EUR/USD – 1H.
Hello, traders! The euro/dollar pair performed a reversal in favor of the European currency on July 9 and resumed the growth process, according to the general mood of traders, which is now interpreted as "bullish". Thus, over the past day, the US currency again came under pressure, despite the fact that there was again little new and important information on this day. But in America, anti-records on the incidence of coronavirus are updated daily. And it seems that this is the factor that most worries traders. Yesterday, the pound and euro grew synchronously, respectively, the dollar fell. Over the past 24 hours, 61 thousand people in America have become infected. This is the result of the policy of Donald Trump and his administration, who tried to open the borders as quickly as possible and restore the American economy. People, as usual, forgot to think about them, so the total number of cases in the country already exceeds 3 million. While in many countries, especially in Europe, the epidemic was stopped and quarantines were lifted quite reasonably, in America – some states are again closed for quarantine, which will hit the economy. Donald Trump is overplaying himself in his haste.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair performed a reversal in favor of the European currency and resumed the growth process with a close above the Fibo level of 76.4% (1.1294) and above the level of 1.1347, which for a long time restrained the bulls' ambitions. However, now the growth process can be continued in the direction of the next corrective level of 100.0% (1.1496). And this is a very real picture. The peak of the previous bearish divergence has passed, which means that this sales signal has been canceled. The pair has no obstacles on the way up. It is also worth remembering that the rising trend line remains in action all this time.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair made a consolidation above the corrective level of 127.2% (1.1261), which allows traders to expect continued growth in the direction of the level of 161.8% (1.1405).
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair rebounded from the lower line of the "narrowing triangle", which still allows traders to expect growth in the direction of the 1.1600 level (the upper line of the "triangle"). Several charts now indicate a possible growth in the direction of 1.15-1.16.
Overview of fundamentals:
On July 8, no economic reports were published in either the US or the EU. However, the news from America regarding the number of new cases of coronavirus was enough for traders to actively sell the US currency.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On July 9, traders will again have to settle for a weak background of information. However, now there is news that interests traders much more than the usual reports.
COT (Commitments of Traders) report:
The latest COT report was released several days late due to Independence Day in the US. However, its figures were very interesting. For example, a group of speculators during the reporting week strenuously got rid of long-contracts for the euro currency and increased short-contracts. This means that large traders do not believe in further growth of the European currency. At the same time, hedgers were actively getting rid of short contracts, but this information is less important, since it is the "Non-commercial" group that is considered the most important. Thus, I can conclude that the major players are not looking towards new purchases yet, and the rebound from the level of 1.1347 indirectly confirms that traders do not want to continue buying euros. At the same time, the epidemiological situation in America forces traders to get rid of the US currency in a period not covered by the latest COT report. Thus, it is possible that major players are again building up long.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend buying the euro currency with the goal of 1.1496, since the closing was made above the level of 1.1347. I do not recommend rushing to sell the pair yet. To do this, wait for the quotes to close below the 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.
