EUR/USD – 1H.
On August 25, the EUR/USD pair first rebounded from the corrective level of 61.8% (1.1808), then from the Fibo level of 50.0% (1.1838), and returned to the level of 61.8%. Given that the distance between these levels is 30 points, the conclusion is obvious - yesterday the quotes moved in a sideways direction, with a very narrow one. Today, a new rebound from the corrective level of 61.8% will again work in favor of the European currency and resume growth towards the level of 50.0%. Closing the pair's exchange rate at the level of 61.8% will allow us to count on the continuation of the fall. At the same time, markets are preparing for tomorrow's speech by Jerome Powell in Jackson Hole at the annual economic symposium. For the first time in its history, the conference will be held online. Jerome Powell will present an overview of monetary policy, and the main question to it is as follows: "Will the Fed continue to target inflation, or will it move away from this indicator until the US economy fully recovers?" In addition, traders will try to understand from Powell's speech whether the Fed is in favor of introducing additional stimulus measures. Let me remind you that the US Congress has not agreed on a new package of economic assistance to the unemployed and small businesses. In any case, Powell's speech may affect the mood of traders. However, it will be tomorrow. And today in America - a report on orders for durable goods, which can also affect the euro/dollar pair.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed a reversal in favor of the US currency and generally continued the process of falling in the direction of the corrective level of 127.2% (1.1729). The pair's rebound from this Fibo level will work in favor of the EU currency and resume growth in the direction of the corrective level of 161.8% (1.2027). Quotes can also be rejected from an upward trend line that is approaching the current exchange rate. Closing the pair's rate below the trend line will significantly increase the chances of a further fall in the direction of the corrective level of 100.0% (1.1496).
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed another reversal and anchored under the corrective level of 261.8% (1.1825). However, above and below this level, quotes have been fixed several times. I believe that it is better to pay attention to the trend corridor and the lower charts now.
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. At the same time, the breakdown may be false. In this case, the drop in quotes will be resumed.
Overview of fundamentals:
On August 25, Germany released its second-quarter GDP report, according to which losses amounted to 9.7% q/q. In the US, the consumer confidence indicator was 84.8 with a forecast of 93.0. Nevertheless, the US dollar still rose in the afternoon.
News calendar for the United States and the European Union:
US - change in the volume of orders for long-term goods (12:30 GMT).
On August 26, the calendar of the European Union is empty, and in America, there will be a fairly important report on changes in the volume of orders for durable goods.
COT (Commitments of Traders) report:
The last COT report was very boring. Major market players in total (for all groups) increased short-contracts during the reporting week. However, the most interesting group of "Non-commercial" was engaged in reducing the number of long and short contracts on their hands. Speculators got rid of 4,500 and those and other contracts, so, in general, we can say that their mood has not changed at all during the reporting week. They still have 4 times more long contracts than short contracts on their hands, so in general, we can't say that their mood has become a bit more "bearish". Thus, I cannot conclude that this week the pair's quotes may fall based on the COT report.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro currency with the goals of 1.1771 - 1.1711, if the consolidation is made under the Fibo level of 61.8% (1.1808) on the hourly chart. I recommend buying a pair with the goals of 1.1838 and 1.1869 in case of a rebound from the level of 1.1808.
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.
