EUR/USD – 1H.
The EUR/USD pair performed a fall to the corrective level of 100.0% (1.1704) on Monday, rebounding from it and turning in favor of the European currency. The growth process has begun in the direction of the level of 1.1772. Closing the pair's exchange rate under the Fibo level of 100.0% will favor the US currency and the resumption of the fall in the direction of the level of 1.1629. There was no information background for the euro/dollar pair on Monday. During the day, we can only note the speech of ECB board member Isabel Schnabel, who said that bond purchases by the central bank are becoming less important. According to her, the economic prospects are improving, and the increase in inflation allows the ECB to be more flexible in monetary policy. Schnabel also noted that the increase in inflation might cause a reduction in the volume of bond purchases under the PEPP program. However, Schnabel did not say a word that the PEPP program could be completed ahead of schedule.
At the moment, its intended validity expires at the end of March 2022. It is expected that the ECB will reduce the volume of bond purchases until the end of the program. Although this information is quite important, traders did not pay any attention to it. The activity of traders was again very low. I think that we will not see any serious changes in the pair's exchange rate until tomorrow. But tomorrow, when traders find out what decisions the Fed has made, serious changes in the pair's exchange rate may follow. Thus, all the attention of traders is now occupied by the Fed meeting and the decisions taken. The US dollar has been strengthening against the euro over the past week. However, this process could not continue forever. Tomorrow, we may see a fall in the US currency if the Fed does not meet traders' expectations. And traders are now waiting for the Fed to announce the curtailment of the quantitative stimulus program.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed under the corrective level of 76.4% (1.1782). Thus, the process of falling quotes can be continued in the direction of the next corrective level of 100.0% (1.1606). There are no emerging divergences in any indicator today. There are no signals to buy the pair at this time.
News calendar for the United States and the European Union:
On September 21, the calendars of economic events in the United States and the European Union were empty. There is no single entry that you can pay attention to. Thus, there will be no information background today. The growth of the US dollar stopped yesterday, so traders probably decided to pause until the results of the Fed meeting and Jerome Powell's speech, which will take place tomorrow evening, are announced.
COT(Commitments of Traders) report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders practically did not change. Speculators closed 4,195 long contracts on the euro and 4,276 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 187 thousand, and the total number of short contracts - to 160 thousand. Over the past few months, the "Non-commercial" category of traders has been actively getting rid of long contracts on the euro and increasing short. However, at the same time, the euro has grown very slightly during this time. Now speculators have stopped getting rid of only long contracts for the euro. Thus, it is possible that this week, the European currency will try to start a new upward trend.
EUR/USD forecast and recommendations for traders:
Yesterday, I recommended buying the pair with a target of 1.1772 when the quotes rebound from the level of 1.1704 on the hourly chart. Now, these transactions should be kept open. I recommend selling if there is a close below the level of 1.1704 on the hourly chart, with the target of 1.1629.
Terms:
"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.
