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22.07.202109:15 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on July 22, 2021

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It is clear that the most important event of the week is today's meeting of the Board of the European Central Bank, on which there are too many hopes. These expectations are the reason for the growth of not only the euro but also the pound, which began almost immediately after the opening of the US trading session. However, everyone is waiting for one big disappointment. The Fed's latest decision to raise interest rates from the middle of next year launched the growth of the US dollar, which can only be countered by similar statements of the European Central Bank. However, the situation with the European regulator is somewhat different.

The fact is that European inflation has recently declined, and although there are all signs that this is only a temporary slowdown and consumer prices will soon begin to rise again, the ECB still has room for maneuver, which the regulator really needs, since, unlike the United States, Europe is still in a state of recession, and in such a situation, even hints of an increase in interest rates can lead to undesirable consequences.

In fact, the European economy is simply not ready to tighten monetary policy, and a decrease in inflation will only be an excuse to leave everything as it is and leave plans for the future unchanged. That is, the situation will remain the same, and the dollar will be able to continue to calmly strengthen its positions.

Refinancing rate (Europe):

Exchange Rates 22.07.2021 analysis

It is also worth noting that at the very moment when Christine Lagarde's press conference begins, America's data on applications for unemployment benefits will be published. And it is quite obvious that due to this, no one will pay attention to them. However, the data may be quite revealing. In particular, the number of initial requests should be reduced by 20 thousand, and repeated by 121 thousand. That is, the US labor market continues to recover confidently. This means that the American economy is also growing steadily.

The number of re-claims for unemployment benefits (United States):

Exchange Rates 22.07.2021 analysis

The EUR/USD pair returned to the area of the level of 1.1800 during a slight pullback, where there was a price stagnation. It can be assumed that there will be a temporary price fluctuation with an amplitude of 25-30 points relative to the control level, after which we can expect an acceleration, which probably coincides with the main event of the current day.

Exchange Rates 22.07.2021 analysis

The GBP/USD currency pair managed to partially recover the previously lost positions during the corrective movement from the pivot point 1.3570. The price area of 1.3750/1.3780 may become a possible resistance area on the way to correction.

Exchange Rates 22.07.2021 analysis

Eseguito da Mark Bom
Esperto analista di InstaForex
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