4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - upward.
CCI: 107.9624
The EUR/USD currency pair maintains the prospects of an upward movement. However, the technical picture now does not raise any questions, unlike the fundamental picture of the state of things. We have repeatedly said that, in principle, the current strengthening of the European currency, which had been falling for two years before, but lost only 2 cents in 2019, is quite logical and justified by the events that are happening now in the United States. Even yesterday, when the results of the Fed meeting were scheduled to be summed up, traders were not discussing the Fed meeting at all. All the topics that excite market participants have remained the same. And it is these topics that can contribute to a new fall in the US currency. At the same time, we have already noted the fact that the upward trend can end at any time. First, because of the purely technical need for a correction, and second, because the dollar can not fall forever on the same news. In any case, you need to go through the main ones.
The topic of "coronavirus" remains the main one at this time. In the United States, a high number of COVID-2019 diseases is still recorded, but in recent days, the rate of spread of the epidemic has still begun to decrease and on Monday, less than 60 thousand cases of the disease were recorded. The consolation for the American healthcare system and Donald Trump personally is weak. But this is better than if the growth rate continued to increase.
Meanwhile, riots and protests continue in many American cities. The situation is most difficult in Seattle and Portland, where protests have long been non-peaceful. Protesters use Molotov cocktails, rocks, stun guns, sledgehammers, bats, and so on. This is the same situation in many other cities in the United States. Earlier, Donald Trump sent special forces to several cities to stop riots and restore law and order as soon as possible. However, at the moment, it cannot be said that this plan of Trump has worked. Protests and rallies continue. The US Justice Secretary, who is also the Attorney General, called the actions of the protesters "an attack on the government". A lengthy speech followed, during which it became known that the US government would continue to resist the protesters in order to ensure calm and a safe life for American citizens. It is also reported that the mayors of six American cities at once sent Trump demands to remove special forces from their regions. Mayors have asked Congress to limit the powers of the US President in this matter. According to mayors and governors of many cities and states, the protesters are only exercising their right guaranteed by the Constitution, and all actions of the federal authorities only provoke violent clashes with law enforcement officials. It is also reported that the mayors of Chicago, Seattle, Portland, Albuquerque, Kansas city and Washington are outraged by the actions of Trump, who sent armed special forces to their cities.
In general, what is currently happening in the United States, in other words, than "anarchy" and "chaos", can not be called. The most interesting and, unfortunately, funny thing is how Donald Trump himself is trying to influence the situation and sway voters in his direction three months before the presidential election. Naturally, Donald Trump blames China and the Democrats for all the troubles. Sometimes personally, sometimes through his proxies, such as Mike Pompeo, who is Secretary of State. On Tuesday, Pompeo said that the Chinese work closely with the Democratic Party and regularly hold talks with them on Capitol Hill. He complained that American diplomats also want to be able to "talk to the Chinese people", although it is unlikely that this is what he meant. Most likely, Pompeo is hinting that China actively supports Joe Biden, as Donald Trump himself has repeatedly said before. And, of course, regularly "gets" to Joe Biden himself from the current president of the United States. In recent interviews, Trump called Biden a "puppet of the left" and said that if he wins, "cities in the United States will burn with fire, and markets will collapse". Under him, according to Trump, the United States will enter the "Golden age".
In general, once again we can note that when the country has a serious and difficult situation with "coronavirus" and "unrest", the US authorities are thinking more about the upcoming elections. However, the current state of affairs in the United States is a consequence of the problems of power that have accumulated over the years. We have repeatedly suggested that the current unrest and the "coronavirus" are supported by some hidden force. We don't want to guess who this force might be. However, somehow the whole world rallied against Trump and his administration, somehow too holistically and precisely in time.
And finally, in Germany, the Minister of Education and Research of Germany, Anja Karlikzek, made another statement that reflects the real state of affairs in the development of a vaccine against "coronavirus". "Scientists are working at an unprecedented speed, but in such complex projects, steps in the opposite direction are always possible. Don't wait for a miracle. We should assume that the vaccine will be ready for the general population at the earliest in the middle of next year," Karliktsek said.
Thursday will be quite an important day for the euro and the US dollar. The most important event of the day will be the publication of GDP for the second quarter in the US. However, we will analyze all American reports in the article on GBP/USD. In Europe today, there will also be something to pay attention to. Early in the morning, German unemployment figures will be published, which continue to please the traders. It is expected that the main unemployment rate will grow to only 6.5%, and the number of new unemployed will be +43 thousand. It will also publish a preliminary GDP for the second quarter with a forecast of -11.1% in annual terms and -9% in quarterly terms. This is, of course, a lot, but compared to the possible -35% of American GDP – nothing. Also on July 30, Germany will publish the consumer price index for July with a forecast of 0.2% y/y. Harmonised inflation should be 0.4% y/y. Weak values, but in the context of a pandemic and crisis, inflation is not an important indicator. For the EU, the unemployment rate and consumer confidence will also be released. We would say that the key report on Thursday in Europe will be German GDP.
The volatility of the euro/dollar currency pair as of July 30 is 93 points and is still characterized as "average". Thus, we expect the pair to move today between the levels of 1.1692 and 1.1878. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction within the ascending trend.
Nearest support levels:
S1 – 1.1719
S2 – 1.1597
S3 – 1.1475
Nearest resistance levels:
R1 – 1.1841
R2 – 1.1963
Trading recommendations:
The EUR/USD pair resumed its upward movement. Thus, today it is recommended to continue trading on the increase with the goals of 1.1841, 1.1878 and 1.1963 until the new reversal of the Heiken Ashi indicator downwards. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first target of 1.1597.