EUR/USD – 1H
Hello, dear traders! On Monday, EUR/USD fell to the trend line. The quote has not rebounded from the trend line yet. If a rebound takes place, the trend may reverse and the price may start rising to the 61.8% retracement level of 1.1919. If the quote closes below the trend line, the downward trend is likely to extend to 1.1772. On Monday, the macroeconomic calendar did not contain any significant event both in the United States and the European Union. Therefore, it was a calm day in the market. Today, the situation may change because of sluggish trading in EUR/USD recently. Traders will have to trade based on far from the most important data.
Several reports are scheduled for release in Germany today. They are industrial production, the ZEW Economic Sentiment Index, and the ZEW Current Conditions indicator. These reports have crucial importance for Germany. However, in terms of the whole eurozone, the data is unlikely to somehow affect the euro. Meanwhile, the ZEW Economic Sentiment Index for the eurozone could make traders be more active in the market. Anyway, the indicator is expected to plunge to 35.3 from 42.7. Likewise, the third estimate of the eurozone's Q2 GDP, as well as Q2 employment change, is expected to come out today. Both reports are of utmost importance as they can push the euro upward. Otherwise, it may be yet another calm trading day in the market.
EUR/USD – 4H
On the H4 chart, EUR/USD pulled back from the 61.8% retracement level of 1.1890. Therefore, the price may well reverse and fall to the 76.4% retracement level of 1.1782. Alternatively, if the quote closes above the 61.8% retracement level, the upward trend is likely to extend to the 50.0% retracement level of 1.1978. Neither of the indicators has formed divergence today.
Macroeconomic calendar:
Eurozone - ZEW Economic Sentiment Index SEP, GDP Growth Rate 3rd Est
On September 7, macroeconomic calendars in the euro area and the US do not contain any important events. Only the eurozone's two reports may draw traders' attention.
Commitments of Traders (COT) report:
The latest COT report logged an increase in bearish sentiment among Non-commercial traders. Large market players have closed 1,968 long positions and have opened 11,139 short ones. Thus, the total number of long positions held by speculators decreased to 192K, while short positions increased to 180K. Speculators have been actively selling off the euro for several months. At the same time, the pace of decrease in EUR has been very slow. Moreover, EUR/USD has been growing, despite the outcome of COT reports.
Forecast for EUR/USD:
Traders should consider buying the pair in case of a rebound with the target set at 1.1919 on the H1 chart. Short positions should be considered if the price closes below the trend line with the target placed at 1.1772 on the H1 chart.
TERMS:
Non-commercial traders are large market players: banks, hedge funds, investment funds, private, and large investors.
Commercial traders are commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import transactions.
Non-reportable positions are small traders who do not have a significant impact on the price.
