EUR/USD analysis and forecast for August 4, 2021

Yesterday's trading on the main currency pair of the Forex market did not differ much from the previous ones. Again, indistinct price movements without a clearly defined direction. The only difference from Monday's trading was an equally insignificant strengthening, but this time in the US dollar. Experts attribute this to an increase in the incidence of a new delta strain of COVID-19 as if there were no outbreaks of it before. In principle, the essence of all market troubles is that any price movement can always be explained by one or another reason. First of all, this applies to the main world currency – the US dollar. So yesterday, according to several experts, the "American" was in demand as a protective asset, as investors had increased concerns about the spread of the COVID-19 delta strain. Against this background, the yield of ten-year US Treasury bonds fell by more than 20 points, and the US stock market was not in the most positive mood. However, in my personal opinion, these are all local and highly insignificant successes of the US dollar, if they can be called such at all. I believe that the main influence on the price dynamics of the US currency will continue to be the inflationary component and the important upcoming events, which includes the US employment data for July. Also, the economic symposium in Jackson Hole, where the heads of all the largest and leading world central banks will speak. Of course, we will be most interested in Fed Chairman Jerome Powell's speeches and ECB President Christine Lagarde.

If you look at the economic calendar, it is worth noting that yesterday's data on production orders in the United States exceeded the forecast value of 1% and increased by one and a half percent. Perhaps this also contributed to yesterday's strengthening of the US dollar against the single European currency. The main macroeconomic events of today will be retail sales in the eurozone, the publication of which is scheduled for 10:00 London time. From American statistics, I recommend that at 13:15 (London time), pay attention to the change in the number of employees from ADP. At 15:00 (London time), the index of business activity in the service sector from the Institute of Supply Management (ISM) will be released. You can look at the price charts, although I will immediately note that little has changed there. However, the week is gradually gaining momentum, and we have the right to count on more active actions of market participants.

Daily

As already noted, a Doji candle with an extremely small bearish body and a long upper shadow appeared on the daily chart following the results of yesterday's trading. Bears can be credited because they did not allow their opponents to raise the quote above the previous highs - 1.1897. Yesterday, all attempts by players to increase the exchange rate were stopped already at 1.1893. Although, given that all the most important events of this week are still ahead, and the EUR/USD pair remains bullish, this factor about lower highs is unlikely to have a fundamentally important and decisive value.

H4

As it was repeatedly assumed earlier, a strong price zone near 1.1860 is in play and provides strong support for the pair in the current situation. The nearest and no less strong resistance is in the area of 1.1893-1.1909. Euro/dollar bidders can't figure out the orange 200-exponential moving average in any way. The price seems to be tied to it and does not go far, constantly returning to the 200-EMA. I can offer two options for trading ideas. The first is to trade in the range of 1.1860-1.1900, buying at the lower limit of the range and planning sales on the approach to the upper one. However, it is better to enlist the support of candle signals corresponding to purchases and (or) sales on this or hourly charts with such a strategy. Only after their appearance, open positions in one of the sides. The second option is to wait for the breakdown of 1.1909 and buy on a rollback to this level. In case of a breakout of support in the price zone of 1.1860-1850, we are already selling on a rollback. That's all for today.