EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the US dollar and strengthened under the correction level of 100.0% (1.1107). Thus, on August 1, the process of falling quotes of the euro/dollar pair continues in the direction of the correction level of 127.2% (1.1025). A new fall of the euro began after yesterday's evening summing up the Fed meeting. If there were no questions with the rate, it was lowered by 25 points, then there were many surprises with the speech of the Fed Chairman Jerome Powell. It's hard to say that traders were expecting a particular kind of rhetoric. Rather, they were ready to react to what Powell would say. And Powell, contrary to expectations of statements on the increased risks, the regulator's willingness to reduce rates in the future, reported that the current easing of monetary policy can be an isolated case that no course on systematic lowering of a rate is present, and at future meetings of Fed the question of reduction of a rate won't be put automatically. That is, the Fed will consider the current situation, economic indicators, analyze everything and make a decision on the rate based on the findings. It is obvious that if the economic situation in the country worsens, inflation and GDP fall, and Trump continues to fight with China, it can lead to a new weakening of monetary policy, but so far this is out of the question. The rebound of quotations from the Fibo level of 127.2% (1.1025) may work in favor of the euro and some growth in the direction of the correction level of 100.0% (1.1107).
The Fibo grid is built on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
The EUR/USD pair performed a fall towards the correction level of 127.2% (1.1025). I recommend selling the pair today with the target of 1.0920, with the stop-loss order above the level of 1.1025, if the closing is performed under the level of 127.2%. I recommend buying the pair with the target of 1.1107, and with the stop-loss order at the level of 1.1025, if the rebound from the correction level of 127.2% is performed, especially in conjunction with the bullish divergence.
GBP/USD – 4H.
The GBP/USD pair performed the second consolidation under the correction level of 127.2% (1.2180) and reacted very indirectly to the results of the Fed meeting held on July 30-31. The word Brexit does not leave the front pages of news feeds, and Forex traders continue to be most concerned about this process. But unfortunately for the UK, the country is moving at full speed into a "black hole". Now, it is even difficult to imagine what will be the loss of the economy, if the plan with a tough Brexit will be implemented by Boris Johnson? Expert agencies say about the loss of about 10% of GDP in the coming years. However, it is impossible to calculate all the losses (not only financial). Just in the last two days, it was reported that Northern Ireland and Scotland could organize their independence referendums and leave the United Kingdom. This will be another blow to the British economy. Thus, now Brexit seems to be not the only problem of the British. For itself, it can entail a range of problems that will load the work of the government for many years. A pound sterling, in the long run, maybe cheaper than the US dollar. Today, by the way, the Bank of England will hold a meeting. Traders do not expect any changes in monetary policy, but Mark Carney's speech can affect the mood of the currency market.
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 rebounded from the Fibo level of 200.0% (1.2227) with the formation of a bearish divergence at the MACD indicator, a turn in favor of the US currency and the beginning of a fall in the direction of the correction level of 261.8% (1.2057). The rebound of the pound/dollar pair from the correction level of 261.8% will allow traders to count on a turn in favor of the pound sterling and some growth in the direction of the Fibo level of 200.0%.
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 continues the process of falling. Thus, I recommend selling the pair with a target of 1.2057, with the stop-loss order above the level of 1.2227. I recommend buying the pair with the target of 1.2227 and stop-loss order under the level of 261.8% (hourly chart) if it will be rebounded from the level of 1.2057.
