EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair continues the process of falling towards the correction level of 23.6% (1.1187). The formation of a bullish divergence in the CCI indicator allows traders to expect a reversal in favor of the European currency and some growth in the direction of the correction level of 38.2% (1.1238). Hanging quotations from the Fibo level of 23.6% will similarly work in favor of the early growth of the euro/dollar pair. Meanwhile, traders continue to wait for the beginning of the speech of Fed Chairman Jerome Powell in Congress. This event is definitely the most important this week. There will be two speeches and traders hope to get information that will still shed light on the question of whether the Fed intends to reduce the key rate in the coming months? Or was it a reaction to weak economic indicators in June? Now, amid a strong nonfarm, Jerome Powell may toughen its rhetoric that the forex market is regarded as a signal to cancel the desire to lower the rate. One way or another, today and tomorrow, we will find out what kind of attitude Powell adheres to. By the way, the absence of any changes in the wording and rhetoric of Powell or even ignoring the topic of monetary policy (which is unlikely), will also be important. This will mean that nothing has changed in the Fed's intentions.
The Fibo grid is built on extremums from March 20, 2019, and May 23, 2019.
Forecast for EUR/USD and trading recommendations:
The EUR/USD pair completed the fall to the correctional level of 23.6% (1.1187). I recommend selling the pair with the target at 1.1107, with the stop-loss order above the level of 1.1187, if the closing is performed under the level of 23.6%. I recommend buying the pair with the target at 1.1238 and stop-loss order under the level of 1.1238 since bullish divergence was formed.
GBP/USD – 4H.
The GBP/USD pair performed a fall towards the Fibonacci level of 100.0% (1.2437). A bullish divergence was formed in the CCI indicator, and the quotes of the pound/dollar pair are preparing to rebound from the correction level of 100.0%. These two signals allow us to count on a reversal in favor of the English currency and some growth in the direction of the correction level of 76.4% (1.2661). Traders will be waiting today for information on GDP in the UK and industrial production, as well as the evening speech of Jerome Powell in Congress and the minutes of the last meeting of the Fed. As you can see, there are enough important events today. Can they help the traders to execute closing under the correction level of 100.0%? The first data will be released in the UK and the weakness of these reports can already send the pound under the level of 100.0%. Well, tonight it all depends on what Jerome Powell said. In the political circles of the UK, meanwhile, there are events that do not add any optimism to the British pound bulls. First, the main candidate for the post of Prime Minister Boris Johnson supports a tough Brexit scenario, with his help, trying to persuade the European Union to new negotiations and allows the suspension of the Parliament. At the same time, the Chairman of the Bank of England and the Minister of Finance of Britain continue to insist that the hard Brexit will have a devastating effect on the country's economy. The leader of the opposition Labor Party Jeremy Corbyn calls for a second referendum to be held so that the population decides the fate of Brexit.
The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the pound/dollar pair fell to the correction level of 127.2% - 1.2430, but the formation of a bullish divergence worked in favor of the English currency and the pair performed a small rollback up. The consolidation of the rate pairs under the correction level of 127.2% will increase the chances of further decline towards the next correctional level of 161.8% (1.2335) and will cancel the bullish divergence.
The Fibo grid is based on the extremes of June 18, 2019, and June 25, 2019.
Forecast for GBP/USD and trading recommendations:
The GBP/USD pair performed a fall towards the correction level of 127.2%. I recommend buying the pair with the target of 1.2506, with the stop-loss order below the level of 1.2430, but very small volumes, or not buying at all, given the current market sentiment. I recommend selling the pair with the target at 1.2335 if it is fixed below the Fibo level of 127.2% and with a stop-loss order above the level of 1.2430 (hourly chart).
