EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair continues to fall after the rebound from the correction level of 100.0% (1.1106) and has completed the closing under the correction level of 127.2% (1.1024). As a result, the process of falling can be continued towards the next correction level of 161.8% (1.0918). Traders can only guess whether the fall of the euro/dollar pair was due to the upcoming meeting of the Fed or is it a reaction to the possible introduction of US duties on goods from the European Union, which will mean new trade war. The topic of the trade war between the US and the EU has been exaggerated by the media for a long time. Donald Trump said back in April of this year that certain categories of imports from the EU could impose duties totaling $ 11 billion. This is the reaction of the US President to the illegal subsidization of Airbus by the European Union. Officially, the European Union can be found guilty at the end of September by the WTO decision, which Trump has been criticizing for a long time and threatens to leave it. However, this is not the main thing now. If the WTO recognizes that the United States is right, then the EU will have a hard time, since, according to experts, cars, airplanes, other modes of transport, luxury goods, elite alcohol, clothes and much more can fall under the US sanctions. The American market for luxury goods and alcohol is considered very large, at least a quarter of total sales. Americans love BMW, Mercedez, and other European brands. Thus, it can be assumed that a powerful blow will be dealt with by the economy of the European Union. On the other hand, the question is: what does Trump want to achieve with these duties? Concluding a new trade agreement? New trade war?
What to expect today from the euro/dollar currency pair?
On September 17, I expect a further fall of the euro/dollar pair in the direction of the corrective level of 161.8% (1.0918 or 1.0927) on the closing signal below the level of 127.2%. The pair remained within the downward trend channel, rebounding from its upper line, which is also a strong signal. Fixing the rate of the pair above the level of 1.1029 will work in favor of the euro and will allow traders to count on the new growth of the euro in the direction of the upper line of the channel. Only after the closing of quotations over the channel, I will proceed to consider the purchases of the euro.
The Fibo grid is based on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
I recommend selling the pair today with the target of 1.0927, as it was fixed below the level of 1.1024. A stop-loss order above the level of 1.1029.
It will be possible to buy the pair after the close above the downward trend channel.
GBP/USD – 4H.
The British pound remains hostage to the situation with Brexit. Recent weeks have been positive for the pound. Quotes of the GBP/USD pair has fulfilled the growth to the correction level of 38.2% (1.2501), rebound from it and began the process of falling towards the correctional level of 23.6% (1.2293). None of the indicators on September 17 is brewing divergences. Thus, the signal for the fall of the pair is received.
The information background in recent days is quite neutral. There were no economic reports on Monday from the UK and the US, only a report on industrial production in the US. It seems that traders are saving their strength for tomorrow when Jerome Powell and the Fed will announce the results of the two-day meeting in the evening. Expectations of traders are simple and obvious, have been discussed many times. Minimum – rate reduction by 0.25%, maximum – rate reduction by 0.50%. In both cases, the US currency will have to experience the pressure of traders, in the second case – stronger than in the first.
Well, Brexit is in pause mode. Boris Johnson and top officials of the European Union continue to exchange phrases about the course of negotiations, and the essence of the statements does not match. Johnson "sees" progress in the negotiations and believes that an agreement can be reached before the summit on October 17-18, the European Union notes the lack of any progress. In any case, even if there is progress in the negotiations, ordinary traders do not know anything about it. It's even hard to imagine how the border problem between Ireland and Northern Ireland could be solved.
Today, the Supreme Court of Great Britain will consider the case of the release of Parliament by Prime Minister Boris Johnson. After the Court of Edinburgh found Johnson's actions illegal, the chances that the unplanned vacation of deputies will end prematurely increased significantly. It is noted that the Supreme Court can make two decisions: either to cancel Johnson's decision, recognizing the current parliamentary session incomplete or to declare Johnson's actions illegal and demand that Parliament be convened again. In any case, a new shadow will be cast on Johnson's reputation.
What to expect from the pound/dollar currency pair today?
The pound/dollar pair executed a release from the correction level of 38.2% (1.2501). Thus, I expect the continuation of the fall of quotations on Tuesday, September 17, in the direction of the Fibo level of 23.6% (1.2293). Economic news from the UK is not expected again, but at the same time, I recommend that you continue to follow any Brexit related information. Fixing the pair's rate above the Fibo level of 38.2% will work in favor of the British pound and in favor of resuming growth in the direction of the next correction level of 50.0% (1.2668).
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I recommend buying the pair with a target of 1.2668 and a stop-loss order below the level of 1.2501 if a close above the Fibo level of 38.2% is performed.
I recommend selling the pair with the target of 1.2308, since a rebound from the level of 1.2501 was performed, with the stop-loss order above the Fibo level of 38.2%.
