EUR/USD – 1H.
The EUR/USD pair continued its horizontal movement on Friday without reacting to any external stimuli. Thus, I can conclude that after the quotes fell to the level of 1.1772, bear traders were unable to continue their business. The pair has been between the levels of 1.1782 and 1.1890 for two weeks, clearly visible on the 4-hour chart. There is a sideways trend corridor from which traders will have to withdraw the pair. Now, it is quite difficult to say what kind of information should be sent to the foreign exchange market to start trading more actively, and the pair leaves the side corridor. In recent weeks, there have been quite many speeches by Jerome Powell, meetings of the ECB and the Fed were held, and there were also strong and important reports. But all this data does not help the euro and the dollar too much yet.
On Friday, the information background for the pair was quite strong. In the morning, the European Union released an inflation report for June. The consumer price index in the eurozone remained at a fairly low level, below the ECB's target level of 2.0%, around which there have been quite a lot of disputes and discussions recently. Let me remind you that the ECB has changed its approach to targeting inflation, raising the target from "about 2% or slightly lower" to "2% or slightly higher". Nevertheless, the ECB's target has not yet affected inflation itself, which cannot grow above 2%. In the UK, the consumer price index, for example, rose to 2.5%, and in the US - to 5.4%. Also, in the US, a report on retail trade for June was released, the volumes of which unexpectedly turned out to be higher than expected for traders. Thus, in the second half of the day, traders could buy the US currency more actively.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new fall to the corrective level of 76.4% (1.1782). The rebound of the pair's exchange rate from this level will again work in favor of the EU currency and some growth in the direction of the correction level of 61.8% (1.1890). Closing quotes below the level of 76.4% will increase the chances of a further fall in the direction of the next corrective level of 100.0% (1.1606). There are no emerging divergences in any indicator today.
Overview of fundamentals:
On July 16, there were several quite important reports in America and the European Union, but traders did not pay any attention. Thus, the information background was quite strong, but it did not cause any reaction.
News calendar for the United States and the European Union:
On July 19, the calendars of macroeconomic events in the European Union and the United States are empty, so I do not expect strong movements today. There will be no information background.
COT (Commitments of Traders) report:
The latest COT report showed that during the last reporting week, the mood of the "Non-commercial" category of traders again became more "bearish." Major players have opened 13,952 short contracts for the euro and a total of 2,332 long contracts. Thus, in the last four weeks, the number of short contracts focused on the hands of speculators has increased by 58 thousand, and the number of long contracts has increased by 1 thousand. Therefore, a further fall in the European currency is very likely. But bear traders need to put more pressure on the level of 1.1782. However, it should be noted that the total number of long and short contracts opened by all players is already almost the same. Recently, the "Commercial" category of traders has been actively getting rid of short positions.
EUR/USD forecast and recommendations for traders:
Sales of the pair are recommended with a target of 1.1704 if a close is made on the 4-hour chart below the level of 1.1782. I recommend buying the pair when it rebounds from the level of 1.1782 on the 4-hour chart with the targets of 1.1837 and 1.1890.
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.