EUR/USD – 1H.
On Thursday, the EUR/USD pair tried to continue the process of falling after closing under the corrective level of 100.0% (1.1704), performed a return to the level of 100.0%, and rebound from it. Thus, the process of falling quotes after closing under the level of 1.1704 can be continued in the direction of the next Fibo level of 127.2% (1.1552). Fixing the pair's quotes above the level of 100.0% will favor the European currency and the beginning of growth in the direction of the level of 1.1772. The information background of yesterday was the most boring thing you can think of. Even from the movement of the pair during the day, this is visible and understandable. By and large, only one report could attract the attention of traders. It is the number of primary and secondary applications for unemployment benefits in the United States. The first indicator was slightly worse than expected, and the second one was slightly better. In general, it is a neutral report. And there were no other reports during the day.
However, one point is now noteworthy. Usually, when traders are going to complete the main movement (in our case, a fall), the days when there is no information background are often used for corrections against the trend. Yesterday, the pair's quotes failed to even close above the level of 100.0%. Thus, I am still more inclined to continue the fall. Although more reasonable conclusions can be drawn after today since there will also be no information background.
Moreover, if traders cannot close above the level of 1.1704 today, then the chances of a further fall of the pair will increase even more. Separately, it should be said that the US currency may experience the support of traders until the symposium in Jackson Hole, which will be held next week. Jerome Powell is due to make a speech at this meeting, and, according to most traders, he may announce the curtailment of the economic stimulus program.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new reversal in favor of the US currency and continued the process of falling in the direction of the corrective level of 100.0% (1.1606). However, the new bullish divergence of the MACD indicator allows traders to count on a reversal in favor of the euro and some growth in quotes. Leaving the rate below its last low will cancel the divergence. The rebound of the pair's quotes from the level of 100.0% will also allow us to count on a reversal in favor of the EU currency and new growth in the direction of the corrective level of 76.4% (1.1782).
News calendar for the United States and the European Union:
On August 20, the calendars of economic events in the European Union and the United States are empty. Thus, bear traders can retreat a little from the market and give the bulls a chance to move up a little. However, it makes no sense to think about growth before closing above 1.1704. There will be no information background today.
COT (Commitments of Traders) report:
The latest COT report showed that the mood of the "Non-commercial" category of traders during the reporting week became even more "bearish." Major players have opened 18,202 short contracts for the euro and 10,841 long contracts. Thus, in the last eight weeks, the number of short contracts focused on the hands of speculators has increased by almost 90 thousand, and the number of long contracts has decreased by 4. Therefore, a further fall in the European currency is very likely, according to COT reports. However, the past week has shown that bear traders could have already had enough and left the market, and bull traders could take their place. The pair failed to break through the level of 1.1704, which I consider a very remarkable moment.
EUR/USD forecast and recommendations for traders:
Today, I recommend buying the pair with a target of 1.1772 on the hourly chart if a close is made above the level of 1.1704. Sales were recommended if there is a close under the level of 1.1704 with a target of 1.1606. At this time, these positions should be kept open.
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.
