EUR/USD – 1H.
Hello, traders! The EUR/USD pair performed a new reversal in favor of the European currency on August 4 and resumed the growth process over the upward trend line, which remains in effect and continues to characterize the current mood of traders as "bullish". So I can't change my conclusions at the moment. The euro currency still has a higher chance of growth, and the US dollar remains at the mercy of traders, as America has an extremely difficult situation with the coronavirus. However, the coronavirus is not the only cause of America's problems. The country is facing the highest drop in GDP in its history, and the presidential election is three months away. And unfortunately, most politicians, in particular, Donald Trump are more concerned about who will win the election, rather than how to protect the country and its population from the epidemic. Political problems are the second factor that prevents the US currency from growing. Therefore, the bears need to wait for the bulls' fuse to run out or for the information background to support the dollar. I do not yet see how the US currency can continue the growth process, since the situation in America is not changing for the better, and the bears are not too willing to sell the pair.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed another fall to the corrective level of 127.2% (1.1729) and a new rebound from it. Thus, at this time, the process of price growth can be resumed in the direction of the corrective level of 161.8% (1.2027). Only the closing of the pair's exchange rate under the Fibo level of 127.2% will allow traders to expect a further fall in the direction of the level of 100.0% (1.1496). Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a false breakout of the corrective level of 261.8% (1.1825). As a result, the rebound from this level was performed, which now allows us to count on a slight drop in quotes. However, on the 4-hour chart, the pair failed to close below the 1.1729 level three times, so the process of falling is still suspended.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation over the "narrowing triangle", which now allows us to count on further growth of the euro currency, which can be very strong and long-lasting.
Overview of fundamentals:
On August 4, the calendars of economic events in the European Union and America were empty. There was no background information.
News calendar for the United States and the European Union:
EU - index of business activity in the service sector (08:00 GMT).
EU - change in retail trade volume (09:00 GMT).
US - change in employment from ADP (12:15 GMT).
US - ISM composite index for non-manufacturing sector (14:00 GMT).
On August 5, the EU and US calendars contain quite a lot of interesting reports. I recommend turning your attention to the American reports that are considered most important.
COT (Commitments of Traders) report:
The latest COT report was extremely interesting. The Non-commercial group opened as many as 36277 purchase contracts during the reporting week. This is a very high value. And it was it that formed the upward trend for the reporting period. Thus, this figure alone from the entire report was already enough to make a conclusion about the current mood of major traders in the European currency. The Commercial group also actively opened and closed contracts, however, data for this group is not important. In total, 241 thousand long-contracts and only 79 thousand short-contracts are now placed in the hands of speculators. Thus, the latest COT report does not yet give any reason to assume the end of the upward trend.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend cautiously buying a currency pair with a target of 1.2024, since the rebound from the level of 1.1729 was performed. I recommend selling the pair with the target level of 1.1496 if the closing is made under the level of 1.1729, as well as under the ascending trend line on the hourly chart.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
