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23.07.202004:41 Forex Analysis & Reviews: Hot forecast and trading signals for the EUR/USD pair on July 23. COT report. Four types of crises finish the US dollar. Traders increasingly turn their backs on buying the dollar

EUR/USD 1H

Exchange Rates 23.07.2020 analysis

The EUR/USD pair continued a rather strong upward movement on the hourly timeframe on July 22. Now it is already well above the ascending channel, in which the pair has been strictly moving in the middle for a long time. However, the bulls have recently felt the surge of strength and the weakness of the bears, which, in principle, are simply absent from the market at this time. From time to time, the pair is corrected, but no more. Thus, the upward movement may continue with the final target for the week - 1.1631. As for the possible prospects of sellers, they need to wait, at least, to consolidate below the critical line. But even in this case, the price will remain within the upward channel, which means that it will be difficult for the bears to count on forming a downward trend.

EUR/USD 15M

Exchange Rates 23.07.2020 analysis

Both linear regression channels are directed upward on the 15 minute timeframe, signaling an upward trend in the short term and no signs of an emerging trend change. The latest Commitments of traders (COT) report clearly showed that the bullish sentiment of the market remains. Professional market players continue to actively buy the European currency. That is, we can conclude that the aggregate demand for the euro is growing, while the demand for the US dollar is decreasing. Since it is obvious that the trend is precisely formed by large traders, especially those who enter the market with the aim of making a profit (non-commercial category), their mood is an extremely important factor for ordinary traders. So, given that the euro has continued to rise this week, the next COT report, due out on Friday, will seek to answer the question of whether the bullish pressure on the pair has increased further? If so, then we can expect the upward movement to continue in the medium term.

The fundamental backdrop for the EUR/USD pair was controversial on Wednesday. As we have said many times, now there are a huge number of different factors that can hypothetically influence the movement of the pair and the mood of traders. These are four types of crises (epidemiological, social, economic, political), and the constant wars of US President Donald Trump with the Democrats, and China. This is also positive news from the EU, since the EU summit ended with the approval of the budget for the next seven years and the approval of the recovery fund. Although we believe that the news from Europe did not have a special impact on the euro/dollar pair. However, in general, we have a persistent negative background from the US, and generally neutral from Europe. In such conditions, it is not surprising that the euro is growing. The US government is doing nothing at this time to resolve at least one of the crises the country is in. Moreover, Trump says that the coronavirus situation could get worse, albeit much worse? Following these words, the number of investors willing to buy the dollar diminished even more. In general, now the US dollar can count on a purely technical correction against the euro. And a new long-term upward trend for the euro.

Based on the above, we have two trading ideas for July 23:

1) Buyers definitely continue to dominate the market, and the upward movement has intensified. Buy orders remain relevant with the target at the resistance level of 1.1631. Thus, either you should stay with purchases and a Stop Loss below Kijun-sen or at the discretion of traders, open new longs with the last goal at the signal of some fast indicator, such as Heiken Ashi. The potential Take Profit in this case is up to 60 points.

2) The bears are just resting and waiting for buyers to give them a chance to seize the initiative in the market. Sellers are still not strong enough to form a new downward trend. Thus, all that remains is to wait for the price to consolidate at least below the Kijun-sen line. In this case, you can try to sell the pair with the aim of the lower line of the ascending channel. More serious prospects will open below the rising channel. In this case, the potential Take Profit is up to 60 points.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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