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EUR/USD: Trading Plan for the US Session on July 26 (Analysis of Morning Trades)

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In my morning forecast, I paid attention to the level of 1.0847 and planned to make trading decisions from it. Let's look at the 5-minute chart and see what happened there. A decline and the formation of a false breakout provided a buying point for the euro, resulting in the pair rising to around 1.0870, yielding about 20 points of profit. The technical picture for the second half of the day has hardly been revised.

For Opening Long Positions on EUR/USD:

We are expecting very interesting statistics from the US, but the reaction to them may be much more restrained than to yesterday's GDP data. The core personal consumption expenditures index and the levels of consumer spending and income in the US will be of greater interest. Less attention will be paid to the University of Michigan consumer sentiment index and inflation expectations. In case of a decline in the pair, the formation of a false breakout at 1.0847, similar to what I discussed above, will be a suitable condition for building up long positions in anticipation of a surge in the pair with a prospect of updating 1.0870 – resistance, above which it has not yet managed to break through. A breakout and an update from top to bottom of this range will strengthen the pair with a chance to rise to the area of 1.0896. The farthest target will be the maximum of 1.0917, where I will take profit. In the scenario of a decline in EUR/USD and a lack of activity around 1.0847 in the second half of the day, and since this level has already worked itself out once, sellers will regain the initiative at the end of the week and start taking active actions in anticipation of further decline. In this case, I will only enter after forming a false breakout around the next lower boundary of the sideways channel 1.0827. I plan to open long positions immediately on a rebound from 1.0808, aiming for an upward correction of 30-35 points intraday.

For Opening Short Positions on EUR/USD:

Sellers can only rely on the resistance at 1.0870, where a false breakout will confirm the presence of large players betting on the euro's decline, providing a suitable entry point for short positions aiming to lower EUR/USD to the support of 1.0847 – the middle of the channel, where the moving averages are also located, supporting the bulls. A breakout and consolidation below this range, as well as a reverse test from bottom to top, will provide another selling point, with a move towards 1.0827, where I expect to see more active buyer participation. The farthest target will be the area of 1.0808, where I will take profit. In case of an upward move in EUR/USD in the second half of the day, and the absence of bears at 1.0870 at the end of the week, buyers will feel empowered to aim for a larger rise. In this case, I will postpone sales until the next resistance test at 1.0896. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately on a rebound from 1.0917, aiming for a downward correction of 30-35 points.

In the COT report (Commitment of Traders) for July 16, there was a decrease in short and an increase in long positions. It is evident that talks around the reduction of interest rates in the US and the pause planned by the European Central Bank have fueled demand for risk assets, including the euro, supporting market growth. But after all the important data was published and decisions were made – talking about the ECB meeting and maintaining rates unchanged, the market has calmed down, which may last until the end of this month. Only GDP data will be able to cause a spike in volatility. For this reason, it is best to stick to cautious trading within the channel. The COT report indicates that long non-commercial positions rose by 14,108 to the level of 179,937, while short non-commercial positions fell by 7,018 to the level of 155,188. As a result, the spread between long and short positions decreased by 1,101.

Indicator Signals:

Moving Averages:

Trading is below the 30 and 50-day moving averages, indicating a euro decline.

Note: The period and prices of the moving averages are considered by the author on the H1 hourly chart and differ from the general definition of classical daily moving averages on the D1 daily chart.

Bollinger Bands:

In case of a decline, the lower boundary of the indicator around 1.0829 will act as support.

Indicator Descriptions:

Moving Average (MA): Defines the current trend by smoothing volatility and noise. Period 50. Marked in yellow on the chart.

Moving Average (MA): Defines the current trend by smoothing volatility and noise. Period 30. Marked in green on the chart.

MACD Indicator (Moving Average Convergence/Divergence): Fast EMA period 12, Slow EMA period 26, SMA period 9.

Bollinger Bands: Period 20.

Non-commercial traders: Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting certain requirements.

Long non-commercial positions: Represent the total long open position of non-commercial traders.

Short non-commercial positions: Represent the total short open position of non-commercial traders.

Total non-commercial net position: The difference between short and long positions of non-commercial traders.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD: Simple Trading Tips for Beginner Traders on July 26 (US Session)

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Analysis of Trades and Tips for Trading the British Pound

The test of the 1.2872 price occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's further upward potential. For this reason, I did not buy the pound while the trend was downward, and I was correct. The second test of this price allowed me to enter the market to sell the pound, as the MACD indicator was already in the overbought area and decreasing. As a result, the pair declined by 20 points. Ahead, we have a lot of important data. Expected figures include the core personal consumption expenditures index, changes in consumer spending levels, changes in US household income levels, the University of Michigan consumer sentiment index, and inflation expectations. Weak statistics will lead to a strengthening of the pound and a fall in the dollar. In the case of strong statistics, the pair will continue to decline. Regarding the intraday strategy, I plan to act based on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.2874 (green line on the chart) with a target of rising to the level of 1.2907 (thicker green line on the chart). At the 1.2907 point, I will exit my buy positions and open sell positions in the opposite direction, expecting a move of 30-35 points from the level. A strong upward movement in the pound today can be expected after weak US data. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting its upward movement from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2856 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. Growth to the target levels of 1.2874 and 1.2907 can be expected.

Sell Signal

Scenario #1: I will sell the pound after the level of 1.2856 (red line on the chart) is updated, which will lead to a quick drop in the pair. The key target for sellers will be the 1.2818 level, where I will exit my sell positions and immediately open buy positions in the opposite direction, expecting a move of 20-25 points from the level. Sellers are expected to become active following a significant correction and strong data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting its downward movement from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2874 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the target levels of 1.2856 and 1.2818 can be expected.

Chart Details:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: Approximate price for setting Take Profit or fixing profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: Approximate price for setting Take Profit or fixing profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders on the forex market must make entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp exchange rate fluctuations. If you decide to trade during the release of news, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on current market conditions is generally a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Simple Trading Tips for Beginner Traders on July 26 (US Session)

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Analysis of Trades and Tips for Trading the Euro

The test of the 1.0851 price occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's further downward potential. For this reason, I did not sell the euro. A second test of this price allowed me to enter the market with a buy order for the euro, resulting in a 15-point rise in the pair. Ahead, we have a lot of important data. Expected figures include the core personal consumption expenditures index, changes in consumer spending levels, changes in US household income levels, the University of Michigan consumer sentiment index, and inflation expectations. Weak US economic data will lead to a strengthening of the euro and a decline in the dollar. Regarding the intraday strategy, I plan to base my actions on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the euro when it reaches around 1.0870 (green line on the chart), targeting a rise to 1.0905. At the 1.0905 point, I will exit the market and immediately buy the euro, expecting a move of 30-35 points from the entry point. A strong upward movement in EUR/USD can be expected today after weak US statistics. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0852 price and the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward reversal in the market. Growth to the opposite levels of 1.0870 and 1.0905 can be expected.

Sell Signal

Scenario #1: I will sell the euro when it reaches the level of 1.0852 (red line on the chart). The target will be the 1.0822 level, where I plan to exit the market and immediately buy the euro, expecting a move of 20-25 points. Pressure on the pair will return if strong US economic data is released. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.0870 price and the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal in the market. A decline to the opposite levels of 1.0852 and 1.0822 can be expected.

Chart Details:

• Thin green line: The entry price for buying the trading instrument.
• Thick green line: The approximate price at which you can set Take Profit or secure your profits, as further growth above this level is unlikely.
• Thin red line: The entry price for selling the trading instrument.
• Thick red line: The approximate price at which you can set Take Profit or secure your profits, as further decline below this level is unlikely.
• MACD Indicator: Consider the overbought and oversold zones when entering the market.

Important:

Beginner traders must make entry decisions very carefully. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp fluctuations. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without setting stop-loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

Remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD Analysis on July 26. Market Maintains Downward Momentum

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The wave pattern for GBP/USD remains quite complex and ambiguous. For a while, the wave structure looked convincing, suggesting the formation of a downward wave set with targets below the 1.2300 level. However, in practice, demand for the US currency increased too strongly to realize this scenario.

Currently, the wave pattern has become completely unreadable. I strive to use simple structures in my analysis, as complex ones have too many nuances and ambiguities. We are now seeing an upward wave that has overlapped a downward wave, which in turn overlapped the previous upward wave, which overlapped the previous downward wave. The only assumption is an expanding triangle with the upper boundary around the 1.3000 level and the support line around the 1.2600 level. Last week, the upper boundary of the triangle was reached, and the failed attempt to break it indicates the market's readiness to form a downward wave set.

The Pound Is Ready to Continue Falling

The GBP/USD exchange rate rose by 10 basis points on Friday, following a 50 basis point drop the previous day. This suggests that the market noted the strong growth of the American economy in the second quarter. It is puzzling why the EUR/USD pair barely reacted, but it is important to note that the euro and the pound have been trading very differently in recent months. Each of these currencies has its own path and economic backdrop.

In my opinion, the key point for the pound is the action on the upper line of the expanding triangle. If the Federal Reserve decides to lower the interest rate next week (which seems unlikely), and the Nonfarm Payrolls and unemployment reports are again worse than expected, demand for the US currency may fall, and the GBP/USD could return to the peaks reached on July 17. However, the US economy cannot continuously disappoint, and the GDP report this week should not leave even the most ardent skeptics indifferent. Based on this, I believe the GBP/USD will continue to fall, and negative news from the US (which will likely come from time to time) may be used by the market for pullbacks.

Today, the US released the PCE index, which is considered quite important. Its value was 2.6%, almost in line with market expectations. It accelerated by 0.1% year-on-year and by 0.2% month-on-month. Consequently, core and basic inflation may slightly slow their deceleration. Therefore, I do not believe that values will be reached by September that would allow the Fed to start easing monetary policy.

General Conclusions

The wave pattern for GBP/USD still suggests a decline. If a new upward trend segment started on April 22, it has already taken on a five-wave form. Consequently, at least a three-wave correction should now be expected. The failed attempt to break the upper boundary of the triangle indicates the market's readiness to form a downward wave set. In my opinion, in the near future, it is worth considering selling the GBP/USD with targets around 1.2820 and 1.2627, corresponding to 23.6% and 38.2% Fibonacci retracement levels.

At a larger wave scale, the wave pattern has transformed. We can now assume the formation of a complex and extended upward corrective structure. Currently, it's a three-wave pattern, but it could transform into a five-wave structure, potentially taking several more months to complete.

Basic Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are hard to trade and often change.
2. If there is no confidence in the market's direction, it is better not to enter.
3. There can never be 100% certainty in the direction of movement. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com.

XAU/USD. Review and Analysis

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Today, the precious metal is gaining some positive momentum and appears to have halted a two-day losing streak in response to US macroeconomic data. The better-than-expected GDP report released on Thursday aligned with the view of a strong economy. According to additional data, inflation slowed in the second quarter of 2024, bringing some stability to financial markets. Consequently, this diverted funds away from the traditionally safe-haven precious metal.

However, amid expectations that the Federal Reserve will begin its rate-cutting cycle in September, the XAU/USD pair has shown some resilience below the 50-day Simple Moving Average (SMA)

These expectations also keep the US dollar below the two-week high reached on Wednesday, helping gold attract some buyers. Nevertheless, the upward potential remains limited as traders await the release of the US Personal Consumption Expenditures (PCE) price index later today during the American session for cues on Fed policy. This could spur demand for the US dollar, putting new pressure on the non-yielding yellow metal.

From a technical perspective, gold has shown some resilience for the second consecutive day below the 50-day SMA, seemingly breaking a two-day losing streak. Therefore, some selling below the overnight swing low around $2355 is necessary to support the prospects of continuing the recent corrective decline from the historic high reached last week.

Additionally, the oscillators on the daily chart have just started gaining negative momentum, suggesting that the path of least resistance for XAU/USD is downward. Any further recovery is likely to attract new sellers around the $2380 level, the upper boundary of the overnight swing. The next major resistance is at the $2390 level, followed by the $2400 level. A breakthrough above these levels could trigger a new wave of short-covering, potentially driving the metal up to the weekly high near $2432 level.

If the price drops below the 50-day SMA and breaks through the $2350 level, it would indicate a new bearish signal. Subsequently, gold may test the 100-day SMA, which is currently around the $2325 level and expected to provide key support. However, a breach of this level could lead to further declines, potentially testing levels below $2300 or the June monthly swing lows.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Signals for GBP/USD for July 26-29, 2024: buy above 1.2860 (21 SMA - double bottom)

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The British pound (GBP/USD) is trading around 1.2854, bouncing back after forming a double bottom pattern, which means that there could be a technical bounce in the next few days only if the pair consolidates above 1.2860.

If the pound breaks the secondary downtrend channel, we could expect an upward acceleration and GBP/USD could reach the 200 EMA located at 1.2902 and even 6/8 Murray located at 1.2963.

Our outlook could be positive as we believe that the GBP/USD pair is showing signs of exhaustion. So, the bullish cycle is likely to resume in the coming days.

In the meantime, we could look for opportunities to buy above the 21 SMA with the target at the psychological level of 1.30.

If the British pound continues to fall, the double bottom pattern would be invalidated and we could expect GBP/USD to reach the Murray 5/8 at 1.2817.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Signals for EUR/USD for July 26-29, 2024: buy if breaks 1.0665 (21 SMA - 2/8 Murray)

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Early in the American session, the EUR/USD pair is trading at 1.0860, above the 200 EMA, and above the 21 SMA with a slightly bullish bias. According to the H4 chart, the euro is approaching a strong resistance located at 2/8 of Murray around 1.0864.

If the euro breaks the downtrend channel and consolidates above 1.0865, we could look for buying opportunities, with targets at 1.0925 and 1.0986.

Below 4/8 Murray, we could clearly sell and place a stop loss above this area as the Euro is still trading within the downtrend channel and could resume its bearish cycle.

Since the eagle indicator is showing a positive signal and any pullback is highly possible as long as EUR/USD trades above 1.0828, it will be seen as a signal to buy.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Signals for GOLD (XAU/USD) for July 26-29, 2024: buy above $ 2,375 (200 EMA - 4/8 Murray)

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Early in the American session, Gold is trading around 2,373, around the 200 EMA, and around 4/8 Murray with a technical bounce.

On the H4 chart, we can see that Gold reached the bottom of the downtrend channel around 2,350. From this level, Gold made a strong technical bounce and is currently showing a positive signal.

We suppose that if it consolidates above 2,375 in the next few hours, the price could continue its rise and reach 2,390 and even the top of the downtrend channel around 2,405.

Gold could resume its bearish cycle if it consolidates below 2,375. Then, it could reach 61.8% Fibonacci level around 2,368 and even 3/8 of Murray at 2,343.

Since the eagle indicator is showing oversold signals, we believe that gold will continue to rise in the next few hours. So, we will look for opportunities to buy above 2,375, with targets at 2,390 and 2,400.

The material has been provided by InstaForex Company - www.instaforex.com.

Forecast of EUR/USD on July 26, 2024

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On Thursday, the EUR/USD pair returned to the 76.4% Fibonacci level at 1.0858, and on Friday, it made another return to this level. A rebound from 1.0858 would benefit the US dollar and resume the decline towards the 61.8% Fibonacci level at 1.0822. Consolidation of the pair above 1.0858 will increase the likelihood of continued growth towards the next corrective level at 1.0917.

The wave situation has become somewhat more complex but remains largely clear. The last upward wave broke the peak of the previous wave and can be considered complete. Thus, the bears have begun forming a corrective wave. To reverse the "bullish" trend, the bears need to break the low of the previous downward wave, around 1.0668. They need to go down another 180 points for this. Given current trader activity, this may take 2-3 weeks, one of which has already elapsed. A rapid decline is unlikely.

Thursday's information background supported both bulls and bears once more. The most interest among traders was in the US GDP and durable goods orders reports, which were released simultaneously yesterday. While the GDP report was significantly higher than even the most optimistic forecasts, the durable goods orders report was a complete failure. GDP grew by 2.8% quarter-over-quarter in the second quarter (preliminary estimate), while orders fell by 6.6% against expectations of +0.3%. Thus, it can be said that the GDP report could have strongly supported the dollar, but it was entirely overshadowed by the orders report. In my opinion, the GDP report is more significant, so I believe the bears missed a prime opportunity to enhance their position yesterday. Currently, the "bullish" trend remains, and all the bears' efforts are only enough for a corrective wave.

On the 4-hour chart, the pair reversed in favor of the US dollar and consolidated below the 38.2% corrective level at 1.0876. Thus, the decline may continue towards the 50.0% Fibonacci level at 1.0794. No emerging divergences are observed today in any indicator. The decline has continued since a "bearish" divergence was formed on the CCI indicator.

Commitments of Traders (COT) Report:

During the last reporting week, speculators opened 14,108 long positions and closed 7,018 short positions. The sentiment of the "Non-commercial" group changed to "bearish" several weeks ago, but currently, bulls are dominating again. The total number of long positions held by speculators is now 180,000, while short positions stand at 155,000.

I continue to believe that the situation will shift in favor of the bears. I see no long-term reasons to buy the euro, as the ECB has started easing monetary policy, which will lower the yields of bank deposits and government bonds. In the US, these yields will remain high for several more months, making the dollar more attractive to investors. The potential for the euro to decline is substantial even according to COT reports. However, one should not forget about the graphical analysis, which currently does not confidently suggest a strong decline in the euro.

News Calendar for the US and Eurozone:

US:

• Personal Consumption Expenditures (PCE) Price Index (12:30 UTC)
• Personal Income and Spending (12:30 UTC)
• University of Michigan Consumer Sentiment Index (14:00 UTC)

On July 26, the economic calendar includes three entries for the US. The influence of the information background on market sentiment today may be moderate, mainly in the second half of the day.

Forecast for EUR/USD and Trading Advice:

Selling the pair was possible upon consolidation below the 1.0917 level on the hourly chart, targeting 1.0858. Since the bears have managed to break through the 1.0858 level, sales can be maintained with targets at 1.0822 and 1.0785–1.0797 until the pair closes above 1.0858. I would not consider buying in the coming days, as the bears have consolidated below the upward trend channel.

Fibonacci grids are plotted at 1.0917–1.0668 on the hourly chart and 1.0450–1.1139 on the 4-hour chart.

The material has been provided by InstaForex Company - www.instaforex.com.

Forecast of GBP/USD on July 26, 2024

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On the hourly chart, the GBP/USD pair consolidated below the zone of 1.2892–1.2931 on Thursday, allowing for further decline towards the next support zone of 1.2788–1.2801. I still do not consider the possibility of the pound rising for now, as the pair recently consolidated below the upward trend channel. A rebound from the zone of 1.2788–1.2801 may signal a minor rise for the pound.

The wave situation changed last week. The last completed downward wave (which started forming on June 12) managed to break the low of the previous downward wave, and the last upward wave managed to break the peak of the previous upward wave. Thus, we are currently dealing with a "bullish" trend. The pound's rise may continue, but traders now need to form a corrective downward wave. There is no talk of a trend change to "bearish" from a wave perspective yet. For this to happen, the pair needs to break the last low from July 2. Whether the bears have enough strength to reach this level remains uncertain.

Thursday's information background allowed the dollar to continue its rise and for the bears to launch attacks. The American economy grew stronger in the second quarter than expected, and traders paid less attention to the report on durable goods orders for the pound than for the euro. This could be because the pound has shown much stronger growth in recent months compared to the euro. Consequently, it should also show a stronger decline. Additionally, it's worth noting that the ECB has begun easing monetary policy, unlike the Fed and the Bank of England. Thus, the European currency has more reasons for decline than the British pound. The Bank of England is in a position where rate cuts could begin at any meeting. However, the longer the British regulator waits, the stronger the positions of the British currency and bulls.

On the 4-hour chart, the pair rebounded from 1.3044 level with the formation of a "bearish" divergence on the RSI indicator. Earlier, this same indicator entered the overbought zone. Thus, several sell signals were generated on the higher timeframe. The decline may now continue towards the 61.8% retracement level at 1.2745. On the hourly chart, the bears closed below the trend channel, which also allows for continued pair decline.

Commitments of Traders (COT) Report

The sentiment of the "Non-commercial" trader category became even more "bullish" over the last reporting week. The number of long positions held by speculators increased by 47,971, while the number of short positions decreased by 241 units. The bulls still have a solid advantage. The gap between the number of long and short positions is now 133,000: 183,000 vs. 50,000.

In my opinion, the prospects for the pound's decline remain, but the COT reports currently suggest otherwise. Over the last 3 months, the number of long positions has grown from 98,000 to 183,000, while the number of short positions has decreased from 54,000 to 50,000. I believe that over time, professional traders will start shedding long positions or increasing short positions again, as all possible factors for buying the British pound have already been exhausted. However, it should not be forgotten that this is merely a hypothesis. Graphic analysis suggests a likely decline, but it does not negate the weakness of the bears, who couldn't even take the 1.2620 level.

News Calendar for the US and the UK:

US:

• Personal Consumption Expenditures (PCE) Price Index (12:30 UTC)
• Personal Income and Spending (12:30 UTC)
• University of Michigan Consumer Sentiment Index (14:00 UTC)

Friday's economic events calendar includes several entries. The influence of the information background on market sentiment today may be moderate in strength and predominantly in the second half of the day.

Forecast for GBP/USD and Trading Advice:

Sales of the pound were possible upon a rebound from the level of 1.3044 on the 4-hour chart with the target of the lower boundary of the upward trend channel. These sales can now be kept open with the target zone of 1.2788–1.2801. I consider buying the pound in the next couple of days to be impractical.

Fibonacci grids are built at 1.2892–1.2298 on the hourly chart and at 1.4248–1.0404 on the 4-hour chart.

The material has been provided by InstaForex Company - www.instaforex.com.

Video market update for July 26, 2024

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Potential for the further rally on USD/JPY

The material has been provided by InstaForex Company - www.instaforex.com.

Forex forecast 07/26/2024: EUR/USD,GBP/USD, SP500 and Bitcoin from Sebastian Seliga

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We introduce you to the daily updated section of Forex analytics where you will find reviews from forex experts, up-to-date monitoring of financial information as well as online forecasts of exchange rates of the US dollar, euro, ruble, bitcoin, and other currencies for today, tomorrow and this trading week.

Video Agenda:

00:00 INTRO

00:11 Totay's key events: Core PCE Price Index, PCE Price index, Personal Spending, Michigan Consumer Sentiment, U.S. Baker Hughes Oil Rig Count

01:31 EUR/USD

03:14 GBP/USD

05:35 SP500

07:06 BTC/USD

Useful links:

My other articles are available in this section

InstaForex course for beginners

Popular Analytics

Open trading account

Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga

The material has been provided by InstaForex Company - www.instaforex.com.

USD/JPY: trading tips for beginners for the European session on July 26

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Overview of trading and tips on USD/JPY

The price test of 152.75 occurred when the MACD indicator was starting to rise from the zero mark, confirming the correct entry point for buying the dollar in anticipation of a correction. As a result, USD/JPY rose by more than 110 pips. Strong U.S. GDP data became the primary catalyst for the pair's growth in the afternoon. The bounce trades at 153.89, which I highlighted in my forecast, yielded around 50 pips of profit. It is evident that profit-taking is taking place in the market, and the dollar could not remain oversold for long, even though many economists and market participants expect a rate hike from the Bank of Japan next week. Today, the situation should calm down somewhat, so significant movements in the first half of the day are unlikely. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.

Buy signals

Scenario No. 1. Today, I plan to buy USD/JPY when the price reaches the entry point around 154.01, plotted by the green line on the chart, with the goal of rising to the level of 154.97 plotted by the thicker green line on the chart. Around 154.97, I will exit long positions and open short ones in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from that level. We can count on the pair to rise today as the bullish correction continues. Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2. I also plan to buy USD/JPY today in case of two consecutive tests of 153.44 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 154.01 and 154.97.

Sell signals

Scenario No. 1. I plan to sell USD/JPY today only after testing the level of 153.44 plotted by the red line on the chart, which will lead to a rapid decline in the price. The key target for sellers will be 152.65, where I will exit short positions and immediately open long ones in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from that level. Pressure on USD/JPY may return at any moment, especially if the price fails to consolidate around the intraday high. Before selling, make sure that the MACD indicator is below the zero mark and just starting to decline.

Scenario No. 2. I also plan to sell USD/JPY today in case of two consecutive price tests at 154.01 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels, 153.44 and 152.65.

What's on the chart:

The thin green line is the entry price at which you can buy the trading instrument.

The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.

The thin red line is the entry price at which you can sell the trading instrument.

The thick red line is the price where you can set Take-Profit (TP) or manually close positions, as further decline below this level is unlikely.

MACD line: it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders in the forex market need to be very careful when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD: trading tips for beginners for the European session on July 26

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Overview of trading and tips on GBP/USD

The price tests I mentioned did not occur in the afternoon. As a result, getting suitable signals for entering the market was impossible. The lack of UK data, with traders ignoring the report on the Confederation of British Industry's industrial trends orders, affected the pound, which continued to lose ground after the strong U.S. GDP data. Today, the UK economic calendar is empty, so the pair will remain under pressure until the next batch of strong U.S. data is released. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.

Buy signals

Scenario No 1. Today, I plan to buy the pound when the price reaches the entry point around 1.2872 plotted by the green line on the chart, with the goal of rising to the level of 1.2907 plotted by the thicker green line on the chart. Around 1.2907, I plan to exit long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the level. It is unlikely that it will be possible to count on a solid rise in the first half of the day. At most, we will see a minor correction after a sell-off in the Asian session. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No 2. I also plan to buy the pound today in case of two consecutive tests of the price at 1.2852 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.2872 and 1.2907.

Sell signals

Scenario No 1. Today, I plan to sell the pound after testing the level of 1.2852 plotted by the red line on the chart, which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2818, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). You can sell the pound if buyers are not active near the intraday high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No 2. I also plan to sell the pound today in case of two consecutive price tests of 1.2872 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.2852 and 1.2818.

What's on the chart:

The thin green line is the entry price at which you can buy the trading instrument.

The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.

The thin red line is the entry price at which you can sell the trading instrument.

The thick red line is the price where you can set Take-Profit (TP) or manually close positions, as further decline below this level is unlikely.

MACD line: it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders in the forex market need to be very careful when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: trading tips for beginners for the European session on July 26

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Overview of trading and tips on EUR/USD

The price test of 1.0864 occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential—especially considering that the U.S. GDP data came in much better than economists' forecasts, which was unfavorable for the euro. Shortly afterward, another price test of 1.0864 occurred while the MACD was in the overbought area, allowing the implementation of Scenario No. 2 for a short position. As a result, EUR/USD dropped more than 20 pips. The data from Germany's IFO Business Climate Indicator, Current Situation Indicator, and Economic Expectations Indicator were mixed. On the one hand, the figures increased, but on the other hand, they fell short of economists' forecasts. The strong U.S. GDP report once again highlighted the importance of the U.S. economy. However, even this did not help the dollar rise against the euro, indicating market participants' concerns ahead of the upcoming Federal Reserve meeting. This morning, aside from a report on Spain's unemployment rate, there is nothing worth highlighting, so the pair might continue its bullish correction into the end of the week. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.

Buy signals

Scenario No 1. Today, you can buy the euro when the price reaches the area around 1.0874 plotted by the green line on the chart, with the goal of rising to the level of 1.0905. At the level of 1.0905, I plan to exit the market and also sell the euro in the opposite direction, counting on a movement of 30-35 pips from the entry point. We can count on the euro to rise today as it continues to correct higher within the channel. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No 2. I am also going to buy the euro today in case of two consecutive tests of the price at 1.0851 when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.0874 and 1.0905.

Sell signals

Scenario No 1. I plan to sell the euro after it reaches the level of 1.0851 plotted by the red line on the chart. The target will be the level of 1.0822, where I am going to exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on EUR/USD will return today if the pair fails to consolidate in the area of the intraday high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No 2. I am also going to sell the euro today in case of two consecutive price tests of 1.0874 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.0851 and 1.0822.

What's on the chart:

The thin green line is the entry price at which you can buy the trading instrument.

The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.

The thin red line is the entry price at which you can sell the trading instrument.

The thick red line is the price where you can set Take-Profit (TP) or manually close positions, as further decline below this level is unlikely.

MACD line: it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders in the forex market need to be very careful when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

Hot forecast for EUR/USD on July 26, 2024

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The situation in the market remains unchanged, and in general, the changes have been purely superficial for the entire week. This is partly due to an almost empty economic calendar. On the other hand, after the sharp increase in political uncertainty in the United States over the past weekend, following Joe Biden's announcement of his withdrawal from the election race, the situation had noticeably become more stable by Monday evening. This also contributed to the normalization of the currency market. Moreover, while at the beginning of the week, American media were trying to hype the potential for an interest rate cut this month, by mid-week, it seemed that everyone had forgotten about it. It appears that nothing will change today either, especially with the Federal Open Market Committee meeting approaching in the middle of next week. The media coverage will likely intensify on Monday, with countless predictions and discussions about the possibility of interest rate cuts.

The corrective cycle slowed down around the 1.0825 level. This was followed by a pullback-stagnant phase, characterized by a typical realignment of trading forces.

On the 4-hour chart, the RSI indicator is moving in the lower area of the 30/50 range, which suggests that the bearish bias remains intact.

In the same time frame, the Alligator's MAs point downwards, aligning with the corrective cycle's direction.

Outlook

Assuming the bearish sentiment persists, the euro could fall to 1.0800. However, it is important to consider that the upward trend generally remains intact, and the current correction still fits within its cyclical phase. Therefore, traders should carefully analyze potential support levels from which the price could initiate a rebound, possibly marking the beginning of a recovery process in the euro.

In terms of the complex indicator analysis, we see that in the short term, technical indicators lack stable signals due to the stagnant phase. Meanwhile, in the intraday period, the indicators reflect a bearish cycle.

The material has been provided by InstaForex Company - www.instaforex.com.

How Mega-Cap Uncertainty Impacted S&P, Nasdaq Drops

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The S&P 500 and Nasdaq Composite ended a volatile session lower on Thursday, failing to recover lost ground from the previous day's tech-driven selloff. Investors struggled with uncertainty over the outlook for mega-caps.

The Dow Jones Industrial Average, on the other hand, extended its morning gains to close higher on strong U.S. gross domestic product data. Small-cap stocks also rose as investors turned away from megacaps. The Russell 2000 (.RUT) rose 1.3%, partly offsetting its mid-cap losses.

Large companies started the day with uncertainty but traded higher in the afternoon, though many of them later fell again. Microsoft (MSFT.O) and Nvidia (NVDA.O) ended the session down 1.7% to 2.4%.

Alphabet (GOOGL.O) fell for a second straight day, falling 3.1% to its lowest since May 6. Meanwhile, Tesla (TSLA.O) rose.

Weak financial results from Google's parent company and the electric car maker hurt the "Magnificent Seven" group of tech stocks on Wednesday, sending the Nasdaq (.IXIC) and S&P 500 (.SPX) to their biggest declines since 2022.

The Cboe Volatility Index (.VIX), known as Wall Street's fear gauge, extended recent gains to close at 18.46, a fresh 14-week high.

A GDP report released Thursday showed the U.S. economy grew 2.8% in the second quarter, well above expectations for a 2% rate cut by the Federal Reserve. Inflation eased and expectations for a potential Federal Reserve rate cut in September remained unchanged.

Investors are eagerly awaiting Friday's consumer spending data to confirm their belief that the Federal Reserve may soon cut rates.

While big names have driven the market to all-time highs this year, Wednesday's selloff has raised concerns that these stocks may be overextended and headed for more volatility ahead.

These concerns have prompted investors to shift money into smaller-cap stocks and other sectors outside mega-cap tech. The S&P Small Cap 600 Index (.SPCY) rose 1.4% on Thursday.

The S&P 500 Index (.SPX) fell 27.91 points, or 0.51%, to 5,399.22, while the Nasdaq Composite (.IXIC) fell 160.69 points, or 0.93%, to 17,181.72. The Dow Jones Industrial Average (.DJI) rose 81.20 points, or 0.20%, to 39,935.07.

Among stocks that saw gains on earnings reports, IBM (IBM.N) rose 4.3%, also helping lift the Dow's blue chips. The tech company beat second-quarter revenue estimates and raised its full-year growth forecast for its software business.

American Airlines (AAL.O) rose 4.2% after the company cut its full-year profit forecast. Southwest Airlines (LUV.N) climbed 5.5% after saying it would make changes such as eliminating open-plan seating and offering extra legroom seats.

The airline and logistics sector also saw gains, with Old Dominion (ODFL.O) up 5.7% and J B Hunt (JBHT.O) up 4.3%. Those moves helped lift the Dow Jones Transportation Average (.DJT) 1.3%.

Ford (F.N) shares fell 18.4% after the automaker's adjusted second-quarter profit missed analysts' expectations. Edwards Lifesciences (EW.N) fell 31.3% after second-quarter revenue fell short.

U.S. exchanges traded 13.23 billion shares, above the 11.60 billion average over the past 20 trading days.

Computer-run macro hedge funds sold $20 billion of stocks on Wednesday and plan to unload at least $25 billion more over the next week after the stocks plunged, one of the biggest risk-offs in a decade, Morgan Stanley said in a statement to institutional clients on Thursday. Following disappointing earnings reports from Tesla (TSLA.O) and Alphabet (GOOGL.O) on Wednesday, investors sold off stocks, sending the tech-heavy Nasdaq Composite Index down 3.6% for its worst day since October 2022.

"The volatility of the last two weeks began with significant rotation," the bank said, citing recent investor moves between small and mega-cap stocks. "However, this has now translated into broad-based deleveraging in the indices (on Wednesday)."

Morgan Stanley warned in a note that if volatility continues in the coming days, the sell-off could intensify significantly. An additional 1% daily decline in global equities could trigger $35 billion in selling, while macro hedge funds could wipe out as much as $110 billion on a 3% daily decline.

The major U.S. stock indexes were up on Thursday afternoon after stronger-than-expected GDP data.

James Koutoulas, CEO of hedge fund Typhon Capital Management, told that despite Wednesday's sell-off, momentum stocks continue to trade above their intrinsic value.

He noted that historically, interest rate hikes have been followed by economic downturns.

"It appears investors are betting on a reversal of that trend," he added in a note to clients.

Hedge funds are becoming increasingly bearish, reducing their long positions, or bets on stocks going up, while maintaining or increasing bets on stocks they think could fall, according to Morgan Stanley.

Portfolio managers were mostly shorting stocks in the information technology, consumer staples and materials sectors.

Goldman Sachs also noted that its clients were increasing their short positions in so-called macro products such as large-cap exchange-traded funds and corporate bonds (ETFs).

Hedge funds ended Wednesday with losses after a big drop in markets, though they generally managed to mitigate losses relative to the major stock indexes.

Global hedge funds lost an average of 0.67%, according to Morgan Stanley, with long/short equity hedge funds in the Americas seeing the biggest decline at 1.04%.

The MSCI All Country World Index (.dMIWD00000PUS) fell 1.67% on Wednesday, while the S&P 500 (.SPX) fell 2.31%.

"Hedge funds are seeing the biggest decline in an otherwise positive year," said Mario Unali, head of investment advisory at Kairos Partners.

The material has been provided by InstaForex Company - www.instaforex.com.

Key events on July 26: fundamental analysis for beginners

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Analysis of macroeconomic reports:

Few macroeconomic events are scheduled for Friday, and none are particularly significant. The event calendars for the European Union, Germany, and the United Kingdom are empty. At the same time, the US docket will feature the University of Michigan's Consumer Sentiment Index, the Personal Consumption Expenditures Price Index, and data on personal income and expenditures. The first two reports might provoke a minor market reaction. As observed yesterday, two much more important reports on GDP and durable goods orders had almost no impact on market trading behavior. Volatility remains low for both instruments.

Analysis of fundamental events:

There is absolutely nothing noteworthy among Friday's fundamental events. No significant speeches or other events are scheduled, so it appears that we won't see any interesting movements today that could offer trading opportunities.

General conclusions:

Today, the market will only have a few US reports to review, which will be released in the afternoon. Therefore, if we are to expect any notable movements, it will likely only occur during the US trading session. It is difficult to predict whether the dollar will continue its rise today. Market movements are very weak, prices are constantly adjusting, and corrections (even local ones) can take a week to materialize.

Basic rules of a trading system:

1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What the charts show:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD (14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy, coupled with effective money management, is key to long-term success in trading.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading plan for GBP/USD on July 26. Simple tips for beginners

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Analyzing Thursday's trades:

GBP/USD on 1H chart

GBP/USD continued its gradual decline on Thursday. The dollar should be appreciating regardless of the macroeconomic backdrop. In the hourly chart, the price has settled below the ascending trend line; the British pound is overbought and unreasonably expensive. It has risen almost without corrections for three months, and the market has already worked out the entire fundamental backdrop in favor of the pound several times. In addition, yesterday's U.S. GDP report showed a more significant increase than expected. Therefore, we believe the U.S. dollar should rise much more strongly than it currently is.

Unfortunately, the market isn't in a rush to sell the pair. The issue seems to be not so much the market's reluctance to sell as its general unwillingness to engage in any transactions. Volatility is not just low; it's low and continuing to decrease.

GBP/USD on 5M chart

The British pound formed two perfect signals in the 5-minute timeframe. First, the pair bounced off the 1.2913 level, then off the 1.2860 level. The first short position could have yielded about 25 pips in profit, and the second position another ten pips. Given the current volatility and the nature of the movements, this profit is a great result. The pound continues to decline at a sluggish pace.

Trading tips on Friday:

In the hourly timeframe, GBP/USD finally has a chance of a minor decline. The pair has breached the ascending trendline, so we might see some correction. Ideally, the pound should drop by at least 400-500 pips. The market has processed all the bullish factors multiple times, the dollar is undervalued, and the Bank of England may start lowering its rates soon. The British currency has more reasons to fall than to rise.

On Friday, beginners may trade within the range of 1.2848-1.2860. Unfortunately, the pair's movements remain very weak, with frequent periods of a local flat.

The key levels to consider on the 5M timeframe are 1.2605-1.2633, 1.2684-1.2693, 1.2748, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145. Today, no significant events are scheduled in the UK, while in the U.S., reports of medium importance on consumer sentiment, personal income and spending, and the personal consumption expenditures price index will be released. These reports may affect market sentiment, but it is unlikely that we will see movements with volatility above 50 pips today...

Basic rules of a trading system:

1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What the charts show:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD (14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy, coupled with effective money management, is key to long-term success in trading.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading plan for EUR/USD on July 26. Simple tips for beginners

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Analyzing Thursday's trades:

EUR/USD on 1H chart

EUR/USD continued to trade in a narrow range on Thursday. Despite the release of at least two reasonably significant reports yesterday, volatility did not increase, and market participants showed little interest in trading. Another important point is that U.S. GDP grew by 2.8%, surpassing forecasts of 2.0-2.5% and the first quarter's figure of 1.4%. This suggests that the U.S. economy remains robust. Secondly, the Federal Reserve may keep rates at their peak without fearing a recession. However, the U.S. dollar failed to appreciate despite favorable conditions. Yes, the durable goods orders report in June disappointed the market, showing a value of -6.6%, significantly worse than forecasts. But which indicator is more important? The state of the entire economy or just the sales of durable goods?

EUR/USD on 5M chart

We didn't even mark any trading signals in the 5-minute timeframe. The chart above clearly shows that the price spent most of the day between the levels of 1.0838 and 1.0856. Trading between these levels was meaningless. It also made no sense to open trades after the price settled below or above this range, as the current volatility did not allow for expecting a solid movement in the intended direction, and Stop Losses would have to be set beyond the opposite level. The risk/reward ratio was initially abysmal.

Trading tips on Friday:

In the hourly timeframe, EUR/USD settled below the ascending channel, allowing it to start a new local downward trend. We believe the euro has fully factored in all the bullish factors, so a significant correction is needed. However, the nature of the movements is best seen in the 24-hour timeframe. It is the same flat range between 1.0650 and 1.1000. Yesterday, the dollar missed a great opportunity to continue its upward movement. Volatility remains low.

On Friday, novice traders may try trading again from the 1.0838-1.0856 area. There will be a few important events today, but yesterday, we saw how important events do not necessarily lead to strong movements. We expect the quotes to move upwards at some point, after which a decline could resume.

The key levels to consider on the 5M timeframe are 1.0526, 1.0568, 1.0611, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971-1.0981. No significant events are planned in the Eurozone on Friday, while the U.S. will release less critical reports on personal income and expenditure, the personal consumption expenditures price index, and the Michigan consumer sentiment index.

Basic rules of a trading system:

1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What the charts show:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD (14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy, coupled with effective money management, is key to long-term success in trading.

The material has been provided by InstaForex Company - www.instaforex.com.

Forecast for EUR/USD on July 26, 2024

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EUR/USD

Most major currencies, oil, gold, and the S&P 500, reached their technical support targets yesterday. Even the yield on 5-year U.S. government bonds hit last week's (and the month's) low. Markets are experiencing a risk-off phase, and as mentioned earlier, this could continue until December.

Strong U.S. data stopped the decline; GDP for Q2 advanced 2.8% versus the 2.0% estimate, and core durable goods orders increased by 0.5% in June. Although structurally, these data are not as rosy; a correction might occur today, smoothly aligning with the wait-and-see mode ahead of the Federal Reserve meeting next week.

The Marlin Oscillator has begun turning from the zero line on the daily chart. Based on its behavior, the correction or consolidation might last two days.

On the 4-hour chart, the Marlin Oscillator broke above the zero line into the uptrend territory. The price is moving below the balance line (red moving average), which currently confirms the corrective nature of this movement and does not suggest a rapid rise. The correction may last until 1.0885, where the price consolidated from July 19-23.

The material has been provided by InstaForex Company - www.instaforex.com.

Forecast for GBP/USD on July 26, 2024

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GBP/USD

Amidst investors' shift away from risk, the British pound fell 55 pips on Thursday, reaching the target support level of 1.2847. The signal line of the Marlin Oscillator has slightly dipped below the boundary of the bearish territory but is now preparing to return to the bullish area.

If this happens, the price is expected to stay above the 1.2847 level for a few days, likely until the Federal Reserve meeting on the 31st.

On the 4-hour chart, the price and the Marlin Oscillator have formed a weak convergence, which is enough for a moderate correction, roughly to the consolidation range of July 19-23 (gray rectangle).

The MACD indicator line has turned downward, showing the direction of the medium-term trend. Therefore, until the Fed meeting, any rise in the pound, even if it exceeds 1.2989, will be corrective.

The material has been provided by InstaForex Company - www.instaforex.com.

Forecast for AUD/USD on July 26, 2024

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AUD/USD

On Thursday, the Australian dollar successfully remained below the 0.6578 level. The price continued to fall to the intermediate level of 0.6525 – the peak of November 6, 2023. The 0.6578 level now serves as a limit for the correction.

The Marlin Oscillator has sharply reversed upward, indicating the seriousness of the correction. It is unlikely that there will be a new decline before the Federal Reserve meeting next week. Today's data on personal income and spending in the U.S. might be received by market participants with caution.

On the 4-hour chart, Marlin has sharply reversed upward. This suggests rapid exhaustion and, as a consequence, moderation in the corrective rise. The aussie may surpass the 0.6578 level, but only briefly. We are waiting for the Fed meeting.

The material has been provided by InstaForex Company - www.instaforex.com.

USD/CAD. Results of the Bank of Canada's July meeting: loonie is headed upwards

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The USD/CAD pair is rapidly climbing, setting new highs. On Thursday night, the price stood at 1.3840—its highest level since April, when the pair reached a high of 1.3845 for the year. If the price continues to rise, USD/CAD buyers will surpass the annual high and move into the 1.39 area. Looking ahead, the pair may also reach the 1.40 area.

The U.S. dollar index has been under pressure for two consecutive days. However, this does not prevent USD/CAD bulls from confidently pushing higher, disregarding the greenback's broad weakness. The pair's rise is primarily due to the Canadian dollar's weakness. The reason is the dovish outcome of the Bank of Canada's July meeting, which was announced on Wednesday.

As a result of the July meeting, the central bank lowered the interest rate by 25 basis points, bringing it down to 4.5%. Ahead of this meeting, there was some intrigue due to the contradictory inflation report published in Canada last week. The report reflected a minor slowdown in the Consumer Price Index and an acceleration in the core CPI. The Canadian labor market also showed mixed results: despite rising unemployment, the growth rate of average hourly wages accelerated to 5.4% in annual terms (up from 5.1% in the previous month).

These figures "sowed doubts and confusion" among some experts, who had anticipated that the Bank of Canada would adopt a wait-and-see stance this month, mainly since the central bank head had repeatedly spoken about a cautious approach to the easing process.

But—no! The Bank of Canada lowered the rate and said that if inflation continues to slow down, the central bank will take additional steps to ease monetary policy at one of the upcoming meetings.

Furthermore, the central bank downwardly revised its economic growth forecast for 2024, citing a significant reduction in consumption due to decreased demand for automotive transport and overseas travel. Furthermore, the central bank noted that Canadians are allocating more of their income to pay off current/accumulated debts. In the published report, the Bank of Canada expects GDP to increase by 1.2% this year, whereas the April forecast had predicted a more substantial growth of 1.5%.

Commenting on the July meeting, Bank of Canada Governor Tiff Macklem delivered dovish messages, stating in particular that the central bank expects further easing of inflationary pressure.

"If inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in our policy interest rate. The timing will depend on how we see these opposing forces playing out," Macklem said.

In response to a question about how many rate cuts to expect by the end of 2024, Macklem rejected the idea the Bank of Canada is now on a predetermined cutting path.

Following the July meeting, most experts concluded that the Bank of Canada will cut rates at two of the three remaining meetings this year. The only factor that could hinder this scenario is if inflation unexpectedly accelerates.

Such prospects have put additional pressure on the Canadian dollar. The USD/CAD pair has been in a strong upward trend for the second consecutive week, rising from 1.3590 to the current level of 1.3840.

The upward trend in USD/CAD is also driven by the rise in risk aversion following the People's Bank of China's decision. During the Asian session on Thursday, the PBOC lowered the rate on its one-year medium-term lending facility to 2.3% from 2.5% previously – just a few days after the central bank announced a cut in the benchmark lending rate to stimulate the economy. This was a rather unexpected move that made investors adopt a cautious stance. According to experts interviewed by Bloomberg, this decision indicates a need to support growth in the second quarter, which turned out worse than expected (China's GDP grew by only 4.7% compared to a forecast of 5.1%).

Thus, the prevailing fundamental background supports further growth in USD/CAD. On all the higher time frames (from H4 and above), the pair is either at the upper line or between the middle and upper lines of the Bollinger Bands indicator, as well as above all lines of the Ichimoku indicator, which has formed a bullish "Parade of Lines" signal on the daily chart. The nearest (and currently main) target for the upward movement is 1.3910, corresponding to the upper line of the Bollinger Bands on the MN timeframe.

The material has been provided by InstaForex Company - www.instaforex.com.

Dollar requires resolve

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The lower levels can't push the market down, and the upper levels don't want to. No matter how much bears on EUR/USD may wish to push the quotes down amid a correction in U.S. stock indexes and Trump trade tensions, the sharp increase in the probability of a Federal Reserve rate cut prevents them from doing so. At the same time, the bulls are reluctant to take action due to concerns about Republican political purges and a deteriorating global risk appetite, which supports the U.S. dollar as a safe-haven currency.

A lot of panic over nothing? Once respected officials retire, their opinions no longer interest financial markets. However, this is not the case with former New York Fed President William Dudley. His comments on the urgent need for a federal funds rate cut frightened investors enough to halt the decline in EUR/USD. The once-authoritative FOMC member spoke about what many feared. The U.S. economy is cooling too quickly; if this continues, a recession is just around the corner.

As a result, derivatives have raised the probability of a Fed rate cut in September to 100%, with a 20% chance of a total 50 basis points cut. The futures market estimates the scale of the anticipated monetary easing in 2024 at 70 basis points, equivalent to three acts of rate cuts—in September, November, and December.

Dynamics of Donald Trump and Kamala Harris's Ratings

For a long time, EUR/USD ignored changes in investor sentiment due to Trump trade tensions. However, Kamala Harris, who leads the Democrats, forces markets to adjust their views. Her approval rating has risen to levels seen after the debates between Joe Biden and Donald Trump.

The chances of the eccentric Republican returning to the White House have dwindled, prompting investors to pivot from Trump trade issues and back to Fed monetary policy. This policy is contingent on data, so markets are eagerly awaiting U.S. GDP and unemployment claims data. These factors could unsettle EUR/USD.

Dynamics of France's Business Confidence Index

Meanwhile, Europe continues to deliver bad news, preventing buyers of the major currency pair from taking the bull by the horns. The disappointing eurozone PMI data, a key indicator, has had a significant impact. French business confidence has also fallen, with the indicator dropping to its lowest levels since the pandemic, amid a volatile local political situation where considerable time has passed since the parliamentary elections, and the government has yet to be formed.

Technically, the EUR/USD daily chart may form an inside bar. This setup is played out by placing pending orders to buy euros at $1.0860 and to sell at $1.0825. In the first scenario, the bulls could rebound from the trendline and restore the uptrend. In the second scenario, the risks of the pair continuing its decline towards 1.0800 and 1.0750 would increase.

The material has been provided by InstaForex Company - www.instaforex.com.