EUR/USD 1H
The euro/dollar pair corrected to the critical Kijun-sen line and rebounded off it on the hourly timeframe on July 14. Thus, buyers dominated the market again despite the fact that they released quotes from the ascending channel a few days earlier. As a result, the ascending channel had to be rebuilt and now it signals an upward trend again. At the same time, we note that the bulls do not completely dominate the pair right now. Very frequent corrections, each of which can potentially result in a change of the trend to a downward one. In general, as we mentioned in the fundamental reviews, now is not the most convenient time to work with the EUR/USD pair. However, everything does not look as bad as on the higher ones on the hourly chart. The pair managed to break out of the 1.1200–1.1350 side channel, so certain prospects are opening up for the euro.
EUR/USD 15M
Both linear regression channels are still directed upwards on the 15-minute timeframe, signaling an upward trend in the most short-term plan. There are no signs of starting a new round of corrective movement at the moment. The latest COT report from July 7 was quite boring. The most interesting category of large traders commercial, which is a set of professional traders who trade for commercial profit, opened almost 6,000 Buy-contracts and only 1,700 Sell-contracts. Thus, the net position for this category has increased by almost 4,000, which, simply put, means that the bullish mood of major players has increased. In principle, the beginning of a new trading week confirms this attitude of professional traders, as the euro continues to rise in price against the dollar. Slowly but surely. The total number of Buy-contracts for professional traders is also much higher than the number of Sell-contracts – 186,000 against 80,000.
The fundamental background for the EUR/USD pair did not change at all on Tuesday, as did the mood of the market participants themselves. Several relatively important macroeconomic reports did not particularly change the picture of things, as markets continue to pay more attention to the coronavirus epidemic in the United States, the statements of the country's chief epidemiologist Anthony Fauci, which are completely opposite to the optimistic statements of the head of state Donald Trump, as well as the very gloomy prospects for the American economy if the second wave of coronavirus is not stopped in the near future. The European Union is more calm. The EU summit will be held this week, during which the most important issue for the bloc will be resolved – the issue of forming an economic recovery fund and the issue of approving the budget for 2021-2027. All 27 EU member states need to agree that 750 billion euros should be raised and distributed among the most affected sectors of the economy, as proposed by the European Commission. Thus, we can expect the euro to fall after the end of the summit, if there are no positive results. Otherwise, the euro's fate will depend on traders, who will sooner or later take a time-out and the pair will begin to adjust at least. It is difficult to expect more than a correction for the US currency in the current conditions.
Based on the foregoing, we have two trading ideas for July 15:
1) Buyers pushed back from the critical Kijun-sen line and resumed purchases after a slight correction. Thus, the trend remains unambiguously upward, but do not forget about the frequent pullbacks and corrections that are now inherent in the euro/dollar pair. Judging by the last few bars, traders are preparing for a correction, however, the goals for long positions remain the same - resistance levels of 1.1432 and 1.1494. Potential Take Profit in this case is from 40 to 100 points.
2) The bears have failed to cross the Senkou Span B line or the Kijun-sen line over the past few days. Therefore, we state the fact: sellers do not have enough strength to start a new downward trend at this time. Thus, we advise you to sell the euro, but not before overcoming the Kijun-sen line, and ideally after closing below a new rising channel, while aiming for supporting levels of 1.1238 and 1.1176. Potential Take Profit in this case is from 50 to 110 points.
