EUR/USD – 1H.
The EUR/USD pair made two attempts to close above the corrective level of 76.4% (1.1837) on Thursday. However, both failed. Two rebounds did not lead to a fall of the pair, so the quotes moved in a horizontal direction all day. The consolidation of quotes above the level of 1.1837 will allow us to count on the resumption of growth in the direction of the corrective level of 61.8% (1.1919). Meanwhile, in the European Union, the results of the meeting of the European Central Bank were summed up yesterday. This event is very important for the euro. However, looking ahead, traders practically did not react to it. The ECB left the key rates unchanged: the credit rate at 0% and the deposit rate at -0.5%. Also, the volumes and terms of the PEPP program were not changed. At a press conference, ECB President Christine Lagarde said that progress in the recovery is becoming more noticeable, the growth of inflation is unlikely to persist for a long time, and the risks for the economy are balanced.
The ECB also announced that interest rates would remain at current values or lower until inflation reaches 2%, and progress in core inflation is not high enough. Let me remind you that core inflation is an indicator without considering changes in food and energy prices. Central banks pay more attention to it. The ECB also raised its GDP forecast for 2021 from 4.6% to 5.0% and lowered it for 2022 from 4.7% to 4.6%. The inflation forecast for 2021 increased from 1.9% to 2.1%, and for the next year - from 1.5% to 1.7%. The ECB statement also said that favorable financial conditions might continue with smaller volumes of the PEPP program in the coming months. Thus, the results of the ECB meeting can be assessed as positive, and the rhetoric of Christine Lagarde as optimistic. But, as I have already said, the European currency did not receive any support.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a rebound from the corrective level of 61.8% (1.1890). Therefore, the process of falling can be continued in the direction of the corrective level of 76.4% (1.1782). The rebound of quotes from this level will allow us to count on a reversal in favor of the EU currency and some growth in the direction of the corrective level of 61.8% (1.1890). Closing the pair's exchange rate at the level of 76.4% will increase the chances of continuing the fall in the direction of the next Fibo level of 100.0% (1.1606).
News calendar for the United States and the European Union:
EU - ECB President Christine Lagarde will deliver a speech (09:30 UTC).
US - producer price index (12:30 UTC).
On September 10, only the speech of Christine Lagarde will take place in the European Union. Perhaps today, traders will pay more attention to the statements of the ECB president, which will cause a reaction. In America, a secondary report on producer prices will be released. In general, the information background will be moderate today.
COT (Commitments of Traders) report:
The latest COT report showed that the mood of the "Non-commercial" category of traders became more "bearish" again during the reporting week. Major players closed 1,968 long contracts on the euro and opened 11,139 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 192 thousand, and the total number of short contracts increased to 180 thousand. Let me remind you that for several months speculators have been actively getting rid of the euro. However, at the same time, the EU currency itself is falling very slowly and weakly. Moreover, in the last couple of weeks, it has been growing in tandem with the dollar, despite the indications of COT reports.
EUR/USD forecast and recommendations for traders:
Today, I recommend buying a pair with a target of 1.1919 on the hourly chart if a close is made above the level of 76.4% (1.1837). I recommended selling if there is a close under the level of 1.1837 on the hourly chart, with the target of 1.1772. It should be kept open for now.
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.
