Analysis of EUR / USD Divergences on July 20. Bull divergence helped the euro
The EUR / USD pair on the 4-hour chart reversed in favor of the European currency after the rebound from the correction level of 23.6% to 1.1590 and the fixation over the Fibo level of 38.2% to 1.1639. As a result, the growth process on July 20 can be continued in the direction of the next correction level of 50.0% – 1.1680. The consolidation of the pair’s rate under the Fibo level of 38.2% will work in favor of the US dollar and the resumption of the fall towards the corrective level of 23.6% – 1.1590. Quit of quotes from the Fibo level of 50.0% likewise will allow some expectation to fall.
The Fibo grid is built on the extremes of June 14, 2018 and June 21, 2018.
On the 24-hour chart, the drop in quotations continues in the direction of the corrective level of 100.0% – 1.1553. The bullish divergence of the CCI indicator is maturing: the last low of quotations may turn out to be higher than the previous one and does not correspond to the low of the indicator. The bullish divergence will allow us to count on a reversal in favor of the EU currency and some growth towards the Fibo level of 76.4% – 1.1789. Quit of quotations from the correction level of 100.0% will similarly work in favor of the euro. Fixing the pair under the Fibo level of 100.0% will increase the probability of further falling in the direction of the next correction level of 127.2% – 1.1285.
The Fibo grid is built on extremes from November 7, 2017 and February 16, 2018.
Recommendations for traders:
Buy EUR / USD on July 20 with a target of 1,1680 with a Stop Loss level under the correction level of 38.2%, as there was a close above the level of 1.1639.
To sell the EUR / USD pair will be possible with the target of 1,1590, if the closing is carried out under the correction level of 38.2%, with a Stop Loss order above the Fibo level of 1.1639.