EUR/USD – 1H.
The EUR/USD pair performed an increase to the corrective level of 76.4% (1.1837), a rebound from it, and a reversal in favor of the US currency. As a result, the process of falling towards the level of 1.1772 began. The rebound of the pair's quotes from this level will favor the EU currency and the resumption of growth in the direction of the level of 1.1837. Closing at 1.1772 will increase the probability of continuing the fall in the direction of the next corrective level of 100.0% (1.1704). During yesterday, the information background was quite interesting for both the euro and the dollar. However, I cannot say that anyone or several reports strongly impacted the pair's movement during the day. In Italy and France, inflation indicators were released yesterday. Days earlier – in Germany and Spain. Everywhere, the consumer price index accelerated significantly compared to the previous month. Overall inflation across the Eurozone rose from 2.2% to 3%.
Thus, the growth of the European currency in the first half of the day was quite expected. But the growth of the dollar in the second half of the day can not be explained by anything other than graphical signals. In America, only one interesting index was released yesterday – an indicator of consumer confidence, which fell significantly in August and amounted to only 113.8 points. However, the US dollar grew in the second half of the day, so traders ignored this indicator. In general, the growth of the euro/dollar pair remains, and yesterday's fall can be regarded as a correction. Let me remind you that the key event for the US currency happened last Friday when Jerome Powell did not announce the timing of the curtailment of the asset purchase program. Thus, at this time, traders have no idea when the Fed will begin to reduce the monthly purchase of bonds and what it will depend on. However, this is a bearish factor for the dollar, so this currency may continue to become cheaper in the coming weeks.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed above the corrective level of 76.4% (1.1782). However, after forming a bearish divergence, the CCI indicator turned in favor of the US currency, and the process of falling towards the corrective level of 76.4% began. Closing the pair's exchange rate below the level of 76.4% will increase the probability of continuing the fall in the direction of the next Fibo level of 100.0% (1.1606).
News calendar for the United States and the European Union:
EU - index of business activity in the manufacturing sector (08:00 UTC).
EU - unemployment rate (09:00 UTC).
US - change in the number of employees from ADP (12:15 UTC).
US - ISM manufacturing index (14:00 UTC).
On September 1, reports on business activity and the unemployment rate will be released in the European Union. I do not believe that traders will respond to these economic data with strong purchases or sales of the euro currency. More important reports will be released in the afternoon in the United States. And there is a reaction to expect.
COT (Commitments of Traders) report:
The latest COT report showed that the mood of the "Non-commercial" category of traders during the reporting week became much more "bearish." Major players closed 39,475 long contracts for the euro and 7,201 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 194 thousand and, for the first time in a long time, fell below 200 thousand. Such a strong reduction in long contracts indicates that the euro currency is still under pressure from traders. However, at the same time, I draw attention to the fact that the fall of the European currency in the long term remains extremely weak. And in the last week, the euro currency has been growing in a pair with the US dollar.
EUR/USD forecast and recommendations for traders:
Today, I recommend new purchases of the pair with a target of 1.1837 on the hourly chart if a rebound from the level of 1.1772 is performed. Sales were recommended if there is a rebound from the level of 1.1837 on the hourly chart, with a target of 1.1772. Now, these positions should be kept open.
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.
