12.07.202111:18 Forex Analysis & Reviews: EUR/USD analysis and forecast for July 12, 2021

At the auction of the past five days, the US dollar suffered losses against all its main competitors, except for the Japanese yen. It is a familiar situation. Isn't that right? It has already happened. In particular, the EUR/USD currency pair analyzed in this review strengthened by 0.31%, which is a fairly modest achievement of the euro markets. Nevertheless, a rather curious picture has formed on the weekly price chart.


Exchange Rates 12.07.2021 analysis

I don't know how much the main events of last week (namely the FOMC minutes, the ECB monetary policy report, and Christine Lagarde's speech) affected the price dynamics of the euro/dollar. However, from a technical point of view, the support in the area of 1.1800 brilliantly fulfilled its function and did not let the quote go lower. Having reached the minimum trading values on July 5-9 at 1.1782, the pair actively began to recover the losses incurred and ended the weekly trading at 1.1877. Let me remind you once again that this is above the important and strong technical and psychological levels of 1.1800, 1.1830, and 1.1860. The resulting candle with a long lower shadow and a not very large bullish body can be considered a reversal and classified as a "Hammer" model.

However, taking into account the fact that the pair completed the last five-day trading period within the Ichimoku indicator cloud, as well as below the 50 simple moving average, the blue Kijun line and the red Tenkan line circled on the chart with a blue circle, the bulls still have a lot of unsolved problems for this trading instrument. In my personal opinion, the completion of the started trading above the Tenkan line, which is located at 1.2024, will undoubtedly strengthen the bullish sentiment for the pair and open the way to higher prices, from which it is possible and necessary to highlight the levels of 1.2060, 1.2080, 1.2100 and 1.2120. However, the initial task for players to increase the exchange rate is to bring the price up from the Ichimoku cloud. In general, euro bulls have something to work on. In turn, the EUR/USD bears need a true breakdown of the level of 1.1800 and the closing of trading below the last lows shown at 1.1782. In this case, the reversal model of the "Hammer" candle analysis will lose its relevance, and the bears will resume their control throughout trading on the euro/dollar.


Exchange Rates 12.07.2021 analysis

After the appearance of the "Bullish Absorption" reversal candle model on July 8, the pair showed growth, during which it was able to close Friday's trading above the Tenkan red line. If the quote does not return below this line and the rate continues to rise, the orange 200 exponential moving average, located at 1.1930, may become the next obstacle for the euro bulls. Given the strong and significant technical level of 1.1900, the nearest resistance zone can be designated as 1.1900-1.1930. I will indicate higher goals for possible growth in the area of 1.1975-1.1985. As can be seen on the EUR/USD daily chart, there is a fairly strong resistance level here, and the lower border of the Ichimoku indicator cloud is slightly higher. The bears have the same tasks that were described when considering the weekly schedule.

Trading recommendations for EUR/USD:

Given that the reversal patterns of Japanese candlesticks have appeared on the two charts considered, I dare to assume that a bullish scenario is very likely for the pair, during which the quote will reach the goals indicated in this review, the nearest of which is the area of 1.1900-1.1930. I suggest looking for options for purchases of the single European currency after short-term declines in the price zone of 1.1865-1.1855. If bearish patterns of Japanese candlesticks begin to appear on this or smaller charts near the targets indicated in the case of probable growth, this will be a signal for opening sales. That's all for today. Tomorrow, we will consider smaller time intervals.


Ivan Aleksandrov,
Analytical expert of InstaForex
© 2007-2021

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