EUR/USD – 1H.
On Friday, July 9, the EUR/USD pair performed a reversal near the corrective level of 76.4% (1.1837) and continued the growth process, which began after the quotes were fixed above the downward trend line. Thus, I remind you that the mood of traders has changed to "bullish". Therefore, the pair can be expected to continue growing in the direction of corrective levels of 61.8% (1.1919) and 50.0% (1.1985). The information background has recently been quite diverse. The most interesting news related to the speeches of representatives of the ECB and the Fed. Christine Lagarde and Jerome Powell often speak but rarely talk about the economy and monetary policy. And in any case, the mood that reigns now in the central banks of the United States and the EU is well known to traders. By and large, in recent months, everything has been revolving around inflation and economic recovery. In the US, inflation rose to 5%, which is a fairly high value.
In the European Union - up to 2%. But at the same time, the American economy is recovering much faster than the European one. Jerome Powell made it clear that the Fed will not scale back its stimulus program simply because inflation has risen sharply. Powell and Lagarde have repeatedly stated that the jump in inflation is temporary due to the low base of last year. Thus, central banks expect that in the near future inflation will begin to slow down, which will allow them to continue to support the economic recovery more calmly through various stimulus programs. Traders also show minimal interest in this kind of information. They are interested in economic reports and any important fundamental events, which are not so much now. Therefore, the attention of traders may be now shifting more towards graphical analysis.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a rebound from the Fibo level of 76.4% (1.1782) and an increase to the corrective level of 61.8% (1.1890). The rebound of the pair's exchange rate from this level will allow us to count on a reversal in favor of the US currency and a resumption of the fall in the direction of the 76.4% level. Closing quotes above the level of 61.8% will increase the chances of continuing growth in the direction of the next corrective level of 50.0% (1.1978). There are no emerging divergences in any indicator today.
Overview of fundamentals:
On July 9, the calendar of economic events in America was empty, and Christine Lagarde made a speech in the European Union, and the ECB report from the monetary policy meeting was released. These events did not have any impact on the mood of traders. The pair moved sluggishly all day.
News calendar for the United States and the European Union:
On July 12, the calendar of economic events in America and the European Union does not contain a single entry at all. Thus, the information background today will be completely absent. Consequently, the movements of the euro/dollar pair can still be extremely sluggish today.
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 3,871 long contracts on the euro, but also opened 16,472 short contracts. Thus, in the last three weeks, the number of short contracts focused on the hands of speculators has increased by 44,000, and the number of long contracts has decreased by 1,000. Therefore, a further fall in the European currency is very likely. At the same time, the general mood of speculators remains "bullish", since there are one and a half times more long contracts on their hands.
EUR/USD forecast and recommendations for traders:
Today, I recommend selling the pair with targets of 1.1837 and 1.1772, if a rebound is made on the 4-hour chart from the level of 1.1890. I recommend buying the pair if the quotes on the 4-hour chart close above the level of 1.1890 with the goals of 1.1919 and 1.1985.
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.
