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Fundamentals

During the Asian session on Thursday (July 20), EURUSD is oscillating to the upside and is currently trading around 1.1200. As the dollar surged sharply yesterday, EURUSD fell as low as 1.117. After the release of unsatisfactory US real estate start data, the dollar retraced slightly, allowing EURUSD to repair the decline in a narrow range and finally closed around 1.1200. Since there is not much impetus for bulls and bears in the market today, investors need to wait for the number of initial bids tonight. Currently, the market is gradually pricing in the Fed's decision to raise interest rates next week as the last hike of the year, which may be good news for the Euro. However, it is necessary to be wary of the price impact caused by the difference in expectations if the market is too optimistic.

Traders today need to focus on the number of Initial Jobless Claims in the US for the week ended July 15, the number of Continuing Jobless Claims in the US for the week ended July 8, the US annualized total of Existing Home Sales in June, and the preliminary Consumer Confidence Index of the Eurozone in July.

Overall: EURUSD rose sharply in early July, driven by a broad weakening of the US dollar following inflation data from the US, which was weaker than expected. Against this backdrop, EURUSD surged to its highest level in months and expressed strong upward momentum in its upward journey. However, in the absence of new catalysts, the upward initiative of EURUSD has been fading over the past few trading days, which may have entered a short-term consolidation period.

Technical Analysis

Trading at the daily timeframe, as all moving averages are running upward and the golden cross of MACD still keeps widening, the bulls are dominant in the trend now. However, we also notice that the MACD indicator has penetrated deep into the overbought zone and the price has appeared the Doji Star for 3 days in a week with a long black body, which has shown signs of a rounded top, and the probability of a weakening price has risen sharply. For the moment, there are two positions worth looking at, one is the resistance level at the 1.1280 line (i.e. the 61.8% Fibonacci retracement level of the 2021-2022 decline) and the other is the support level at the 1.1170 line (i.e. the lower edge of the wave area this week). If the price breaks above 1.1280, the bulls are expected to test the 1.1380 high (i.e. the shoulder position at the beginning of the year). Conversely, A successful break below 1.1170 will require attention below the 1.10 line.

Aggressive traders can try to go short with small positions around 1.1250. The stop loss is at 1.1400, and the first target is at 1.1100, where you are able to take profit partially and move the stop loss to break even. The second target is at 1.0850.

Trading Recommendations

Trading Direction: Short

Entry Price: 1.1250

Target Price: 1.1100

Stop Loss: 1.1280

Support: 1.1100/1.0850

Resistance: 1.1280/1.1380