06.08.202410:25 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on August 6, 2024

The US dollar remains under selling pressure amidst speculations on the Federal Reserve's further policy moves. The thing is that investors increased recession fears. There has been active discussion about the likelihood that the Federal Reserve might cut the funds rate by 0.50%. Besides, rumors have also emerged that the central bank might hold an emergency meeting. This is all driven by mounting fears of the US economy sliding into a recession. Moreover, the recession is likely to be a profound and prolonged. Unsurprisingly, amid such fundamentals, the US dollar has been losing ground. After reaching nearly the lowest level since the beginning of the year, the US dollar has slightly rebounded. However, this should be seen as a mere local rebound. The greenback is weighed down by viewpoints that are expressed now and then that interest rates might be cut by as much as 0.75%. Thus, the US dollar could still drop to its lowest level of the year.

Analysis of EUR/USD

Amid speculative dynamics, the EUR/USD pair managed not only to complete the previously formed correction move but also to reach the psychological level of 1.1000. As a result, the scale of price changes in just two trading days is about 220 points, which is considered high volatility. Currently, the instrument is having a pullback from the 1.1000 level, where traders dialed down long positions on the euro. According to technical analysis, the current pullback may serve as a regrouping phase of trading forces, which could set the stage for subsequent growth.

Analysis of GBP/USD

GBP/USD is trading with more moderate dynamics. However, the instrument still managed to locally rise to the level of 1.2800. Unlike the EUR/USD pair, the pound sterling has been following a downtrend. For the first signs of a change in trading interests to appear, the price needs to settle above 1.2800.