EUR/USD – 1H.
The EUR/USD pair performed a new reversal in favor of the European currency on Wednesday and began a new growth with a close above the corrective level of 76.4% (1.1837). Thus, the growth process can be continued toward the next Fibo level of 61.8% (1.1919), and the ascending trend line still characterizes the mood of traders as "bullish." Fixing the quotes below the level of 76.4% will allow us to expect the pair to fall in the direction of the trend line. The information background of the environment was very interesting, even despite the fact that most of the economic data were ignored by traders. On the other hand, many reports did not cause any desire to trade actively. For example, the morning PMI report in the European Union: its value for August was 61.4 points, and the previous value was 61.5. The change is minimal. The unemployment rate in the European Union fell from 7.8% to 7.6%. However, this report rarely provokes a reaction from traders. American reports turned out to be more interesting for traders.
After it became known about the 374,000 increase in the number of employees from ADP, the US currency rushed down (and the euro/dollar pair up), as traders expected a twice higher value. It should be clarified that the ADP report is a kind of harbinger of the Nonfarm Payrolls report. And if the ADP report is weak, it always makes you worry that the Nonfarm report will also be weak, although they do not always correlate. The US dollar was slightly supported by the ISM index for the manufacturing sector in the US, which instead of falling to 58.5 points, rose to 59.9 points. Thus, now traders prefer not too strong purchases of the euro currency, and economic statistics from time to time support these initiatives. Today, the trend may continue since there is practically no information background. Traders will now look forward to the Nonfarm report, as a lot depends on it. In particular, the Fed's monetary policy and the timing of completing the quantitative stimulus program.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed above the corrective level of 76.4% (1.1782). After forming a bearish divergence, the CCI indicator made a reversal in favor of the US currency and a slight drop. However, the growth process has already resumed at the Fibo level of 61.8% (1.1890). The rebound of quotes from the level of 61.8% will allow us to count on a reversal in favor of the US dollar and a new fall in the direction of the corrective level of 76.4% (1.1782). There are no emerging divergences in any indicator today.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (12:30 UTC).
US - foreign trade balance (12:30 UTC).
US - FOMC member Rafael Bostic will deliver a speech (17:00 UTC).
On September 2, the calendar of economic events in the European Union is empty. There will be some interesting reports in the US. However, it is unlikely that traders will show much interest in foreign trade reports or unemployment benefits applications. Therefore, the most important event of the day may be the performance of Raphael Bostic in the evening.
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 much more "bearish." Major players closed 39,475 long contracts for the euro currency and 7,201 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 194 thousand and, for the first time in a long time, fell below 200 thousand. Such a strong reduction in long contracts indicates that the euro currency is still under pressure from traders. However, at the same time, I draw attention to the fact that the fall of the European currency in the long term remains extremely weak. And in the last week, the euro currency has been growing in a pair with the US dollar.
EUR/USD forecast and recommendations for traders:
Today, I recommend buying the pair with a target of 1.1919 on the hourly chart since the closing was made above the level of 1.1837. I recommend selling if there is a close below the level of 1.1837 on the hourly chart, with the target of a trend line.
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.
