31.07.201915:16 Forex Analysis & Reviews: Overview of EUR/USD on July 31st. The forecast for the "Regression Channels". The reduction in the Fed rate is not a panacea for the euro

4-hour timeframe

Technical data:

The upper channel of linear regression: direction – up.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – down.

CCI: 55.4765

The European currency has adjusted in the last two days to the moving average line and failed to overcome it. Since the Fed's possible decision to reduce the rate by 0.25% has already been made, traders have already taken it into account in the current euro/dollar rate. So, there is no need to wait for a special reaction to the market. Another thing – the performance of Jerome Powell. His rhetoric can be anything from our point of view. It can signal the whole course of monetary policy easing, which will involve several key rate cuts. He may note that macroeconomic indicators have improved in recent weeks. So far, we see no reason to reduce the rate by more than 0.5%. Accordingly, we believe that there will be a maximum of one more easing in 2019. And then everything will depend on the outcome of the trade confrontation between the States and China. Who will be the next President of the United States (2020)? From what will be macroeconomic statistics and, in particular, inflation and GDP. If all these factors are favorable to the dollar, the regulator will not have to go for new monetary policy easing. So the key question today is Jerome Powell's rhetoric. Meanwhile, the preliminary inflation value for July was published in the European Union, and this figure fell to 1.1%, and the basic value of the consumer price index fell to 0.9%. GDP for the second quarter, according to preliminary estimates in the quarter, fell to +0.2%, and in the annual – to 1.1%. And what is the significance of the Fed's rate cut for the euro with such macroeconomic statistics of the European Union?

Nearest support levels:

S1 – 1.1108

S2 – 1.1047

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1169

R2 – 1.1230

R3 – 1.1292

Trading recommendations:

The EUR/USD currency pair has completed a round of upward correction around the MA. On July 31, therefore, it is recommended to sell the EUR/USD with targets at 1.1108 and 1.1047.

It is recommended to buy the euro/dollar in small lots if the bulls manage to gain a foothold above the moving average line, with the first target Murray level of "4/8" - 1.1230.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – the blue line in the indicator window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.