EUR/USD – 1H.
On Monday, the EUR/USD pair continued the process of falling in the direction of the corrective level of 100.0% (1.1704). However, the whole day passed in a very boring atmosphere. The activity of traders left much to be desired. But on Monday, there was an empty information background. Thus, traders decided to wait to receive important information, and only after that will they be ready for more active trading. The downward trend corridor currently characterizes the mood of most traders as "bearish." Closing the pair's exchange rate above this level will favor the European currency and the resumption of growth in the direction of the corrective level of 76.4% (1.1837).
Meanwhile, nothing interesting is happening in the European Union. In the United States, the most interesting news is related to politics. Let me remind you that already in September-October 2021, Washington may face the threat of a technical default since the Treasury's borrowing limit is almost exhausted at the moment.
It means that the Ministry of Finance can no longer spend money servicing previously borrowed debts. Thus, technically, the country can declare a default. In Congress, Democrats and Republicans are now struggling to agree on raising the national debt limit. Republicans oppose this decision, however, most likely to force Democrats to make concessions on other issues. After all, a technical default is not needed either by the first or the second.
Moreover, the Democrats can do without the help of the Republicans since they have the necessary majority of votes in both the Senate and the House of Representatives. If all Democratic senators support this issue, then the help of Republicans will not be needed at all. In addition, there is a heated discussion of two packages of economic development – infrastructure and social. Together, these two packages are estimated at 4-5 trillion dollars, and the Republicans are trying to reduce their volume by at least half. However, in this matter, the Democrats can make a decision solely on their own. There is also a heated debate in Congress about the size of these packages.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes were secured under the corrective level of 76.4% (1.1782). Thus, the process of falling quotes can be continued in the direction of the next Fibo level of 100.0% (1.1606). There are no emerging divergences in any indicator today. The decline in the pair's quotes continues.
News calendar for the United States and the European Union:
On August 10, the calendars of economic events in the European Union and America again do not contain a single interesting entry. We could mention the ZEW Institute's business sentiment index for the EU or a similar index for Germany, but they can hardly be called important. Thus, the information background today will be very weak or completely absent. Traders will be waiting for important news on Wednesday.
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 practically did not change. Major players closed 625 short contracts on the euro and closed 3,028 long contracts. Thus, in the last seven weeks, the number of short contracts focused on the hands of speculators has increased by almost 70 thousand, and the number of long contracts has decreased by 14. Therefore, a further fall in the European currency is very likely, according to COT reports. And the past week gives reason to assume that it is the pair's decline that will continue, but at the same time, it will be quite challenging to close below the area of 1.1730-1.1760.
EUR / USD forecast and recommendations for traders:
Today, I recommend buying a pair with targets of 1.1772 and 1.1837 on the hourly chart if the quotes perform a rebound from the level of 1.1704. I do not recommend considering new sales yet, since the pair is located near the strong area of 1.1730-1.1760, from which it has repeatedly performed a rebound.
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.
