EUR / USD
On August 10, the EUR/USD pair lost about 50 pips and thus, it continued to build the assumed first wave as part of a new downward trend section. If this assumption is correct (and the wave structure of the ascending part of the trend looks fully completed), then the decline in quotes will continue in the near future with the first targets located near the level of 23.6% and 38.2% Fibonacci. On the other hand, a successful attempt to break the 0.0% Fibonacci level will indicate the complication of the upward trend.
Fundamental component:
On Monday, August 10, the markets continued to relax in some way. At the beginning of the new week, there was practically no economic information either in America or in Europe. Thus, the markets had nothing to consider. Today, two indices of the ZEW Institute were released in Germany, which showed that the current assessment of economic conditions in the country with the strongest economy in the European Union remains extremely low. The report showed -81.3 in August, although it was -68.8 back in July. That is, the mood of investors is deteriorating. Perhaps, due to the high probability of a new wave of pandemic in the European Union or for other reasons. But in the future, which month in a row investors are looking with optimism, the corresponding report showed a value of 71.5, which is higher than the previous month and the forecast. In the European Union, investors also expect a bright future, as the economic sentiment index rose to 64. Demand for the European currency rose in the first half of the day, which may be partly due to these indices, although they are not considered important. Meanwhile, during another briefing by Donald Trump near the White House, an unknown person opened fire with a pistol. It is not known exactly where this man was shooting and what his intentions were (he was hardly going to inflict damage on the president through the walls of the White House), but the president's press conference was interrupted. A little later it became known that the shooter was wounded, detained and taken to the hospital, but details of the incident are being investigated.
General conclusions and recommendations:
The euro/dollar pair has supposedly completed the construction of the upward wave C in B. Thus, at this time, I do not recommend new purchases of the instrument, but I recommend closing the old ones. I also recommend starting to look closely at sales with the first targets located around the estimated 1.1634 and 1.1465, which equates to 23.6% and 38.2% Fibonacci.
GBP / USD
On August 10, the GBP/USD pair gained about 15 pips. However, an unsuccessful attempt to break through the 127.2% Fibonacci mark still indicates the completion of the upward trend section. Interestingly, both major instruments of the currency market have supposedly completed the formation of an upward set of waves. Thus, despite the small deviation of quotes from the previously reached maximums, the probability of further decline is high.
Fundamental component:
In the UK, unemployment and wage figures have become known today. It turned out that unemployment remained unchanged at 3.9% in June, although market expectations were 4.2%. On the other hand, the number of applications for unemployment benefits increased by 94.4 thousand in July, although the markets were waiting for no more than 10 thousand. The average wage in the UK declined by 1.2% in June. Thus, in general, the package of statistics is quite contradictory, but still, the most important indicator of unemployment pleased us. Thanks to it, demand for the pound has grown.
General conclusions and recommendations:
The pound/dollar pair is expected to have completed an upward wave 5 around 1.3183. Therefore, at this time, I recommend to close all purchases at least until a successful attempt to break through the 127.2% Fibonacci level and tune in to a possible long-term decline in quotes within a new downward trend section with the first targets located around 1.2832 and 1.2719. which equates to 38.2% and 50.0% Fibonacci.
