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28.07.202113:42 Forex Analysis & Reviews: Forecast for EUR/USD on July 28 (COT report). Traders are focused on Powell's speech

EUR/USD – 1H.

Exchange Rates 28.07.2021 analysis

The EUR/USD pair again showed nothing remarkable on Tuesday. The rebound of quotes from the level of 1.1772 worked in favor of the EU currency and a slight increase to the corrective level of 76.4% (1.1837). The rebound from this level has already worked in favor of the US currency and began to fall towards the level of 1.1772. Thus, at this time, the pair is moving again to the level of 1.1772, near which it has spent most of the last two weeks. The nature of the pair's movement has not changed at all in recent days. However, everything should be decided tonight. At least now, I want to believe it since the movement in the side corridor of 1.1772-1.1837 is already tiring. It does not allow you to trade a pair. In the evening, the FOMC will announce the results of the meeting. However, this does not attract the attention of traders. No one expects any changes from the Fed. Thus, the most important event will be a press conference with Jerome Powell.

And the Fed president will have something to tell the markets. Recently, there has been a desperate debate among traders about when the Fed will announce the end of the program of assistance to the economy and when it will begin. The fact is that inflation in the United States has grown to 5.4% in recent months, and Powell's statements about the "temporary nature" of this phenomenon no longer reassure traders. By and large, the further dynamics of the dollar will largely depend on what Powell says today. He may announce that the Fed is starting to discuss curtailing the QE program or has already done so. Then the US dollar can resume its growth, which will look like a fall of the pair on the chart. Powell can also bypass the issues of inflation and the QE program, limiting himself to general phrases. In this case, it will be very difficult to count on a further fall of the pair. The bottom line is that the US dollar is waiting for Powell's statements and will rely on them in further movements.

EUR/USD – 4H.

Exchange Rates 28.07.2021 analysis

On the 4-hour chart, the pair's quotes continue to move along the corrective level of 76.4% (1.1782), which almost coincides with the level of 1.1772 on the hourly chart. Thus, nothing new can be added after studying the 4-hour chart. Even divergences do not make any sense now since they are very weak in the side corridor. Therefore, I recommend waiting for the Fed meeting and its results. Perhaps something will change after it.

Overview of fundamentals:

On July 27, there was no single economic report or other events in the European Union. In the US, two reports were released, one of which could cause the sale of the dollar, which we observed yesterday. But the movement was weak in any case. Thus, the information background was present yesterday, but it was weak.

News calendar for the United States and the European Union:

US - FOMC decision on the main interest rate (18:00 UTC).

US - accompanying FOMC statement (18:00 UTC).

US - FOMC press conference (18:30 UTC).

On July 28, the calendar of economic events in the European Union is again empty. In the US, as I said above, the Fed's decision on monetary policy will be known, and a press conference with Jerome Powell will be held.

COT (Commitments of Traders) report:

Exchange Rates 28.07.2021 analysis

The latest COT report showed that during the last reporting week, the mood of the "Non-commercial" category of traders again became more "bearish." Major players opened 7,083 short contracts on the euro and closed 5,643 long contracts. Thus, in the last five weeks, the number of short contracts focused on the hands of speculators has increased by 65 thousand, and the number of long contracts has decreased by 5 thousand. Therefore, a further fall in the European currency is very likely. However, over the past week, the euro/dollar pair has not continued falling quotes.

EUR/USD forecast and recommendations to traders:

At this time, the movements are very weak in the side corridor, and the information background does not help traders in any way. I recommend waiting for the pair to start moving in the usual mode.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" are small traders who do not have a significant impact on the price.

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Samir Klishi,
Analytical expert of InstaForex
© 2007-2021
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