09.07.202109:58 Forex Analysis & Reviews: EUR/USD analysis and forecast for July 9, 2021

The main event of yesterday was the speech of the President of the European Central Bank (ECB) Christine Lagarde, as well as the ECB's monetary policy report. As expected, the European Central Bank has officially unveiled its new strategic approach to monetary policy. However, it can be called new since there have been no significant changes in the definition of monetary policy. As usual, the regulator's main attention was focused on maintaining price stability within the framework of the existing ECB mandate. However, it is still worth paying attention to other points. The first of them concerns the symmetrical inflation target, which is 2%. However, the wording "or slightly lower" has not been followed, and this is one of the most important nuances in the new strategy. As you know, inflation is the Achilles' heel of many of the world's leading central banks, and the ECB is no exception here.

At the same time, the thesis of "symmetrical inflation" allows for an increase in the inflation rate slightly above this notorious 2 %, if such a need arises. The ECB also left the past shortcomings concerning inflation as a historical fact, without making any promises to level them. Another important point was the official promise of the ECB to take climate change into account in its monetary policy. It should be emphasized that this was a review of the strategy launched in January 2020 (that is, 1.5 years have passed before the ECB deigned to report on the work done and the results that it did not advertise - it would have been something). Moreover, the fight against COVID-19 is by no means over, and in several European countries, there is serious talk about the invasion of the fourth wave of COVID-19, which may be caused by a new delta strain of coronavirus infection. The forecasts of the World Health Organization (WHO) are far from optimistic, whose experts believe that COVID-19 is serious.

If we very briefly touch on yesterday's speech by ECB President Christine Lagarde, then her main idea was that inflation of 2% is not the limit. In general, compared to her predecessors, Christine Lagarde is a very reserved lady and not very talkative. Accordingly, taking into account these factors, her speeches do not always have an impact on the dynamics of the single European currency.

Daily

Yesterday's assumptions that everything is still far from clear with the breakdown of the most important mark of 1.1800 and the pair can return above the 18th figure were fully justified. I am not sure that Lagarde's speech and the ECB report had the main impact on the strengthening of the euro. Most likely, technical factors had a decisive influence on the pair's growth. Now the support zone is 1.1800-1.1782. The nearest resistance, as can be seen on the chart, is provided by the red Tenkan line of the Ichimoku indicator, which today passes at 1.1856 and as a barrier closes the road to the pair in the north direction.

H1

If you look at the hourly chart of the euro/dollar, we see that the pair is trading in a descending channel with the parameters 1.1974-1.1895 (resistance line) and 1.1808 (support line). It is worth noting that this constructed channel turned out to be the right channel, because, after yesterday's growth to its resistance line, the pair demonstrated excellent technique and, having reached the upper limit of the channel, it turned down. It should be emphasized that the resistance is also strengthened by the orange 200 exponentials, which pass at 1.1858 and are located directly below the channel's resistance line. Given the hourly chart, I suggest using the following strategy. If the quote re-grows and attempts to break through the channel resistance line, we try selling. If the pair still comes out of the channel up, we are waiting for the consolidation of three consecutive hourly candles above the broken upper limit and buy it on a rollback to it. Let's take a closer look at the main currency pair of the Forex market on Monday, taking into account the closing of the current weekly trading.