As noted earlier, the last trading week was far from the best for the US dollar, which suffered losses on a wide range of the foreign exchange market. In pairs with the "American," the Australian and New Zealand dollars could not show growth. In contrast, the other competitors showed a fairly serious strengthening against the dollar, including the single European currency. We will consider the technical picture of the main currency pair in detail a little later. For now, we will once again talk about the main causes of the troubles that befell the USD at the auction of the last July week.

First of all, market participants were disappointed by the "dovish" rhetoric of the Fed, which they heard following the results of the July meeting of the Open Market Committee (FOMC). Let me remind you that after the previous June meeting, some investors had the impression and expectations increased that the Federal Reserve is ready to move to tighten monetary policy, which it will signal at its next extended meeting in July. However, these hopes were not destined to come true. The Fed remained in its previous positions, noting the generally good pace of economic recovery, the temporary factor of a jump in inflation above the target level of 2%, and expectations of more significant positive moments in the US ore market. The Fed's monetary policy will enter the tightening phase only after a stable series of strong macroeconomic indicators and a positive situation around the COVID-19 pandemic.

Since this review examines the EUR/USD currency pair, I will write a little about the Fed's colleagues from the European Central Bank (ECB). I will immediately note that, in addition to the fact that "dovish" have settled in the ECB leadership, the eurozone is significantly inferior to the United States in terms of economic recovery from the consequences of COVID-19. In addition, the delta strain of the insidious infection may again lead to restrictions being imposed in several European countries, which will negatively affect the economic recovery of the region. Now, it's time for us to move on to considering the EUR/USD price charts. Since Friday was the last trading day of July, let's start with the results of the month that ended.

Monthly

On the most senior timeframe, it is very visible that after the pair fell to 1.1752, the euro bulls saved the situation. It leveled all the losses incurred and managed to complete the July trading with a slight increase. At the same time, the breakdown of the support of 1.1845, where the lows of the previous month were shown, turned out to be false, as well as the breakdown of the orange 200-exponential moving average. I consider the closing of July above the strong and important technical level of 1.1860 to be another bullish moment. All these factors, plus the shape of the July candle itself, allow us to count that the EUR/USD pair is likely to show a strengthening in August that will be much more significant than the July growth. Those are all the main things that can be noted after the closing of July.

Weekly

But on the weekly timeframe, the EUR/USD pair showed much more solid growth. I want to remind you that the price zone of 1.1750-1.1700 is historically considered a fairly strong barrier and acts as very strong support or resistance, depending on the situation. At the current moment, this area has turned out to be a stumbling block for players on the downgrade, who could not overcome it and gave the reins to their competitors. However, despite the passage and closing of the week above 1.1860, the euro bulls failed to overcome the strong resistance of sellers at 1.1880. Nevertheless, the euro bulls have already tested another important and very strong level of 1.1900 for strength. But the beginning is a terrible misfortune. In the current situation, it is also necessary to consider that the euro/dollar pair is trading within the weekly cloud of the Ichimoku indicator. Closer to the upper border is the simple moving average highlighted on chart 50 and the Kijun and Tenkan lines, which converged at the level of 1.1985.

Since this is near the key psychological level of 1.2000, and there is also an upper boundary of the cloud above in the area of 1.2050, a true exit up from the weekly Ichimoku cloud will give a clear answer about the pair's further ability to move northward. The bears have the same task for the instrument. They need to lower the quote below 1.1752 and the level of 1.1700. In general, both opposing sides have food for thought, and there is something to work on. Since the week has just begun and attention was paid to the two most senior timeframes, we will talk about specific trading options in tomorrow's article on EUR/USD, considering smaller time intervals. I want to note once again that the euro/dollar pair has a more pronounced bullish scenario.