On Friday, the EUR/USD pair declined to the corrective level of 50.0% (1.0864), rebounded from this level, and started growing towards the Fibonacci level of 61.8% (1.0917). A rebound from this level will again favor the US dollar and a return to the 1.0864 level. Consolidating the pair above the 1.0917 level will increase the chances of continued growth towards the next corrective level of 76.4% (1.0984).
The waves still indicate only one thing: the continuation of the bearish trend. Even on Friday, the new downward wave was objectively weak, but it broke the last low, and the peak of the last upward wave was lower than the peak of the previous wave. Thus, at this time, there are no signs of a change in traders' sentiment to bullish. If the pair closes above the 1.0917 level, such signs will appear, as the peak from August 17 will be broken.
There was no news background today, and it was absent on Friday. This can explain why the price has been trading between 1.0864 and 1.0917 for almost three days. Traders' activity is not high, but there is no news, so everything is logical. The market is waiting for relatively important events, speeches, and reports. There will be few such events this week, and if we remember that only some events or reports trigger emotions among traders, we can assume that this week will be no more exciting than the previous one. Today and tomorrow, I advise closely watching the 1.0917 level, as the fate of the European currency for this week depends on it.
On the 4-hour chart, the pair has consolidated below the ascending trend line and made two rebounds from the Fibonacci level of 38.2% (1.1032), which allows it to continue the decline process. On Friday, the CCI indicator formed a bullish divergence, and today, a bearish divergence is already brewing in the same CCI. Thus, the euro's growth towards the 50.0% level may be very short-lived. A rebound from this level will allow traders to expect a resumption of the decline toward the corrective level of 76.4% (1.0790).
Commitments of Traders (COT) Report:
During the last reporting week, speculators closed 12,026 long contracts and opened 10,225 short contracts. The sentiment of large traders remains bullish but has significantly weakened over the past week. The total number of long contracts concentrated in the hands of speculators now stands at 228 thousand, while short contracts amount to 78 thousand. The bullish sentiment persists, but the situation will shift in the opposite direction soon. The high number of open long contracts suggests that buyers may continue to close them soon – there is currently a significant bias towards bulls. The current figures allow for continuing the euro's decline in the coming weeks. The ECB increasingly signals the imminent end of the Quantitative Easing (QE) tightening procedure.
News Calendar for the US and European Union:
On August 21, the economic events calendar contains no interesting entries. The influence of the news background on the mood of traders during the day will be absent.
EUR/USD forecast and tips for traders:
New sales are recommended on a bounce from the 1.0917 level on the hourly chart with a target of 1.0864. I advised purchases on a rebound from 1.0864 with a target of 1.0917. This goal has been reached; new purchases are advised on a close above 1.0917 with a target of 1.0984.
