EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair made another return to the correction level of 100.0% (1.1107) and another rebound from it with a new reversal in favor of the US dollar. Thus, the total number of rebounds from this level is already two. In addition, there is a bearish divergence in the CCI indicator, which also allows you to count on a slight drop in the euro/dollar pair in the direction of the correction level of 127.2% (1.1025). The key event of the day is the evening publication of the minutes of the Fed meeting in July. It will set out the main theses, opinions of members of the FOMC committee on economic prospects, the current state of the US economy, the threats of recession for the world economy and the US economy, as well as proposals for future changes in monetary policy. I believe that traders will not receive fundamentally new information today, as the mood of the Fed and Jerome Powell is clear from without the Fed's protocol. However, you should always be prepared for any surprises. In general, I am counting on one of two options. First: the market will not learn anything new from the protocol, the reaction of traders will not follow. Second, the protocol will contain specific signals about the Fed's readiness to reduce the rate at the next meeting in September. And this option can cause the sale of the US dollar. However, the "technique" is working against him now. Before fixing quotes of the pair above the Fibo level of 100.0%, I do not recommend considering purchases. Closing above the level of 1.1107 will allow traders to expect some growth in the direction of the correction level of 76.4% (1.1180).
The Fibo grid is built on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
The EUR/USD pair rebounded from the correction level of 100.0% (1.1107) and I recommend selling with the target of 1.1025, with the stop-loss order above the level of 1.1107.
I recommend buying the EUR/USD pair with a target of 1.1180, and with a stop-loss level of 1.1107, if closing is performed above the correction level of 100.0%.
GBP/USD – 4H.
Donald Tusk rejected the proposal of British Prime Minister Boris Johnson to abolish the backstop regime on the Irish island. The President of the European Council said that the "backstop" regime is a kind of insurance for the emergence of a rigid border between the two States on the island of Ireland. Earlier, Johnson called "backstop" anti-democratic and not corresponding to the sovereignty of the United Kingdom. The essence of the "backstop" mechanism is that Northern Ireland will continue to remain in the Customs Union and the Single European Market after the onset of the Brexit transition period. This option does not suit Johnson and the UK. And now, a month after taking office as Prime Minister, Johnson goes to Europe to personally negotiate with German Chancellor Angela Merkel and French President Emmanuel Macron on changes to the current agreement on Brexit. However, hopes that Boris Johnson will be able to agree with the EU leaders is extremely small. Germany takes a tough position on the issue of Britain's withdrawal from the European Union and believes that this process should be completed as soon as possible, and not permanently postponed to a later date. France is ready for dialogue but is not ready to renegotiate the agreement, which was the result of 2 years of work. Thus, the European Union clearly shows London that the agreement will not be revised. Thus, Johnson's trip to France and Germany can be a mere formality. Well, the pound sterling is still difficult to resist the US currency. It was not possible to close above the correction level of 127.2% (1.2180), so now the pound/dollar pair can rush down again. Two rebounds from the level of 127.2% speak in favor of this. And in general, the pound continues to remain in disfavor with traders. The political and economic situation in the UK makes traders avoid buying the British currency. It will be possible to expect the pound to grow after the closing of the quotes above the Fibo level of 127.2%.
The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.
Forecast for GBP/USD and trading recommendations:
The GBP/USD pair may resume the process of falling. Thus, I recommend selling the pair with a target of 1.1853, with the stop-loss order above the level of 1.2180, since 2 rebounds from the Fibo level of 127.2% were completed.
I recommend buying the pair with the target of 1.2437 and with the stop-loss order below the level of 127.2% if the closure is performed above the level of 1.2180.
