As for the euro, yesterday, I hoped for a decline, but the day ended with a decrease of only about 10 points.
In short, the second day we have a flat, and this is a signal that we can prepare for a momentum.
Today, by the way, there is great potential for it. First of all, the news background gives the pair an opportunity to move.
Secondly, we have several technical levels such as 1.1180 and 1.1111.
If they are broken through today, this can be considered as the climax of sales.
For more than a week, the euro has continued its steady decline and there are no strong signals for a reversal.
The first barrier to decline is yesterday's low of 1.1193.
If it is broken, the euro will decline further.
As for options, a movement to the level of 1.1190 is possible today.
This is the first important level. If it is broken, the next important put range will be at 1.1090.
If this range is reached today, it will be a very good opportunity to open buy deals at competitive prices.
This can be done just during the American session, while the Europeans can make a small upward correction.
Moreover, Powell will give a speech today, so new lows can be hit amid such news.
Of course, I donít rule out an upward movement as a correctional wave, but ideally, itís better to break through the bottom and only then go up.
The resistance in the form of a call range is at 1.1240 today, so this will be the main level from which sales are possible.
Taking into account the risk premium at this strike, the margin for growth is allowed even to 1.1291, although such a growth is unlikely.
Today, the optimal option range is 150 points.
At the 12th strike, we have the optimal level of support;
At 1.1350 at futures prices, we have the optimal level of resistance.
At the moment, the price is trading exactly between the levels. Considering them as a reference point for entering, itís better now to be out of the market and start working after the price growth or decline by 80 points.
From a technical point of view, I have a downward trend today.
There are no strong signals of a reversal. If they are absent, it is better to work in the direction of the trend and not try to hit another low, hoping that it will be the last one.
After the climax, it is possible to enter the market and make a sure step towards growth.
Now, the main task is not to suffer from an even greater loss from purchases, rather than look for another low for a buy deal.
So, if you really want to buy, use a short stop order.
Yesterday, the currency pair euro/dollar recovered its strength to increase and is now making a movement towards the correctional level of 1.1291. From this level, we will observe another connection in the decline. Although the trend going downwards has yet to be cancelled, gaining a foothold over the level of 1.1230 suggests an upward correction. Thus, few experts in trading are starting to increase their purchase and hoping for positive changes in the economy of the European Union.
Meanwhile, based on the chart, the Moving Average determined the development of the pair towards the correctional Fibonacci level of 50%. As observed, the pair EUR/USD has been spending its time at these levels for a whole year already. The range of 1000 points is insignificant, and thatís a fact. It is possible to reach the Fibonacci level of 61.8%. The target stays important t until the end of the week.
Hello, dear traders.
In short, let's recall my expectations of a downward movement. The downward targets were 1.1230, 1.1210, and 1.1190, where I waited for a rebound and a return to the upside. Everything was the way it's supposed to. There was a rebound from the level of 1.1190.
Technical overview on EUR/USD.
Now the plans are upward. However, the first thing I am waiting for is a downward pullback which will probably be accompanied by hitting a new low, that is, a return to 1.1190. We will have to watch intraday levels where the downward trend will end below. And after the downward pullback, I expect the resumption of the upward trend with the targets of 1.1410, 1.1470, and 1.1520.
These are the resistance levels on the upside, while the support levels are below, 1.1150, 1.1120, and 1.1090.
But Iím not interested in support yet, as my plans are upward. If Iím not mistaken, after all the zigzags that I have described, the uptrend will start. Once H4 turns around, there will be no obstacle on the way to the upside, except for resistance at 1.1410, 1.1470, and 1.1520. At these levels, we will stop for a break. Then we will go further to 1.1650. That's what I expect from the EUR/USD pair from a technical point of view.
Intraday levels for today.
The upper level is 1.1256.
The lower level is 1.1208.
Yesterday, the level confirming the uptrend was 1.1213. After the breakout, the pullback was confirmed. The level of 1.1213 worked out very well. Today, some narrowings will probably be created. This means that we will not break through the intraday levels. Narrowings and extensions are often formed before a reversal.
The uptrend is still in force within the day. At the level of 1.1260, M15 will show us a pullback. While we are above 1.1260, we have the upward trend. So, I am planning to wait for a pullback to open buy deals.
Today's intraday trading does not differ from yesterday's one, as today, I expect almost the same movement as yesterday.
Also, I expect a downward movement during the Asian session, so I will make a purchase from the bottom to the top.
As for the details of the movement, the southern scenario is still relevant. Within the day, the cancellation of the south is a breakout of 1.1480, the targets are below - 1.1430 and 1.1390. At the moment, the price is developing which indicates a southern impulse. Therefore, during the Asian session, I expect a downward movement, the price will be driven back. Later, we will see where it is pulled back and stopped, and then weíll make decisions for adding sales. The rebounding levels are 1.1480 and 1.1510. Well, a breakout will speed up the pullback, but do not forget that after the pullback, it is still expected to go down, so while we should not wait for the strong north.
As for the trading range for today, the top is 1.1610, the bottom is 1.1345.
As for the levels confirming the directions, the top is 1.1527, the bottom is 1.1479. At the moment, just like yesterday, we are starting the day with the southern confirmation, and are already below the level.
So, I think itís the end of the downward trend on the euro. But it does not mean that we should forget about selling.
Yesterday the euro managed to break above 1.1232, tested this zone successfully and advanced higher.
Unfortunately, I missed this opportunity and did not buy. At least, I managed to close sell deals.
Bulls demonstrated their strength and determination to push the price higher. A strong upward momentum was seen. Before that, it seemed that the price would never be able to rise, but it turned out to be quite the contrary.
Yesterday I expected the price to retest the downside, but it did not happen. The plan A unfolded after the price reached the level of 1.1206.
I did not open buy deals as I was not able to monitor the situation the whole day. Frankly speaking, I did not intend to buy at all. By the way, the momentum is rather strong. Now I doubt whether I can sell against such strong a movement.
So far, I have not risked doing it though I wanted to sell near 1.1270. But itís risky now. Iíd rather wait for the wave to complete and then maybe Iíll sell.
Yesterday, at 1.1235-1.1255 levels buy volumes increased sharply, so I donít think that the price will fall below this level.
Further on, the strong support is found at 1.1250, and the price has already added 30 pips in the Asian session.
A deep fall is very unlikely at the moment. On the upside, the level of 1.1350 serves as the next resistance that can be reached easily. It would be reasonable to buy at 1.1235-1.1250.
The volume indicator shows a relatively clear picture.
Buyers continue pushing the price higher while big sellers are seen at 1.1350-1.1400.
So, unless the price breaks above these levels, it will be risky to buy.
However, the situation may change drastically. Big buyers may enter the market and reversed the trend sooner than expected.
According to the CME chart, yesterday the buy volumes increased notably. The Open Interest advanced by 4.6K. The turnover also increased. This is a clear sign of the upcoming strong movement. The question is, in what direction will the price go. I predict that the upward trend will be formed, as it remains intact on the daily chart.
The EUR / USD pair is holding above the support of the ascending channel, so the bullish trend remains valid for today, supported by the 50 SMA, awaiting a visit at 1.1390 initially, while reiterating the importance of stability above 1.1265 for the continuation of the expected bullishness.
The pair euro/dollar can be seen testing the daily level of resistance - 1.1265. At the moment, the price is located at the level of 1.1267. Yesterday, the pair was in a narrow range - 1.1245 - 1.1285; and this day, we are waiting for the EUR/USD pair to move out from this range. But even if the pair moves out from the range, it is not necessary to rely on a serious movement in one of the sides. The upward movement is restricted by a strong resistance zone on D1 which is 1.1304 - 1.1323. On the other hand, the downward movement is restricted also by a very strong level of support - 1.1214. Thus, today, it is most possible that we should rely on the maximum. This is based on some expansion of the range of the movement of the pair and the expansion of the range is very probable in the upside compared to the downside.
As for the trend, I expect a downward movement. The targets are 1.1650, 1.1750, and 1.25, but it is too early to talk about it. We have closer levels such as 1.1410, 1.1470, and 1.1520. And now let's consider the way we will reach these levels from a technical point of view.
On H1, there was a reversal. Now the task is to turn H4 around. So, let's figure out what actions are required for an upward reversal. First of all, it is necessary to pull back down. The targets at the bottom are 1.1230 and 1.1220. It is not excluded that we can make a lower pullback. However, this is a catch in the uptrend, or rather a delay.
The perfect option is a rebound from 1.1230 and 1.1220 and a reversal for breaking through 1.1290. In such a case, we will see the upward trend soon. But the option with a deep pullback will destroy H1, and it will take a long time to get things in order. I think that's about a week to make it right. During this time, we need to make a zigzag for the downtrend, then a zigzag for the uptrend. In addition, we should take into account that the rally of EUR/USD happens once a week. So, I hope that we will get a rebound from 1.1230 and 1220 and go up, but this will most likely happen next week, since today intraday levels are just switching to the downtrend.
Intraday levels for today.
The upper level is 1.1285.
The lower level is 1.1250.
Today, on Friday, the levels will indicate where we should start. And of course, intraday M15 and M30 time frames.
Intraday trading. As you know, I expect a movement to 1.1220. The breakout of 1.1285 will cancel the downward trend. That's what I am waiting for today, not for making profit, but in order that it could be possible to start buying in the medium term on Monday.
The euro is expected to continue its upward correction. I have one long deal and now I am working on the way to do next. I think that there are two options. The first one is growth highlighted in blue. The second option implies growth after a slight decrease that is highlighted in red. However, in this case, it will be necessary to break through yesterday's low and go below the mandatory zone. Thatís okay, but the main task is to come back. That's why I donít like the red scenario.
US CPI surprises while markets worry over interest rates. No definite trend on EUR/USD yet
The week is coming to an end, but the US dollar barely moved following the speech of the Fed governor. Other Fed officials also have left some comments regarding the interest rate. Some of them even dropped the wording about the necessity to cut the rates, thus perplexing market participants. Some experts continue to expect the funds rate to be lowered, others doubt it.
As for me, I never stop being surprised by the American macroeconomic statistics. First, the jobs market data revealed unexpected results, then the inflation report showed a rise amid falling gasoline prices. Strategists and economists, seeing such upbeat statistics, ask themselves, whether a rate cut is needed at all? Maybe, there is no need to hurry and rate-setters should think carefully before adopting easing measures in September. Why rush to make in July? But the futures market gives 100% chance that it will happen. Presumably, the lowering cycle will end in September with the interest rate settled at 1.75-2%. A series of odd circumstances makes me think that Mr. Powell may be hiding some facts about true intentions of the FOMC members.
Based on the inflation data, a rate cut in July is not justified. Though the inflation is not a key gauge for the Federal Reserve, its reading influences the PCE. Let me remind that the core CPI advanced by 0.3%, hitting the highest level since January 2018. The annual inflation rate was registered at 2.1%.
Even the Bank of England doubts that a rate cut would be reasonable amid stable inflation, despite the fact that the UK economy is on the verge of recession. Probably, the Federal Reserve will have to admit its mistake of hiking the interest rate too fast, so it may merely adjust its policy without any sharp turnabouts.
The reaction of the bond market to the CPI data was rather peculiar. As the monthly reading increased, the 10-year bonds skyrocketed above the levels last seen on June 19. At the same time, 2-year notes plunged following the data. These securities are thought to be the key indicator of the future monetary policy in the US, so the yield at 1.87% signal high possibility of a rate cut in July.
However, the market will have time to absorb the US data, but now investors have shifted their attention to the ECB policy. That is why I donít hurry to close my long deals, expecting that the trend will reverse next week and EURUSD will show zig zags. From a technical point of view, the price has already entered the bullish zone, though I expect that tomorrow the price will attempt to slide to 1.1230-1.1215. The ADX indicator reversed to the upside too fast which is a sign of a strong impulse, so itís possible that the price will fail to break the first target. Meanwhile, the wave structure indicates that the a of (C) wave has been initiated. It is likely to be completed at 1.1395. Whether it will slow or fast - weíll see it next week. For now, I donít think that the upward momentum is sustainable.
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