EUR/USD – 1H.
The EUR/USD pair performed a new reversal in favor of the US currency on Thursday and fell below the corrective level of 76.4% (1.1837) on the hourly chart. Thus, the fall of quotes can be continued in the direction of the level of 1.1772. However, in recent days, the euro/dollar pair has been changing the direction of movement almost every day while remaining in a relatively narrow side corridor. It is not a classic side corridor between the borders of which the course moves. Thus, it is not possible to receive signals on rebounds from the borders now. The information background of yesterday was relatively weak. There was no single important event in the European Union and the United States - only not the most important reports and events. There was a speech by Jerome Powell in the US Congress. However, this was his second speech in two days, which completely duplicated the first.
Thus, traders did not learn anything new from it. The Philadelphia Fed's manufacturing index fell to 21.9 points in July. The number of primary applications for unemployment benefits amounted to 360 thousand, secondary - 3241 thousand. Industrial production increased by 0.4% in June. The values of all these indicators almost coincided with the expectations of traders. Therefore, there was no reaction to them. Traders remain in a rather stalemate situation when they do not understand what to do with the pair next?
On the one hand, the US dollar may now start a new fall since Jerome Powell did not give any "hawkish" signals, and inflation in America continues to accelerate.
On the other hand, the situation in the European Union is no better. Inflation is also growing, and the ECB is not even thinking about curtailing the PEPP and QE programs in 2021. And the recovery of the European economy is proceeding at a much slower pace.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new fall to the corrective level of 76.4% (1.1782). A new rebound of the pair's exchange rate from this level will again work in favor of the EU currency and some growth in the direction of the corrective level of 61.8% (1.1890). Closing quotes below the level of 76.4% will work in favor of a further fall in the direction of the next corrective level of 100.0% (1.1606). There are no emerging divergences in any indicator today.
Overview of fundamentals:
On July 15, several reports were published in America, which traders did not even pay attention to. They also ignored the second speech of Jerome Powell in Congress. Thus, the information background was practically absent yesterday.
News calendar for the United States and the European Union:
EU - consumer price index (09:00 UTC).
US - change in retail trade volume (12:30 UTC).
US - consumer sentiment index from the University of Michigan (14:00 UTC).
On July 16, a fairly important inflation report will be released in the European Union, and an equally important report on retail trade will be released in the United States. Both can arouse the interest of traders and the reaction of the pair.
COT (Commitments of Traders) report:
The latest COT report showed that during the last reporting week, the mood of the "Non-commercial" category of traders again became more "bearish." Major players have opened 3,871 long contracts on the euro but also opened 16,472 short contracts. Thus, in the last three weeks, the number of short contracts focused on the hands of speculators has increased by 44 thousand, and the number of long contracts has decreased by 1 thousand. Therefore, a further fall in the European currency is very likely. At the same time, the general mood of speculators remains "bullish" since there are one and a half times more long contracts on their hands.
EUR/USD forecast and recommendations for traders:
Yesterday, I recommended selling the pair with a target of 1.1772 if the closing is made on the hourly chart under the level of 1.1837. Today, these transactions should be kept open. I recommend buying the pair when it rebounds from the level of 1.1772 on the hourly chart with the target of 1.1837.
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.
