EUR/USD – 1H.
The EUR/USD pair performed a new fall to the level of 1.1772 on Tuesday. And this morning, the quotes again fulfilled the testing of the level of 1.1772. Thus, the behavior of traders is now as confusing as possible. It seems that they do not quite understand what to do with the euro/dollar pair. Or traders have already focused their attention on tomorrow's ECB meeting and are waiting for its results. Fixing the pair's exchange rate below the level of 1.1772 will allow traders to count on the continuation of the fall of quotes in the direction of the Fibo level of 100.0% (1.1704). Given that the calendars of economic events of the European Union and the United States are empty for the first three days of this week, traders now have nothing to base the opening of new deals on. Therefore, the last three days turned out to be as inactive as possible.
What can traders expect tomorrow? Experts' opinions on the importance of tomorrow's ECB meeting vary. Someone believes that the meeting will be passable. By and large, nothing has changed recently in the monetary policy of all three major central banks of the world (the Fed, the ECB, the Bank of England). And it is unlikely that anything will change this summer. The Fed and the Bank of England members gave signals to the markets that the stimulus programs may begin to be curtailed in the near future. However, the market did not receive any such hints from the ECB and Christine Lagarde.
On the contrary, Christine Lagarde has constantly repeated in recent weeks that the EU economy still needs help, and the QE program will continue to operate at least until March 2022. Thus, traders are unlikely to expect "hawkish" rhetoric tomorrow. By and large, Christine Lagarde will not change her rhetoric, which will be a neutral factor for the euro, or she will strengthen the "dovish" rhetoric, which will be a "bearish" factor for the euro.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new fall to the corrective level of 76.4% (1.1782). The rebound of the pair's exchange rate from this level will again work in favor of the EU currency and some growth in the direction of the corrective level of 61.8% (1.1890). Closing quotes below the level of 76.4% will increase the chances of a further fall in the direction of the next corrective level of 100.0% (1.1606). There are no emerging divergences in any indicator today. The pair's movements in recent days are very weak. This picture may persist until tomorrow's ECB meeting.
Overview of fundamentals:
On July 20, there was no single important event or economic report in America and the European Union. Thus, the information background was empty.
News calendar for the United States and the European Union:
On July 21, the calendars of macroeconomic events in the European Union and the United States are empty again. Thus, I do not expect strong movements today. There will be no information background.
COT (Commitments of Traders) report:
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 have opened 13,952 short contracts for the euro and a total of 2,332 long contracts. Thus, in the last four weeks, the number of short contracts focused on the hands of speculators has increased by 58 thousand, and the number of long contracts has increased by 1 thousand. Therefore, a further fall in the European currency is very likely. But bear traders need to put more pressure on the level of 1.1782. However, it should be noted that the total number of long and short contracts opened by all players is already almost the same. Recently, the "Commercial" category of traders has been actively getting rid of short positions.
EUR/USD forecast and recommendations for traders:
Sales of the pair are recommended with a target of 1.1704 if a close is made on the 4-hour chart below the level of 1.1782. I recommend buying the pair when it rebounds from the level of 1.1782 on the 4-hour chart with the targets of 1.1837 and 1.1890.
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.
