EUR/USD – 1H.
The EUR/USD pair continued its growth process on Wednesday after closing above the corrective level of 100.0% (1.1704), and it still rose to the level of 1.1772 by the end of the day. The activity of traders this week is very low. Nevertheless, the European currency continues its growth. The rebound of quotes from the level of 1.1772 will allow us to count on a reversal in favor of the US dollar and a slight fall in the direction of the Fibo level of 100.0%. Closing quotes above the level of 1.1772 will increase the probability of continuing growth in the direction of the next corrective level of 76.4% (1.1837). The information background of yesterday could cause specific changes in the mood of traders. The report on the volume of orders for long-term goods in the United States was the only interesting event of the day and turned out to be slightly better than traders' expectations. Thus, the US currency could perform growth in the second half of the day. However, instead of the expected growth, the dollar resumed falling, and its beginning did not coincide with the report.
I concluded that the report on orders has nothing to do with it at all, and the growth of the pair's quotes by 40 points in the second half of the day was caused by other factors. And most likely, it was just a normal movement of 40 points. Recently, the activity of traders is so low that I already pay attention to any movement above 40 points. Traders continue to wait for Jerome Powell's speech in Jackson Hole this Friday, and they have been waiting for him since Monday. What exactly the Fed president will say on August 27 is the number one topic for discussion in the foreign exchange market at this time. Opinions differ extremely strongly, so the entire market is now in a state of compressed spring. And it can shoot in any direction and with any force. Today, traders still need to pay attention to the GDP report, and it may cause a new fall in the dollar since the growth rate in the second quarter initially (in the last estimate) turned out to be weaker than traders expected.
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, and the growth process continued in the direction of the corrective level of 76.4% (1.1782). A rebound from this level will work in favor of the US currency 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). No indicator has any brewing divergences today.
News calendar for the United States and the European Union:
EU - ECB report from the monetary policy meeting (11:30 UTC).
US - change in GDP volume for the quarter (12:30 UTC).
US - number of initial and repeated applications for unemployment benefits (12:30 UTC).
On August 26, the calendar of economic events in the European Union contains only the ECB report, which is unlikely to interest traders. In the US today, there is a fairly important GDP report. Thus, the information background will be present today, but it is likely to be weak.
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 have 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 staying in the pair's purchases with a target of 1.1837 on the hourly chart if a close is made above the level of 1.1772. I recommend selling 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.
