08.07.202111:18 Forex Analysis & Reviews: EUR/USD analysis and forecast for July 8, 2021

The main event of the entire trading week was the publication of the minutes of the last meeting of the Open Market Committee (FOMC). As before, the main attention in the minutes of the June meeting of the Fed leaders was paid to a sharp jump in inflation. Most Fed officials still consider this a temporary phenomenon, which is mainly due to the low level of supply. At the same time, almost all the leaders of the Federal Reserve stressed that the previous forecasts for inflation were overstated. Now, regarding the most relevant topic for the markets, which concerns the timing of the beginning of the tightening of monetary policy by the US Central Bank. I would like to emphasize right away that specific dates were not specified. However, some managers believe that the program of buying mortgage securities should be reduced earlier than the volume of buying treasury bonds.

Now about employment. All the leaders of the Federal Reserve agreed that employment is still far from pandemic values. However, during the summer, this problem will cease to be so urgent. However, given the recent Nonfarm, it is not too relevant even now. But it is necessary for monetary men to talk about something, to give the markets at least some food for thought. As for COVID-19, the FOMC members agreed that the successful vaccination program of the US population contributes to even greater economic activity and improved employment. In general, the tone of the minutes of the last FOMC meeting was maintained in a rather optimistic tone. It can also be judged by the fact that almost all Fed leaders believe that economic activity and employment have improved recently and the economic recovery from the negative effects of COVID-19 is happening faster than previously thought. Naturally, such a positive assessment of the leading world economy could support the US dollar in pair with the single European currency. Although we did not learn anything radically new from yesterday's FOMC protocols.


Exchange Rates 08.07.2021 analysis

After the euro bulls failed to pass the red Tenkan line of the Ichimoku indicator on the rise on July 6 and the course turned down after these unsuccessful attempts, it became clear that one of the key support zones 1.1810-1.1800 is in the focus of the market. The technical picture for EUR/USD and the FOMC protocols served the US dollar well and contributed to its strengthening yesterday's strengthening. A characteristic and very important point is the closing price of yesterday's trading under the level of 1.1800. However, let me remind you that it would be incorrect to draw unambiguous conclusions about the truth of the breakdown of this mark for one closed candle, even if it is a daily one. At the moment of writing the article, the pair is moderately strengthening and trying to return above the price zone 1.1810-1.1800 passed the day before. What will come out of this will become known only after the completion of today's trading.

If we consider trading ideas, then sales are still the most relevant. However, it is very risky to sell near unconfirmed broken support, and there are no corresponding signals for purchases yet. At least on the daily EUR/USD chart. If a model or a combination of candlesticks appears on H4, indicating a possible growth, then you can try to buy with the goals of 1.1830, 1.1860, and 1.1900. But already near these marks, in order not to sell at the very bottom of the market, we are looking for options (signals) to open short positions. In conclusion, I would like to remind you that the main events of today will be the introduction of ECB President Christine Lagarde and the ECB report on monetary policy. These events only add uncertainty to the current course of trading on the euro/dollar.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Ivan Aleksandrov,
Especialista em análise na InstaForex
© 2007-2022
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