EUR/USD

On August 3, the euro/dollar pair lost around 20 basis points. Judging by a pullback from the reached highs, it is highly possible that the pair finished the formation of waves 4, 5, C, B. If it is true, the quote may continue rising within waves 4, 5, C, B. Thus, the pair will return to the highest level of wave 3 or even goes above it. As soon as the wave is finished, a new downward movement is possible.

Fundamental data:

During recent days, the US dollar managed to recoup some of its losses. However, we should take into account the current wave position that points to at least one more jump. It means that demand for the US dollar may decline again. Traders are still focused on the epidemiological situation in the US. In recent weeks, US registered 60-70 thousand of new virus cases daily, and only rarely the numbers go beyond this range. However, US President Donald Trump, who is often criticized for the failure in the fight against the pandemic, saw an improvement in the situation. Yesterday, the US President said that there has been a significant improvement since last week. He said that there are signs of a real progress. He also noted that the number of confirmed cases across the country dropped by 6%. That is why he supposes that the virus is leaving the US. Unfortunately, Donald Trump may say such things in order to calm down people ahead of the upcoming elections. Besides, he is trying to make the US citizens focus on something else except economic and political problems. However, these problems are too big to ignore them. Moreover, according to the Johns Hopkins Institute, the virus in the US is not receding. It is possible that there is some decline or lack of growth of diseases, but it is extremely early to say that the virus is retreating. Thus, I believe that the situation in the US has not changed for the better. It means that demand for the greenback may begin to fall again. The main question is: how will the markets behave when the current upward section of the trend is fully completed?

Conclusions and recommendations:

The euro/dollar pair presumably continues to form an upward waves C and B. Thus, I recommend to go on buying the trading instrument with targets located near the level of 1.2084, which is equal to 323.6% Fibonacci, for each new MACD signal "up". The fact is that waves C and B do not yet look fully completed, but they will be completed soon.

GBP/USD

On August 3, the pound/dollar pair lost several basic points. Thus, waves 4 and 5 are still under formation. If it is true, the quote will drop for some time. After this, it may reverse. Thus, the upward trend that began on March 20 will finish. The pair may start formation of downward waves.

Fundamental data:

As far as the pound sterling is concerned, markets continue to wait for important information from the UK. The next important event is the meeting of the Bank of England that is scheduled for Thursday. The wave positions of the pound sterling and the euro are now very similar. Both currencies are expected to build corrective fourth waves, after which it is expected to resume the upward movement. No news or reports are expected from the UK, the US, or the eurozone during the day. Thus, markets may continue construction of the correctional wave.

Conclusions and recommendations:

The pound/dollar pair is still building an upward wave 5. Therefore, I recommend that you continue buying the instrument at this time for each MACD up signal with the targets located around the 1.3183 level, which is equal to the 127.2% Fibonacci.