EUR/USD – 1H.
Hello, traders! On August 11, the EUR/USD pair performed a reversal in favor of the US currency and resumed the process of falling quotes. A new downward trend line has been built, which now indicates the "bearish" mood of traders more clearly. Before the pair's quotes close above this line, a fall is more likely. Meanwhile, the whole world is excited by the news of the first officially registered vaccine against coronavirus. It is not known what tests the Russian vaccine has passed and when it will be used. However, EU and US countries have already issued statements that they strongly doubt the safety of this vaccine. The chief expert on infectious diseases in the United States, Anthony Fauci, who has never made unfounded statements before, believes that Russia has not conducted all the necessary tests of this vaccine. It is noted that the Russian Federation has not conducted the third phase of tests, which usually lasts several months and involves large-scale safety tests among various layers and groups of people. In this situation, it only remains to follow the news from Russia to understand whether the new vaccine is so good and safe and whether it will be used anywhere outside the Russian Federation.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed a new rebound from the Fibo level of 127.2% (1.1729), a small increase and a return to this level. Closing quotes below the level of 1.1729 will allow traders to count on the continuation of the fall process in the direction of the next corrective level of 100.0% (1.1496). Also, do not forget about the continuing upward trend line, which on the current chart still indicates a "bullish" mood of traders. Closing below it will also increase the likelihood of further falls.
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% (1.15660. Two lower charts also cast doubt on further growth.
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 11, the European Union released only a few economic reports from ZEW, reflecting the mood of investors to the current economic situation and prospects for the German and European economies.
News calendar for the United States and the European Union:
EU - change in industrial production (09:00 GMT).
US - consumer price index (12:30 GMT).
On August 12, the American calendar contains an important report on inflation, and the EU calendar contains an important report on industrial production. These reports may affect the pair today. For the dollar to continue to grow, news from America must be strong, and from Europe - weak.
COT (Commitments of Traders) report:
The latest COT report was very predictable. Given the fact that in general, the euro currency continues to grow recently 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. This week, the euro currency has slightly worsened its position, however, only Friday's report will show whether the mood of the major players has changed.
Forecast for EUR/USD and recommendations for 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 goal of a trend line 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.
