EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair rebounded from the correction level of 127.2% (1.1025), a turn in favor of the European currency and began the growth process in the direction of the correction level of 100.0% (1.1107). The rebound of quotations on August 2 from this level of Fibo will work in favor of the US currency and the resumption of the fall in the direction of the correction level of 127.2%. There are no emerging divergences today. Yesterday's news brought long-awaited support to the euro. Despite the fact that we cannot say about the unambiguity of these economic reports. Business activity in the industrial sector of the European Union has improved slightly, but still remains at extremely low levels. Most likely, the US ISM business activity index played a major role in supporting the euro, which fell from 51.7 to 51.2. Today, however, traders are waiting for more interesting news. In America today, there will be data on the number of new jobs created outside agriculture (Nonfarm Payrolls), unemployment, wages and production orders. Such a large and important block of information is unlikely to be ignored by the market. Thus, today we can expect quite active movements in the foreign exchange market. As for the forecasts, the greatest interest is Nonfarm Payrolls and salary. If these reports are better than forecasts, the US currency may return to the Fibo level of 127.2%.
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 rebounded from the correction level of 127.2% (1.1025). I recommend selling the pair today with the target of 1.1025, with the stop-loss order above the level of 1.1107, if the rebound from the level of 100.0% is executed. I recommend buying the pair with the target of 1.1180 and stop-loss order under the level of 1.1107 if closing above the correction level of 100.0% is performed.
GBP/USD – 4H
The GBP/USD pair performed the second consolidation under the correction level of 127.2% (1.2180), but the bullish divergence of the MACD indicator allows to count on a reversal in favor of the English currency and some growth of the pound/dollar pair. The closure of the pair above the Fibo level of 127.2% will improve chances for further growth towards the next correction level of 100.0% (1.2437). While the pound is trying with the last bit of strength not to fall to the three-year lows, all the attention of traders is still focused on Boris Johnson and Brexit. Judging by the fact that the pound is still in absolutely zero demand, traders have little hope for a successful outcome of Brexit. Prosperous is Brexit with a deal with the EU or a soft scenario. However, even in the press, we have not seen such phrases as "Brexit with a deal" for a long time. On the agenda is only one option – hard, and the next postponement of the UK exit date from the European Union is considered as its alternative, although it is not supported by Prime Minister Johnson. Despite the fact that Britain seems to be focused on one option and is trying to prepare and implement it, there is still a lot of uncertainty in this entire epic. Hard Brexit has a lot of opponents, and Johnson cannot make such important decisions as to the country's exit from the alliance alone. Accordingly, he will need support, and the question is whether he will have enough support to realize his plan.
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 performed a slight increase after the bullish divergence of the MACD indicator. However, now the pound/dollar pair is falling again in the direction of the correction level of 261.8% (1.2057). The retreat of quotations from this level will allow traders to expect a reversal in favor of the British pound and some growth in the direction of the Fibo level of 200.0% (1.2227). Fixing the pair below the level of 261.8% will increase the probability of continuing the fall in the direction of the correction level of 323.6% (1.1883).
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 the target of 1.1883, with the stop-loss order above the level of 1.2057, if the closing is performed under the level of 261.8%. 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.
