EUR/USD – 1H.
Hello, traders! On August 3, the EUR/USD pair continued the process of falling in the direction of the first upward trend line, but before reaching it, it performed a reversal in favor of the EU currency and began a weak growth process. Thus, until now, the mood of traders is characterized as "bullish". There was not much news on Monday. By and large, traders continue to trade under the influence of the difficult situation with coronavirus in America. However, recently, the topic of the upcoming presidential elections in the United States has been discussed more and more often. In short, the situation is as follows: Donald Trump is eager to be re-elected for a second term and, according to most experts, is ready to go to any tricks to achieve this goal. As recently as last week, Trump suggested rescheduling the election. They say that because of the pandemic, it is not safe for Americans to go to the polls and vote, and voting by mail "can be falsified". Of course, this idea is not supported by neither the Democrats nor the Republicans. And the American people at this time do not support Donald Trump himself, under whom the country's economy has fallen, unemployment has grown to record levels, and the entire country has been mired in an epidemic. In addition, under Trump, the national debt has grown significantly, as well as relations with China have deteriorated.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair fell to the corrective level of 127.2% (1.1729) and rebounded from it. Thus, at this time, the process of price growth in the direction of the corrective level of 161.8% (1.2027) can be resumed. Only the closing of the pair's exchange rate under the Fibo level of 127.2% will allow traders to count on the continuation of the fall in the direction of the corrective level of 100.0% (1.1496). Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a false breakout of the corrective level of 261.8% (1.1825). As a result, the rebound from this level was performed, which now allows us to count on a slight drop in quotes. However, on the 4-hour chart, the pair failed to close below the level of 1.1729, so the process of falling is still suspended.
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-lasting.
Overview of fundamentals:
On August 3, the European Union released several reports on business activity in the manufacturing sectors. It turned out that all manufacturing sectors are recovering, which is good for the European economy. In America, business activity indices also showed good dynamics, especially the ISM index. However, traders are now trading without paying attention to the information background.
News calendar for the United States and the European Union:
On August 4, the EU and US calendars are completely empty, so there will be no background information for the pair.
COT (Commitments of Traders) report:
The latest COT report was extremely interesting. The Non-commercial group opened as many as 36277 purchase contracts during the reporting week. This is a very high value. And it was it that formed the upward trend for the reporting period. Thus, this figure alone from the entire report was already enough to make a conclusion about the current mood of major traders in the European currency. The Commercial group also actively opened and closed contracts, but data for this group is not important. In total, 241 thousand long-contracts and only 79 thousand short-contracts are now placed in the hands of speculators. Thus, the latest COT report does not yet give any reason to assume the end of the upward trend.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend cautiously buying the currency pair with the goal of 1.2024, as the rebound from the level of 1.1729 was performed. I recommend selling the pair with the target level of 1.1496 if the closing is performed under the level of 1.1729, as well as under the upward trend line on the hourly chart.
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.
