Wave analysis of EUR / USD and GBP / USD for July 11. Inflation in the US can finish the dollar



On Wednesday, July 10, trading ended with a 40 bp increase for the EUR / USD pair. Thus, the current wave pattern, which has almost transformed into a new downward trend, has all the chances to resume building the upward trend. As long as the market does not have a breakthrough of the minimum of wave 2 or b, the chances of building a complex and extended wave with remain. Yesterday, of course, the euro-dollar pair received good news support. Jerome Powell’s speech in Congress was perceived positively by the bulls, as the market saw hints of a reduction in the Fed’s key rate in the near future, as well as threats to a slowdown in US economic growth. Today, Jerome Powell will speak in Congress for the second time, thus, the demand for Eurocurrency may continue today, which will contribute to the construction of a wave. Powell also noted weak inflation yesterday. and today the official report on inflation in June will be released. And according to forecasts, the consumer price index will slow in June from 1.8% to 1.6% y / y. This may be another negative factor for the US dollar, especially if the real value of the report is below 1.6%.

Purchase goals:

1.1417 – 100.0% Fibonacci

1.1480 – 127.2% Fibonacci

Sales targets:

1.1180 – 0.0% Fibonacci

General conclusions and trading recommendations:

A pair of euro / dollar while, presumably, remains in the upward portion of the trend. I recommend buying euros with targets located near the estimated marks of 1.1417 and 1.1480, which equates to 100.0% and 127.2% Fibonacci. Purchases should be minimal. Leaving the tool below the 0.0% level will require making adjustments to the current markup.



On July 10, the GBP / USD pair rose with 40 basis points and moved away from the local minima. Thus, the construction of the estimated wave e is preserved, however, it is necessary that the maximum of the tool reduction should be resumed today or tomorrow. Otherwise, wave e threatens to be completed near yesterday’s lows. News background for a pair of pound-dollar remains controversial. On the one hand, yesterday, the Forex market received signals about the Fed’s readiness to soften monetary policy, and today, new signals will be released as well as weak report on inflation, and on the other hand, negative information and messages also continue to come from the UK. Most of which still concerns Brexit. And even with news from America that happens to be favorable for growth, bulls fear too strong and long-term purchases.

Sales targets:

1.2418 – 161.8% Fibonacci

1.2334 – 200.0% Fibonacci

Purchase goals:

1.2783 – 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument involves the construction of a downward wave e. Thus, I recommend selling the pair with targets located near the estimated marks of 1.2418 and 1.2334, which corresponds to 161.8% and 200.0% in Fibonacci, when the MACD signal is down.

The material has been provided by InstaForex Company – www.instaforex.com