By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
On Monday, July 20th, the major currency pair is rising and trading at 1.1443, which is very close to the March high at 1.1496. at the moment, it’s a quite reachable target for investors, who believe only in good and expect positive decisions from the European Union after the summit.
The EU summit, which was originally scheduled for two days, Saturday and Sunday, will continue on Monday as well. The European leaders couldn’t agree on the parameters of the stability fund, which is strongly required by many countries that suffered from the coronavirus pandemic. Apart from that, there are nuances in a multi-year financial plan, which should be a basis for the budgets of some particular European countries and the EU itself for 2021-2027.
There are no doubts that the alliance needs tools and mechanisms to support its economy. The question is at whose expense the fund is going to accumulate money, who will control expenditures and choose where to spend money first.
Even with all things considered, market players are looking pretty confident that the outcome will be positive. This is the reason why the demand for the Euro isn’t decreasing.
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In the H4 chart, after breaking 1.1430 to the upside, EUR/USD is expected to continue growing towards 1.1480. After that, the instrument may correct to reach 1.1440 or extend the correction down to 1.1340. Later, the market may form one more ascending structure with the target at 1.1550. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 inside the histogram area, thus indicating a further uptrend on the price chart.
As we can see in the H1 chart, after forming a consolidation range around 1.1430 and breaking it to the upside, EUR/USD is expected to continue growing towards 1.1488 with no correction. This movement should be considered as an alternative scenario because the price may start plummeting to form such correction with the target at 1.1340 at any moment. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving above 80. If the line breaks 80 and starts plunging towards 20, it will confirm a sharp decline on the price chart.
Any predictions contained herein are based on the author's particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.