EUR/USD – 1H.
Hello, traders! The EUR/USD pair resumed the growth process on July 30 after another small pullback. Both upward trend lines remain in force and continue to eloquently indicate the "bullish" mood of traders. Moreover, it is now possible to build a third upward trend line, which will have an even stronger tilt angle. Thus, the upward trend is maintained. Yesterday was another "black" day for the US currency. If a day earlier, the Fed did not support the dollar at all, which thought a little and resumed falling, then yesterday the report on US GDP, we can say, finished it off. The fall of the American economy in the second quarter was 32.9%, which is the absolute anti-record for the last 100 years. More than the US economy has never lost, although many experts continue to compare the current crisis with the Great Depression. However, in those days, statistics were not as accurate as they are now, so it is impossible to say with certainty what kind of decline the American economy was then. The fact remains that the US currency continues to fall after the US economy, which is very logical.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair secured above the corrective level of 127.2% (1.1729), and then rebounded from this level from above. Thus, the process of price growth continues in the direction of the corrective level of 161.8% (1.2024). The bearish divergence of the MACD indicator was canceled very quickly, as the pair closed above its last peak. The rebound of the pair's exchange rate from the Fibo level of 161.8% will allow traders to expect a reversal in favor of the US dollar and a slight fall.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair made a consolidation above the corrective level of 261.8% (1.1825), which increases the probability of further growth in the direction of the next corrective level of 323.6% (1.2084).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair, after rebounding from the lower line of the "narrowing triangle", performed an increase to the upper line of the "triangle", which now allows you to count on rebounding from it (at the end of the week) and resuming the fall. Now everything is going to the point that the closure will be performed over the triangle.
Overview of fundamentals:
On July 30, the European Union released a report on unemployment, which showed its increase to 7.8%, and in Germany - the unemployment rate (6.4%), changes in GDP (-10.1% q/q and -11.7% y/y) and inflation (0% y/y and -0.1% y/y). In America - GDP (-32.9% q/q/) and applications for unemployment benefits (+1.434 million). In general, both European and American news were weak. Therefore, at first, the euro currency fell slightly, and then the dollar resumed falling.
News calendar for the United States and the European Union:
EU - change in GDP (09:00 GMT).
EU - consumer price index (09:00 GMT).
US - change in the level of income and expenditure of the population (12:30 GMT).
US - consumer sentiment index from the University of Michigan (14:00 GMT).
On July 31, all traders' attention will be focused on the EU GDP report for the second quarter. It is expected to decrease by 12.0%, which can have a very serious impact on the positions of the euro currency on Friday.
COT (Commitments of Traders) report:
The latest COT report, released on Friday, showed major changes in the mood of major market players. Changes that exceed or are close to 10,000 contracts are highlighted in green and red. As you can see, almost all the cells in the last report are colored green or red. Speculators (the "Non-commercial" group) actively increased long-contracts for the euro in the reporting week and at the same time got rid of short-contracts (-8100). Commercial players (the "Commercial" group) entered the market with both purchases and sales of euros. Thus, in total, more than 80,000 new contracts were opened by all groups of traders during the reporting week. The activity of traders in the euro has increased significantly, and the "bullish" mood has remained.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend continuing to buy the currency pair with a target of 1.2024, as the close was made over the last peak of bearish divergence on the 4-hour chart. However, the EU GDP report may cause the euro to fall, so you need to be careful with purchases at this time. I recommend selling the pair if the quotes are fixed below the level of 1.1729 with the goal of 1.1496.
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.
