EUR/USD – 1H.
On October 1, the EUR/USD pair performed a new fall to the corrective level of 127.2% (1.1695). However, near this corrective level, a reversal was made in favor of the European currency and a new growth process was started in the direction of the corrective level of 100.0% (1.1762). The main news of today can already be considered the infection of Donald Trump and his wife Melania Trump with coronavirus. In principle, this could be expected, since many high-ranking officials have contracted this virus. The COVID-2019 virus does not act selectively, and politicians traditionally often appear in crowded places. In the case of Trump, from the White House to campaign rallies and speeches. Thus, the person who initially opposed wearing a mask has now become infected himself. However, the US President said that he feels great and goes to self-isolation. On this news, with the opening of European markets, the US dollar fell slightly. Also yesterday, it became known that representatives of the Democratic and Republican parties of the United States decided to continue negotiations on a new package of assistance to the most affected segments of the economy and population. Many experts believe that the package will not be able to be agreed before the elections, since the entire top political light in the United States is already focused exclusively on the elections, and the Democrats and Republicans are not moving towards each other in the negotiations. Thus, the dollar may continue to be under pressure from traders.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed a consolidation above the corrective level of 127.2% (1.1729), however, this consolidation is so vague that it cannot be considered as such. The bearish divergence of the MACD indicator worked in favor of the US currency, but below the lower border of the side corridor, which again failed to gain a foothold in the quotes. Thus, the euro currency has a chance to continue growing. On the hourly chart, bear traders twice failed to consolidate below the level of 1.1695.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a sharp reversal in favor of the EU currency and began the process of returning to the weak level of 261.8% (1.1825). However, a drop in prices still looks more likely.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has completed a consolidation above the "narrowing triangle", which now allows us to count on further growth of the Eeuro currency, which may be strong, but in the long term.
Overview of fundamentals:
On October 1, all the business activity indices that were released in the European Union and America can not be called impressive. They haven't changed much. The unemployment rate in Europe rose to 8.1%, while unemployment in America, according to data on applications for benefits, continues to decline and today the official report may show a decrease to 8.2%.
The news calendar for the United States and the European Union:
EU - consumer price index (09:00 GMT).
US - unemployment rate (12:30 GMT).
US - change in the number of people employed in the non-agricultural sector (12:30 GMT).
US - change in the average hourly wage (12:30 GMT).
On October 2, the European Union will release a report on inflation, which may again disappoint traders. In America, reports on wages, Nonfarm, and the unemployment rate will be released.
COT (Commitments of Traders) report:
The latest COT report was again very interesting. A week earlier, it turned out that the "Non-Commercial" group was actively getting rid of long-term contracts for the euro currency. This week, the COT report showed that speculators were again actively increasing long-contracts for the euro. There were 15,499 of them open. This group of traders also opened short contracts in the amount of 5,890. A week earlier, I concluded that the mood of traders is changing in the direction of "bearish", however, the new COT report showed that it is again becoming "bullish". This means that the pair's fall may end in the near future. Moreover, there are five times more long contracts than short contracts in the hands of speculators. This means that professional traders are counting on the new growth of the European currency.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1608, if the close is made under the level of 127.2% (1.1695) on the 4-hour chart. I recommend buying the pair today if it closes above the level of 100.0% (1.1762) with the target level of 76.4% (1.1821).
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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
