4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - sideways.
Moving average (20; smoothed) - sideways.
CCI: 7.7371
The fourth trading day of the week again passed with a slight advantage of the European currency. However, in the American trading session, the quotes moved down a little, but at the same time, the pound calmly continued to trade with an increase. As we have said many times, there is no positive macroeconomic information coming from the European Union or the UK. Therefore, it is difficult to assume that yesterday's growth was associated with positive data from the EU and the Kingdom. Most likely, market participants continued to sell off the US currency against the backdrop of the second "wave" of the coronavirus epidemic, which is growing like a snowball. And this is becoming a big problem for the United States.
If a few weeks or months ago, the epidemic was about the same scale in the European Union and the United States, now the situation is the opposite. In the European Union, they managed to reduce the growth rate of the disease to "less than 1" (the contagion index, which shows how many people are infected by each infected person) through strict quarantine and awareness of citizens. The value "less than one" means that each patient infects less than one person, so the epidemic is on the wane, and governments can only respond quickly to reports of new outbreaks and localize these places of new infections. At the same time, Europe really has every reason to restart the economy, complete or ease quarantines, and open borders. But in the United States, nothing like this can boast. The total number of cases of "coronavirus" has exceeded 3 million, the authorities are doing nothing to stop the spread of the infection, Donald Trump continues to make discouraging statements, and Anthony Fauci sounds the alarm, saying that "the virus is out of control". In just one day, on July 8, 61.5 thousand cases of the disease were recorded in the United States. This is the maximum increase since the beginning of the pandemic. As you can imagine, the epidemic is only progressing. Thus, now it is the American economy that is at risk since it will be slowed down by the second "wave" of the epidemic in any case. Also in Europe, not everything is fine. According to the authorities of some states, the virus has been curbed, however, it has not gone away, and if people do not comply with the mask regime and rules of distancing, the second "wave" can not be avoided. However, there is no second "wave" in Europe yet, so it is the dollar that continues to feel quite weak against the euro.
Most importantly, the "coronavirus" in the United States has already become a topic of political battles. For all the statements of Donald Trump concerning the "coronavirus", you can create a whole collection, which will then be shown in universities that prepare future politicians and rulers for graduation. It is the "coronavirus" that can cause Donald Trump to become one of the few presidents who will not be re-elected for a second term. One of the latest statements of Trump caused another public outcry, as the leader of the American nation jokingly stated that "we probably need to conduct fewer tests so that the incidence begins to decrease". It was Trump's joking tone that angered the media, Democrats, and everyone who does not support the US President. Joe Biden, who is still in his residence and does not appear in public unnecessarily, setting the right example to Americans how to behave during the epidemic, recorded a video in which he harshly criticizes Donald Trump, his words about the epidemic, his inaction, inability to lead the country in difficult times and excessive desire to be re-elected for a second term, which prevails over the desire to fight the epidemic. In principle, we have said repeatedly that Biden doesn't even need to do anything now to convince Americans to vote for him in November. Trump himself "digs a hole", he does everything to avoid being re-elected. And by the way, it is very difficult to disagree with Biden. It doesn't matter whether you support the Democratic candidate or not, but it is Biden who exudes the qualities the country needs in these times. Biden does not ride around the country with election rallies, does not blame China for everything that is happening, does not insult his opponents, does not get into various scandalous stories, he can not be accused of trying to smear the current President. Oh, and you can't call him a racist or raise such suspicions about him, and he wears a mask, unlike the President. Trump also managed to cast a shadow on himself even in a racist scandal, when he first wanted to disperse all demonstrators and protesters with the help of the regular army, referring to the law of 1806, which was never applied and then retweeting a video with openly racist overtones to his page.
By the way, the highest threat of coronavirus is understood by almost all economists and financiers in the United States. Representatives of the Federal Reserve have repeatedly stated that it is the pandemic that can hinder the recovery of the American economy in the future and affect the pace of this process. Also, Jerome Powell and other Fed representatives have repeatedly called on Congress to agree on a new package of economic assistance that will be sent to businesses and ordinary Americans suffering from the "coronavirus crisis". But instead of solving these important problems, we read in the news the skirmishes between Trump and Biden on the issue of opening schools in September (Donald accuses Joseph of refusing to open schools for political reasons and believes that this way the Democrats intend to get a greater political rating).
On the last trading day of the week in the European Union and the United States, no important publications or speeches are planned. Thus, market participants will again have to pay attention only to the next speeches of Trump, criticism of him from his opponents, and other near-economic and near-political topics. Although the issue of "coronavirus" in the US remains in the first place, and the more cases of the disease are recorded in the United States, the higher the probability of a further fall in the dollar. Although, from a technical point of view, the euro/dollar pair continues to trade near the upper border of the side channel, in which it spent the last month, that is, near the Murray level of "5/8"-1.1353. Although yesterday the quotes went slightly above this level, there was no consolidation above it, so buyers are now also a little in doubt, unlike buyers of the pound, who are actively buying the British currency.
The volatility of the euro/dollar currency pair as of July 10 is 78 points and is characterized as "average". We expect the pair to move between 1.1215 and 1.1371 levels today. A new turn of the Heiken Ashi indicator upward will signal a new round of upward movement within the side channel.
Nearest support levels:
S1 – 1.1230
S2 – 1.1108
S3 – 1.0986
Nearest resistance levels:
R1 – 1.1353
R2 – 1.1475
R3 – 1.1597
Trading recommendations:
The EUR/USD pair continues to trade near the moving average line, inside a side channel with a slight upward slope. Thus, at this time, it is recommended to trade down if traders manage to overcome the level of 1.1200, which is the approximate lower limit of the channel, with the goal of 1.1108. It is recommended to open buy orders not earlier than overcoming the Murray level of "5/8"-1.1353 with the goal of 1.1475, and then very carefully.