EUR/USD – 1H.
Hello, traders! On August 10, the EUR/USD pair continued the process of falling and eventually closed under the upward trend line, which for a long time defined the mood of traders as "bullish". However, at this time, the hourly chart indicates a "bearish" mood. There were few special reasons for the growth of the US currency on Monday. To begin with, there were no economic reports on this day. Also, no important reports are planned for today. But from America, as always, batches of various kinds of news continued to arrive, which should have caused new sales of the US dollar. First, the situation with coronavirus in America is not improving. After a week of relatively low incidence rates, they started to grow again. Secondly, Donald Trump bypassed the US Congress, ignored all the demands of the Democrats and adopted a number of decrees that determine financial assistance to Americans affected by the crisis and the pandemic. Now we should expect new parliamentary proceedings, mutual accusations and other things. But not civilized negotiations, which would be more logical in difficult times for the country. Even courts against Trump are possible, since he exceeded his authority. It is also possible that its decrees will not have legal force.
EUR/USD – 4H.
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On the 4-hour chart, the quotes of the EUR/USD pair fell to the corrective level of 127.2% (1.1729). The pair's rebound from this Fibo level will work in favor of the European currency and resume the growth process in the direction of the corrective level of 161.8% (1.2027). The previous bullish divergence has been reversed. Fixing quotes below the Fibo level of 127.2% will work in favor of continuing the fall in the direction of the next corrective level of 100.0% (1.1496). The upward trend line on the 4-hour chart continues to define the current mood of traders as "bullish".
EUR/USD – Daily.
On the daily chart, the EUR/USD pair closed under the corrective level of 261.8% (1.1825). Thus, the process of falling can be continued in the direction of the corrective level of 200.0% (1.1566). The two lower charts also cast doubt on further growth, but there are certain obstacles to continuing the decline.
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-term.
Overview of fundamentals:
On August 10, there were no economic reports in the European Union and America, so the information background had no effect on the pair's movement.
News calendar for the United States and the European Union:
Germany - index of business sentiment from the ZEW Institute (09:00 GMT).
Germany - current situation index from the ZEW Institute (09:00 GMT).
EU - index of business sentiment from the ZEW Institute (09:00 GMT).
On August 11, the calendar of America is empty. In Germany and the European Union, not the most important reports from the ZEW Institute will be released, which are unlikely to attract the attention of traders.
COT (Commitments of Traders) report:
The latest COT report was very predictable. Given the fact that the euro currency continues to grow in general, as evidenced, for example, by the trend line on the hourly chart, and so far the dollar is only capable of small corrections, it is obvious that large traders continued to increase long-contracts. During the reporting week, their number increased by a little over 19 thousand. At the same time, the "Non-commercial" group also got rid of short contracts, thus showing that their mood is becoming even more "bullish". Thus, the advantage of the euro over the dollar remains large, and the advantage of longs over shorts in the hands of speculators remains great. Based on this, it follows that the COT report does not yet give any signals about the possible completion of the growth of the euro currency.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend cautious purchases of the currency pair with a target of 1.2024, if a close above the level of 1.1908 is made. I recommend selling the pair with the target level of 1.1496 if the close is made below the level of 1.1729.
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.
