07.07.202111:08 Forex Analysis & Reviews: EUR/USD analysis and forecast for July 7, 2021

At yesterday's trading, the main currency pair of the Forex market was under pressure. Moreover, according to the results of the session on June 6, it showed a decline. As already noted in previous EUR/USD reviews, the main event of this week is likely to be the publication of the minutes of the last meeting of the Open Market Committee (FOMC). This event is scheduled for today, and the minutes will be published at 19:00 London time. It can be assumed that yesterday's strengthening of the US currency is due to investors' expectations that the protocol will reflect signals about the beginning of tightening the monetary policy of the US Federal Reserve System (FRS). Specifically, this may concern hints about reducing the volume of buying securities. I believe that we will not learn any new hints about the beginning of the process of raising interest rates. Although it will be interesting to understand how the votes of the FOMC members were distributed on this important issue for the markets.

It is known that some Fed leaders do not rule out the first-rate hike after COVID-19 in the middle of next year. However, it seems that most of the monetary men of the Fed are considering raising the federal funds rate only by the middle of 2023. If we go back to yesterday's fundamental data, they hardly had any significant impact on the price dynamics of the euro/dollar, since they turned out to be quite mixed. So, if retail sales in the eurozone turned out to be better than economists' forecasts, the index of business sentiment from the ZEW institute for the eurozone and Germany did not meet expectations and was in the red zone. The index of business activity for the services sector from Markit, as well as the index of business activity in the services sector from the Institute for Supply Management (ISM) from the United States also came out weaker than forecasts. However, this did not allow the US dollar to finish yesterday's trading with a strengthening against the single European currency. I would like to emphasize once again that the main event of today will be the publication of the minutes of the FOMC meeting, which will be held at 19:00 (London time).

Daily

Turning to technical analysis, first of all, I would like to note that yesterday's recommendations on sales and purchases turned out to be correct. As can be seen on the daily chart, the red line of the Tenkan of the Ichimoku indicator continued to perform its resistance function and again did not let the quote go higher. Thus, the sales recommended during the attempts of the euro/dollar to pass the Tenkan line up brought profit. But purchases from the price support zone of 1.1808-1.1800 can also be attributed to credit. However, the profit on them was very symbolic (that is, very small). Judging by yesterday's rather impressive bearish candle, which was formed after futile attempts to pass the Tenkan line up, the market is going to lower trading on EUR/USD below 1.1800 (that is, to break through this level). If so, then the main trading recommendation for the euro/dollar will be sales. However, opening short positions near strong support is technically wrong. Thus, I suggest looking at losses at more favorable prices after short-term corrective pullbacks up. The price area for opening sales looks like 1.1850-1.1890. Given today's publication of the FOMC protocols, anything can happen on the market. However, it is better to refrain from buying for now. And I recommend that novice traders close all open positions (who have them) before 19:00 (London time) and calmly observe the market behavior after the publication of the Fed minutes