EUR/USD – 1H.
The EUR/USD pair performed a new reversal in favor of the US currency on Friday and fell almost to the corrective level of 100.0% (1.1704). A rebound of the pair's exchange rate from this level will favor the EU currency and some growth in the direction of the level of 1.1772. Closing below the level of 100.0% will increase the probability of a further fall towards the next level of 1.1629. The downward trend corridor retains at this time still characterizes the mood of traders as "bearish."
The US dollar has been growing for more than a week. On Friday, the information background was average in strength. However, traders did not pay due attention to it. The report on inflation in the European Union and the consumer sentiment index in the United States did not impact traders. Thus, traders are already looking in the direction of only one event – the Fed meeting. Given that traders were quite actively buying the dollar at the end of last week, I can assume that they believe in reducing the US economic stimulus program.
For the dollar, the decrease in volumes under the QE program will be a positive factor. Therefore, traders are now waiting for exactly such a decision from the American regulator. And most analysts agree with this opinion. Let me remind you that James Bullard and other Fed board members have already stated several times that the volume of stimulus should be gradually reduced since inflation has accelerated to high values. The labor market is recovering at a good pace. However, apart from the Fed meeting this week, there will be very few other important events. Fed President Jerome Powell will deliver a speech on Friday. From the economic reports this week, I can only highlight the indices of business activity in the services and manufacturing sectors in the United States and the European Union, which are not always interested in traders. Thus, the Fed meeting is certainly the most important event of the week and almost the only important one.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed under the corrective level of 76.4% (1.1782). Thus, the process of falling quotes can be continued in the direction of the next corrective level of 100.0% (1.1606). There are no emerging divergences in any indicator today. There are no signals to buy the pair at this time.
News calendar for the United States and the European Union:
On September 20, the calendars of economic events in the United States and the European Union were empty. There is no single record to pay attention to. Thus, there will be no information background today. Nevertheless, the US dollar continued its growth even on Monday night. Traders can continue buying the US currency without any statistics amid expectations of a reduction in the QE program in the US, which may be announced on Wednesday.
COT (Commitments of Traders) report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders practically did not change. Speculators closed 4,195 long contracts on the euro currency and 4276 Short contracts. Thus, the total number of Long contracts in the hands of speculators decreased to 187 thousand, and the total number of short contracts - to 160 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, at the same time, the euro has grown very slightly during this time. Now speculators have stopped getting rid of only long contracts for the euro. Thus, this week the European currency may try to start a new upward trend.
EUR/USD forecast and recommendations for traders:
Today, I recommend buying a pair with a target of 1.1772 when the quotes rebound from the level of 1.1704 on the hourly chart. I recommend new sales if there is a close below the level of 1.1704 on the hourly chart, with the target of 1.1629.
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.
