20.07.202009:05 Forex Analysis & Reviews: Hot forecast and trading recommendations for EURUSD on July 20, 2020

Although the final data on inflation coincided with the preliminary estimate, the euro currency still grew somewhat. Inflation in Europe rose from 0.1% to 0.3%. But this is nothing new. Let's just say that market participants knew about this two weeks ago. There were, of course, reasons to believe that inflation would rise a little more. This was particularly indicated by the dynamics of inflation in Germany. But the growth in consumer prices in Europe's largest economy was not enough for inflation in the entire eurozone to grow more actively. It is noteworthy that the main activity on Friday took place about an hour before the publication of inflation data. The market practically stood still when the data was released and following that. And strangely enough, this once again indicates the speculative overheat of the euro.

Inflation (Europe):

And in fact, the data on construction in the United States did not receive any attention, although they turned out to be slightly better than forecasts. Especially if we talk about the construction of new homes, the volume of which increased by as much as 17.3% against the forecast of 12.9%. The total number of construction projects increased from 1,011,000 to 1,186,000. Although the data on issued construction permits were slightly worse than forecasts, as their number increased by 2.1%, while they were expected to grow by 2.5%. In general, the number of issued permits increased from 1,216,000 to 1,241,000. But overall, the data was slightly better than the forecasts.

New home construction (United States):

And in theory, this should have been enough for the dollar to recoup some of its losses. Moreover, there are quite a lot of reasons for this. Including the euro notoriously being overbought. The macroeconomic calendar is completely empty today, so market participants will only be guided by technical analysis factors. So now the only hope is for technique, and that it will be able to somewhat correct the imbalances that have formed in the market.

From the point of view of technical analysis, we see that for the fourth consecutive time, the price is approaching the resistance area of 1.1440/1.1450, where the quote can not overcome it, signaling overbought. The volatility with all of this fluctuation decreased below the daily average of the index that reflects the accumulation process. The general fluctuation has borders of 1.1380/1.1450, which has been going on since the middle of last week.

Looking at the trading chart in general terms (daily period), you can see that the current accumulation has been confirmed in 2019 and 2020, which affirms the status of resistance.

We can assume that if the pattern repeats with the area of 1.1440/1.1450, the quote will once again slow down the movement, forming a pullback in the direction of the values of 1.1400-1.1380.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the minute, hour and day periods signal a purchase by focusing the price in the area of 1.1440/1.1450.