EUR/USD – 1H.
The EUR/USD pair performed a reversal in favor of the US dollar on September 7 and resumed the process of falling. As a result, as of Tuesday morning, the pair performed a fall to the previous two lows and is now preparing for a reversal in favor of the EU currency. Thus, during today, despite the consolidation under the Fibo level of 76.4% (1.1821), the growth process can be resumed in the direction of the corrective level of 61.8% (1.1857). The information background on Monday was almost zero. No economic reports were published neither in the US nor in Europe. This explains the very inactive trading during the past day. Traders are now focused on the upcoming ECB meeting, the results of which will be announced this week. It is unlikely that the European Central Bank will lower the key rate, as it continues to remain at a very low negative value of -0.5% and has not changed since the beginning of the pandemic around the world. Thus, traders should pay more attention to the ECB's press conference and accompanying statement. They will hint at a future increase in the PEPP pandemic response program or an expansion of the standard QE program. Both steps are "bearish" for the euro currency. Today, I recommend paying attention to the GDP report for the second quarter of the Eurozone.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair, after the formation of a bearish divergence at the CCI indicator, performed a fall to the upward trend line, which continues to characterize the current mood of traders as "bullish". Thus, the rebound of quotes from this line may work in favor of the euro currency and the resumption of the growth process in the direction of the corrective level of 161.8% (1.2027). Fixing the pair's rate under the trend line will allow traders to expect a continuation of the fall in the direction of the lower border of the sideways trend corridor, which is still in force.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed another reversal in favor of the US dollar and fell to the lower border of the upward trend corridor, closing under which will allow traders to count on the continuation of the fall in quotes in the direction of the corrective level of 200.0% (1.1566).
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 may be strong, but in the long term.
Overview of fundamentals:
On September 7, not a single interesting economic report was published in America and the European Union. There was also no regular news of a political or social nature.
News calendar for the United States and the European Union:
EU - change in GDP (09:00 GMT).
On September 8, the calendar of economic events in America is empty. In the EU, the GDP report will be released. Thus, the information background will not be strong today.
COT (Commitments of Traders) report:
The latest COT report was very interesting and informative. According to the results of the reporting week, major traders of the "Non-commercial" group closed 10,937 long contracts and opened 3,139 short contracts. This means that during the reporting week, "bearish" sentiment prevailed among speculators. But does this mean that the general mood of speculators has changed to "bearish" and now the euro currency will be actively sold off? The "Non-commercial" group still has 5 times more long than short contracts in its hands. Over the past 10 weeks, speculators have been building up long contracts and getting rid of short. Thus, so far, only one COT report suggests that the upward trend in the euro is complete. Nevertheless, this is a bad "bell" for the euro currency.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro currency with targets of 1.1762-1.1700, if the closing is performed under the trend line on the 4-hour chart. I recommend new purchases of the pair if there is a rebound from the trend line on the 4-hour chart with targets of 1.1900-1.2027.
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.
