EUR/USD 1H
The euro/dollar pair continued its upward movement all day on the hourly timeframe of July 27. The fact that there were no particularly important news and publications on Friday or Monday, and yet traders continued to actively buy the euro and sell the dollar, suggests that there are simply no bears on the market now, and buyers are not ready to take a pause even for a couple of days to adjust the currency pair. Bulls do not even want to consolidate the profit, which should already be quite high, given the strength and duration of the upward trend. The price managed to overcome the first resistance level of 1.1741 on the first trading day of the week and in general, nothing prevents the pair from moving up. The price is moving further away from the ascending channel, which indicates the strengthening of the upward trend.
EUR/USD 15M
Both linear regression channels are still directed upward on the 15 minute timeframe, signaling an upward trend in the short term and no signs of an emerging trend reversal. Well, the latest Commitments of traders (COT) report showed a major change in favor of buyers. Professional traders (non-commercial category in the COT report) opened 9,500 new Buy-contracts during the reporting week (July 15-21) and at the same time (!!!) closed 8,000 Sell-contracts. Obviously, the net position for this category of large traders, which is the most important and believed to drive the market, grew by 17,500 at once. The euro continued to rise in price after July 21 and is doing so to this day. Consequently, non-commercial traders have continued to ramp up their purchases of the euro. Thus, even the COT report does not give any reason to suppose the completion of the upward trend in the euro. Even 36,000 Sell-positions opened by the commercial category of traders did not have much significance, only, perhaps, they slightly slowed down the euro's growth. Although it's scary to imagine how quickly the euro would have risen in price if it had not been for these 36,000 Sell contracts.
The fundamental background for the EUR/USD pair obviously did not change on Monday, since the very nature of the pair's movement remained the same. Macroeconomic statistics from overseas did not have any impact on the course of trading. However, in any case, it was neutral at best and could not support the dollar in any way. Significant data from either the US or the EU will not be released on Tuesday, July 28. Thus, the only hope for the dollar is that unexpected positive news will come from America (for example, a vaccine against coronavirus will be invented or rallies and protests will be completely suppressed), or that buyers will simply get enough and stop buying the euro. We do not see any more chances of strengthening the dollar now. The White House, led by Donald Trump, is doing everything to make the economy sink even more, and the US president himself is doing everything to avoid being re-elected in November for a second term. Thus, the political, sociological and epidemiological chaos that reigns in the US does not contribute to the good mood of the bears of the euro/dollar pair.
Based on the above, we have two trading ideas for July 28:
1) Buyers continue to dominate the market. Buy orders remain relevant with the nearest target at the resistance level of 1.1827, to which, by the way, is around 80 points. Thus, you are advised to either stay in the pair's purchases with the designated target, or to open new longs with the target of 1.1827, since the 1.1741 level was overcome. You can also open new longs on an upward signal of some indicator, such as MACD, after a downward correction, if any. In this case, the potential Take Profit is up to 80 points.
2) The bears continue to rest and wait for the bulls to give them at least a chance to seize the initiative in the market. This requires price consolidating below the Kijun-sen line (1.1602). In this case, you are advised to sell the pair with the target at the support level of 1.1486. It is recommended to consider more serious sales after the price consolidates below the rising channel with the target at the support level of 1.1317. Potential Take Profit in this case is from 90 to 260 points.
The material has been provided by InstaForex Company - www.instaforex.com