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19.07.202409:00 Forex Analysis & Reviews: Hot forecast for EUR/USD on July 19, 2024

The European Central Bank was widely expected to keep interest rates unchanged. What came as a surprise were the Bank's extremely pessimistic assessments of the eurozone economy. This suggests not just further easing of monetary policy, but possibly a more aggressive rate cut. Moreover, ECB President Christine Lagarde said that the next interest-rate meeting is "wide open", hinting that another cut is possible. So, it should not be surprising that the euro actively fell on these remarks. Nevertheless, it is likely to be temporary. The market has long been anticipating the ECB's rate cuts. The main focus now is the upcoming rate cut by the Federal Reserve. Therefore, once the media starts discussing this topic more actively, the euro will likely rise again. It is quite possible that within just a couple of days, the market will return to the levels seen at the start of yesterday's trading.

Exchange Rates 19.07.2024 analysis

The volume of long positions on the EUR/USD pair decreased within the lower range of the psychological level of 1.0950/1.1000. As a result, a pullback occurred, causing the price to drop below the 1.0900 mark.

The RSI dropped below the average level of 50 in the 4-hour time frame during the price pullback, indicating an increase in the volume of short positions on the euro.

Regarding the Alligator indicator in the same time frame, two out of three moving average lines are intertwined, indicating a slowdown in the upward cycle. However, these are initial signs of a slowdown, which do not change the overall trend.

Outlook

If the price settles below 1.0900 by the end of the week, the pair may enter a corrective phase. Otherwise, the euro's local weakness may benefit the bulls, leading to a new phase of growth.

Complex indicator analysis points to a corrective move in the short-term and intraday time frames.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

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