inflation growth.

In other words, there are no signs that the Bank of Japan can follow other central banks to consider measures to exit from the super-soft policy.

Japanese yen's net short position declined by 1.456 billion. The demand increased amid a flight from risk. The estimated price is confidently turning down after a long period of stagnation.

July 22 economic calendar:

Today, the results of the planned meeting of the European Central Bank (ECB) will be released, where market participants are anticipating new information on the prospects for EU's monetary policy.

It is clear that there will be no fundamental changes, so most traders are not waiting for the results of the meeting, but for the press conference of the ECB President Christine Lagarde, where the ECB's plans for the future can be announced, as was recently done by the Federal Reserve System (FRS).

In this case, it is worth carefully monitoring the information from the meeting, as well as from the press conference, since a speculative jump will be set in the market depending on it.

So, if the ECB leaves everything as it is (unchanged), then the US dollar can get support again. But if the head of the ECB repeats the path of the Fed and announces an early increase in the refinancing rate, then the euro will go into a growth phase.

ECB meeting results - 11:45 00 Universal time

ECB President press conference - 12:30 Universal time

During the US trading session, America will release its weekly data on applications for unemployment benefits, where they are predicted to reduce their volume.

Volume of initial applications for benefits may fall from 360 thousand to 350 thousand.
Volume of repeated applications for benefits may fall from 3,241 thousand to 3,100 thousand.

Weekly data on applications for unemployment benefits - 12:30 Universal time.

In simple terms, a decline in the number of applications for benefits can lead to a strengthening of the national currency – USD.

Trading recommendation for EUR/USD on July 22, 2021

Looking at the EUR/USD trading chart, one can see price fluctuations along the level of 1.1800, where the accumulation process of trading forces is already taking place. The existing amplitude may well expand by 25-30 points, which will eventually lead to a new round of acceleration.

To put it simply, traders are waiting for the ECB meeting and press conference, which can be followed by speculative hype in the market.

Sell positions:

Traders consider this if the price is kept below the level of 1.1750, in the direction of 1.1700.

Buy positions:

Traders consider this if the price is kept above the level of 1.1830, in the direction of 1.1900.

Trading recommendation for GBP/USD on July 22, 2021

As for the trading chart of the GBP/USD, it can be seen that the correction is still relevant in the market, but the resistance area of 1.3750/1.3800 is standing in the way of buyers, which can negatively affect the volume of long positions.

To simply put it, the correction course can go to a slowdown and completion.

Sell positions:

They are considered by traders if a price rebound occurs from the resistance area of 1.3750/1.3800, which will eventually lead to the continuation of a decline in the direction of the pivot point of 1.3571.

Buy positions:

Traders are still in the area of the 1.3650 level and profit-taking is currently taking place. The entry into the deal was taken into account in the previous analytical review.

Trading recommendation for EUR/USD on July 23, 2021

Looking at the EUR/USD trading chart, one can see that the quote follows the area of this week's local base, where the volume of short positions was reduced again.

In this situation, it is worth adhering to the borders of the previously specified amplitude of 1.1750/1.1830, where the most significant price changes will occur after the price has been held outside a particular border in the H4 interval.

Sell position:

Traders will consider this if the price is kept below the level of 1.1750, in the direction of 1.1700.

Buy position:

Traders will consider this if the price is kept above the level of 1.1830, in the direction of 1.1900.

Trading recommendation for GBP/USD on July 23, 2021

As for the trading chart of the GBP/USD, it can be seen that the price area of 1.3750/1.3800 still acts as a resistance in the market, leaving a chance for a change in trading interest. The strongest sell signal will come from the market after the price is kept below the level of1.3725; or else, there will be a prolonged stagnation.

Sell position:

Traders will consider this if the price is kept below the level of 1.3725, which will open the way towards the coordinates 1.3700, 1.3640, and 1.3570.

Buy position:

Traders considered this in the middle of the week, which made it possible to earn a profit on the correctional course. At the moment, traders have already taken profit and are considering sell positions, but their opinion may change if the price is kept above the level of 1.3800 in the H4 timeframe.

Hot forecast for GBP/USD on July 26, 2021

The trading week commences quite calmly and quietly, since the macroeconomic calendar is almost empty. Only during the US trading session will data on sales of new homes in the United States be published, which may contribute to the strengthening of the dollar. This is because these same sales is likely to increase by 1.4%, which is quite a lot.

During the technical correction from the variable support point of 1.3570, the GBP/USD currency pair reached the price range of 1.3750/1.3800, where there was a reduction in the volume of long positions, which led to stagnation.

Please note that the quote in the process of slowing down formed an amplitude in the range of 1.3720/1.3785, which confirms the theory of interaction of trading forces, relative to the range of 1.3750/1.3800.

The market dynamics has signs of slowing down, but due to the existing amplitude, an accumulation process may occur, which in turn will lead to a natural acceleration.

In the current location of the price, the same amplitude course of the price is observed within the area of interaction of trading forces.

Considering the trading chart relative to the daily period, a consistent process of changing the trading interest is visible, from an ascending direction to a descending one.

In this situation, it can be assumed that the 1.3750/1.3800 area will continue to put pressure on buyers, but entering the market on a downward trajectory will be considered by traders after holding the price lower than 1.3725 for a four-hour period. Otherwise, the accumulation process will be delayed within the specified limits.

From the point of view of complex indicator analysis, it can be seen that technical instruments in the minute and hour periods have a variable signal, while the daily period continues to signal a sale.