EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair has completed the consolidation above the Fibonacci level of 100.0% (1.1107) and continues the process of growth towards the correctional level of 76.4% (1.1180). On Friday, August 2, the growth of the euro/dollar pair was not obvious, given the nature of economic news from Europe and the US. In the European Union, the only report on retail sales really supported the euro, as it exceeded the expectations of traders twice (+2.6% - +1.3%), the reports from the US were also not a failure, which the Fed had previously feared. The unemployment rate at the end of July remained unchanged, the average hourly wage increased by 3.2% y/y and 0.3% m/m, which is higher than the expectations of the forex market, Nonfarm Payrolls was also not worse than the forecasts – 164K. However, the bears still decided to take a break and ignore the good data from America. This is good for the euro, which can now grow a little. This is also good for the dollar, which now warns itself against big losses in the future without big losses. After all, the better economic reports will come from America, the less likely that the Fed will go to a new reduction in the key rate. And the growth of the US currency may resume today, when the indices of business activity in the US and EU services sectors, as well as composite indices of business activity, will be released. Donald Trump, who has long dreamed of a cheap dollar, which, in his opinion, will help to win in the confrontation with the European Union and China, can prevent the new growth of the US dollar. This time, the US President announced the introduction of trade duties against Chinese imports in the amount of $300 billion in the amount of 10% from September 1. The reasons for this decision was, according to Trump, too slow progress in the negotiations, which, according to Trump, the Chinese side is to blame. Fortunately for the dollar, traders did not rush to sell it, as they pay more attention to economic statistics, and not to the political and geopolitical confrontation of the US leader.
The Fibo grid is built on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
The currency pair EUR/USD has completed a close above the correction level of 100.0% (1.1107). I recommend buying the euro/dollar pair today with a target of 1.1180, with the stop-loss order below the level of 1.1107. I recommend to sell the pair with the target of 1.1025, and with a stop-loss order above the level of 1.1107, if the closing is performed under the correction level of 100.0%.
GBP/USD – 4H.
The GBP/USD pair showed a meager growth on Friday, to the correction level of 127.2% (1.2180). Immediately, there was a rebound of the pair quotes from this level with the formation of a bearish divergence in the CCI indicator. Thus, technical factors predict a new fall of the pound sterling in the direction of the corrective level of 161.8% (1.1853). The newly minted British Prime Minister Boris Johnson, meanwhile, continues to exert political pressure on the EU government. Johnson said that the EU should review the terms of the agreement on Brexit, otherwise there will be a hard break in ties between the Kingdom and the Alliance. Statements of this kind resurrect in memory the period when Theresa May tried with all her might to carry out her version of the agreement with the EU through Parliament, speaking almost daily in the press and saying that "UK politicians should unite in a difficult moment", "the agreement reached by her is the best that could be achieved". Now, Boris Johnson performs with similar songs. Only his audience is in Brussels. Johnson continues to press the fact that the hard break is not beneficial to the European Union. And the European Union is well aware that the hard gap is disadvantageous primarily to London, and does not make any concessions, which is quite logical. Because Britain wanted to leave the Alliance, and now three years later, continues to demand better terms for themselves. The pound does not like such processes, and traders do not believe that the situation with Brexit will end well for the UK. Chances of growth in the British currency is still a little bit.
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 as a whole continues to grow slightly in the direction of the Fibo level of 200.0% (1.2227) after the formation of a bullish divergence in the MACD indicator. However, MACD and CCI have already been sent down, which shifts the mood of the traders today precisely towards the bearish one. By the way, the pound/dollar pair could not reach the level of 200.0%, and the rebound of quotations from the correction level of 127.2% on the 4-hour chart greatly increases the chances of a further fall in the coming days.
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 resumed the process of falling. Thus, I recommend selling the pair with the target of 1.2057, with the stop-loss order above the level of 1.2180, as the rebound from the correction level of 127.2% (4-hour chart) was performed. I recommend buying the pair with the target of 1.2334 and with the stop-loss order below the level of 200.0% (hourly chart) if the closing is performed above the level of 1.2180.
