EUR/USD – 1H.
The EUR/USD pair continued its growth process on Monday after closing above the corrective level of 100.0% (1.1704) in the direction of the level of 1.1772. The activity of traders on the first day of the week was low. Nevertheless, the European currency continued to grow. The rebound of the pair's exchange rate from this level will allow us to count on a reversal in favor of the US currency and a resumption of the fall in the direction of the Fibo level of 100.0%. Closing quotes above the level of 1.1772 will increase the probability of further growth in the direction of the next corrective level of 76.4% (1.1837).
Meanwhile, the information background of the first day of the week was quite eloquent. In the European Union and the United States, business activity in the services and manufacturing sectors decreased by several points. It is especially important for the United States since the business activity is directly correlated with the pace of economic recovery and the labor market. And without a high pace of economic recovery and the labor market, it will be difficult for the Fed to start tightening monetary policy, which is now a lot of talk on the markets.
Thus, although the business activity indices fell both in the United States and in the European Union, these reports caused a drop in the US dollar, which has recently been growing precisely due to the factor of a possible announcement about the curtailment of the asset purchase program in the coming weeks. However, now that the spread of the COVID delta strain is increasing in America, and the latest reports were not the best, traders no longer believe that the Fed will be ready to announce the curtailment of the QE program in the near future. Of course, it will be better to conclude the symposium in Jackson Hole. Jerome Powell will speak at the event on Friday. But so far, there are more prerequisites for the fact that the Fed president will not rush to make statements about the termination of monetary stimulus to the US economy.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a reversal in favor of the EU currency after the formation of a bullish divergence at the MACD indicator. Thus, the growth process continues toward the corrective level of 76.4% (1.1782). The rebound of the pair's exchange rate from this level will work in favor of the US dollar and the resumption of the fall in the direction of the corrective level of 100.0% (1.1606). A close above 76.4% will increase the probability of further growth towards the next Fibo level of 61.8% (1.1890). There are no emerging divergences today.
News calendar for the United States and the European Union:
On August 24, the calendars of economic events in the European Union and the United States are empty. It means that today the influence of the information background will be absent. However, traders already have a lot of food for thought, allowing them to make trading decisions.
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 more "bullish." Major players opened 21,602 long contracts on the euro and closed 4,359 short contracts. Thus, bull traders behaved more actively than bears for the first time in the last two months. A further fall in the European currency is now not as likely as it was a week earlier. At the moment, the advantage remains in the hands of investors in the European currency since they have more long contracts than short contracts on their hands. Based on this, the mood of the "Non-commercial" category of traders, which is the most important, remains "bullish."
EUR/USD forecast and recommendations for traders:
Today, I recommend buying the pair with a target of 1.1772 on the hourly chart since the closing was made above the level of 1.1704. Sales are recommended if there is a rebound from the level of 1.1772 on the hourly chart with a target of 1.1704.
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.
