14.07.202002:26 Forex Analysis & Reviews: Overview of the EUR/USD pair. July 14. The focus is once again the "coronavirus." Anthony Fauci is in conflict with Donald Trump. Americans support the epidemiologist.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 175.7121

For the EUR/USD pair, the first trading day of the week was held in absolutely familiar trading recently. The pair was still trading in the side channel, limited by the levels of 1.1200-1.1350, near its upper border. Quotes again approached the Murray level of "5/8"-1.1353, but at the moment it is still impossible to say that this level has been overcome, and now the pair is waiting for the formation of a new upward trend. The most interesting thing is that in recent weeks, a pronounced upward trend has formed inside the side channel. In other words, the pair does not trade from the lower border to the upper and Vice versa. It shows a long movement in one direction with very frequent and deep corrections. Thus, this time is still far from the most favorable for trading the euro/dollar.

On Monday, as is often the case, the calendar of macroeconomic events in Europe and the United States was completely empty. In principle, volatility during the day perfectly reflects the almost absent fundamental background. However, one topic does not give rest to investors and traders and does not allow the US currency to start growing again. Many believe that the US dollar is the world's number one currency. That is the currency that everyone buys when the world has another crisis. This is partly true. However, one remark must be made here. If at the same time the crisis in the United States themselves is also quite large, and in addition to the crisis there are a huge number of other problems, then the US dollar will no longer become more expensive, "because there is a coronavirus in the world". Recent weeks are a great confirmation of this, as the euro and pound are growing. The euro simply does not have any good fundamental reasons for strengthening, and the pound, according to all the canons of fundamental analysis, should move in any direction but not up. However, both currencies are growing quite confidently. And the reasons, as we have said more than once, should be sought exclusively in the United States. And one of the most likely causes is "coronavirus". As we have already said, Europe has managed to win a relative victory over the epidemic. At least the daily growth rates of diseases have fallen to their minimum values, which means that the number of people recovering is greater than those infected, therefore, the total number of patients is decreasing, and the burden on the health sector is also decreasing. In the United States, the opposite is true. The rate of disease growth is growing day by day and is beating all the anti-records. It is hardly necessary to list once again what the United States may face if the virus continues to spread, "as in a crowded minibus". It is obvious that sooner or later most of the US population will get sick. But even if we are talking about 20% of the entire population, it will mean the collapse of the medical system. Hospitals simply cannot cope with the influx of sick people who need hospitalization or ventilators. Not to mention that Americans are unlikely to run for work in the face of a national epidemic. What it can end up with, it's scary to imagine. The US government will of course pay unemployment benefits, otherwise, it will not be possible to avoid new rallies and protests, which will be far from the most peaceful. However, the national debt will continue to grow. Donald Trump is not afraid of this, but sooner or later this "bubble" will burst. And the bigger this "bubble", the stronger the "explosion".

The country's chief epidemiologist, Anthony Fauci, who spent several weeks in isolation and made no comment, said "the world is only at the very beginning of the COVID-2019 pandemic". "The virus will continue to spread if countries do not take countermeasures," Fauci said. Fauci also noted that "the situation with coronavirus in the United States is out of control". "The coronavirus will remain with us for a long time until we take effective containment measures and develop a vaccine," the epidemiologist concluded. What is remarkable is that Fauci made these terrible statements to an Italian newspaper, not to an American publication. We have already drawn attention to the fact that the country's chief virus expert has abruptly stopped commenting on the pandemic. Regarding the causes of the new COVID outbreak, Fauci said that "the country and some states were in a hurry to lift all restrictions and resume economic activity, which led to new infections."

Meanwhile, the White House, or better yet, Donald Trump personally, does not find a common language with Dr. Fauci. The country's chief epidemiologist has worked under six presidents, but (why aren't we surprised?) couldn't cooperate only with Trump. It is noted that the White House blames Fauci for many wrong statements. There is even a whole list of the scientist's sayings, which consists of excerpts from his previous interviews and comments. Sources close to Trump and Fauci claim that the President and the epidemiologist stopped communicating with each other a few weeks ago (just when Fauci abruptly disappeared from the air). At the same time, according to many publications and experts, the problem is not in the doctor's statements, but in the fact that these statements contradict the sayings of the US President. Fauci allowed himself to openly object to Trump, to disagree with his opinion. In response, Trump also began to criticize Fauci, saying that he made too many mistakes. However, as we can see, it is more likely that Trump can be accused of making too many mistakes on the issue of the pandemic. It is his underestimation that has led to more than 3 million people being infected in the United States. And from our point of view, such a confrontation with the country's chief epidemiologist will not benefit Trump. First, it's not Fauci who needs to be re-elected in November. Secondly, according to many sociologists, Americans trust Fauci's opinion more than Trump on issues of the pandemic (which is not surprising, given the number of "discouraging" statements by the leader of the nation). As a result, the United States continues to cause serious concerns, since it is not possible to stop the "coronavirus", but the "coronavirus" can calmly stop and paralyze the American economy.

Today, Germany is scheduled to publish the consumer price index for June and several reports from the ZEW Institute, reflecting the mood in the business environment. In the European Union today, the report on industrial production for May with a forecast of +14.5% m/m, and in the United States - inflation for June with a forecast of 0.6% y/y. However, in the current conditions, traders of the euro/dollar pair are unlikely to pay attention to this data. As we have already said, inflation is now completely uninteresting to traders, since its fall or too strong growth is a normal phenomenon for any crisis. Industrial production is an interesting report, but everything will depend on how much the real value and forecast differ.

The volatility of the euro/dollar currency pair as of July 14 is 79 points and is characterized as "average". We expect the pair to move between the levels of 1.1291 and 1.1449 today. A new reversal of the Heiken Ashi indicator downwards will signal a new round of downward movement within the side channel.

Nearest support levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading recommendations:

The EUR/USD pair continues to trade near the moving average line, inside a side channel with a slight upward slope. Thus, it is recommended to open long positions if traders manage to overcome the level of 1.1353, which is the approximate upper limit of the channel, with the goals of 1.1449 and 1.1475. It is recommended to open sell orders no earlier than the 1.1200 level with the goal of 1.1108.