EUR/USD – 1H.
On Friday, the EUR/USD pair made another unsuccessful attempt to close above the corrective level of 76.4% (1.1837), rebounded from it, and began falling towards the level of 1.1772, which continues today. The rebound of quotes from the level of 1.1772 will allow traders to count on a reversal in favor of the EU currency and another return to the Fibo level of 76.4%. Closing the pair's exchange rate below the level of 1.1772 will increase the probability of a further fall in the direction of the next corrective level of 100.0% (1.1704). On Friday, the only important event of the day turned out to be unimportant. ECB President Christine Lagarde did not impress traders on Thursday, immediately after the regulator's meeting. And on Friday, there were even fewer important theses in her speech. Therefore, traders did not even pay attention to this event. Also, a report on producer prices was released in the US, which rose to 8.3% y/y. It means that prices continue to increase, and the main indicator of inflation at the end of August may also increase.
Let me remind you that the last value of inflation was 5.4% y/y, and many members of the Fed believe that inflation will not grow further. Nevertheless, on September 14, when the inflation report for August is released, they can expect a surprise, as the producer price index makes it clear that prices continue to rise. Thus, the Fed may face a serious dilemma at the next meeting: inflation remains high and may continue to accelerate. At the same time, the labor market and the economy have begun to slow down their recovery due to the coronavirus pandemic and its new wave. In general, the next Fed meeting promises to be very important. In the meantime, the US currency has started a new growth, which may not last very long. At the moment, traders are still wondering what decisions the Fed will make regarding the economic assistance program in the near future. Traders have been waiting for the curtailment of this program for a long time, which can support the dollar in the medium term. But so far, this has not happened.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a drop to the corrective level of 76.4% (1.1782). The rebound of quotes from this level will allow traders to count on a reversal in favor of the euro and a resumption of growth in the direction of the corrective level of 61.8% (1.1890). Closing the pair's exchange rate at 76.4% will increase the probability of further growth towards the next Fibo level of 100.0% (1.1606). There are no emerging divergences in any indicator today.
News calendar for the United States and the European Union:
On September 13, the calendars of economic events in the European Union and the United States were empty. Thus, there will be no information background today, which may have a rather negative impact on the activity of traders. Although, judging by the night trading, the pair will not stand in one place 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 more "bullish." Major players closed 837 long contracts on the euro and as many as 16,528 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 191 thousand, and the total number of short contracts - to 163 thousand. Over the past few months, the "Non-commercial" category of traders has been actively getting rid of long contracts on the euro and increasing short. However, the euro has grown very slightly during this time. A sharp drop in the number of short contracts may mean that speculators are preparing for new growth of the European currency.
EUR/USD forecast and recommendations for traders:
Today, I recommend buying the pair with a target of 1.1837 on the hourly chart if there is a rebound from the level of 76.4% (1.1782) on the 4-hour chart. I recommended selling if there is a close under the level of 1.1837 on the hourly chart, with the target of 1.1772. Now, it should be kept open, and the goal is to correct to 1.1782. New sales – after closing at the level of 1.1772 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.
