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EUR/USD – 1H.
Hello, traders! On July 22, the EUR/USD pair continued its growth process after another rebound from the upward trend line. I remind traders that we have two trend lines, both ascending. Thus, there is no doubt about the current mood among "traders". Moreover, I am increasingly convinced that the main reasons for the growth of the euro currency are discouraging events in America, and not the adoption of a seven-year budget plan at the European Summit or the approval of an economic recovery fund, according to which 5 countries will receive the lion's share of the funds, and everyone will pay interest and loans on this fund for many years. Today it also became known that the European Commission does not approve the agreed budget and is going to make adjustments to it. In particular, we are talking about the financing of certain programs, as well as the size of the budget itself, which the European Parliament considers insufficient. Thus, the process of negotiations between European leaders and the European Parliament will now begin, which will further delay the adoption of the budget. But in the US, things are much worse and you don't need to be a genius analyst to understand this. The epidemic continues to rage, the economy continues to shrink, and the political wars between Trump and the Democrats have already had enough. Especially at a time when the US government would need to work together to stop the pandemic and begin economic recovery.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair closed above the corrective level of 100.0% (1.1496), which allows traders to expect continued growth in the direction of the next Fibo level of 127.2% (1.1729). The upward trend line on the current chart also keeps the current mood of traders "bullish". Fixing the pair's exchange rate below the Fibo level of 100.0% will work in favor of the US currency and some fall in the direction of the trend line. Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed an increase to the Fibo level of 200.0% (1.1566). The pair's rebound from this level will work in favor of the US currency and begin to fall in the direction of the corrective level of 161.8% (1.1405). Closing above will allow us to expect a continuation of the growth process in the direction of 1.1825.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair, after rebounding from the lower line of the "narrowing triangle", performed an increase to the level of 1.1600, which I gave as a target a few months ago. Thus, the upper line of the "narrowing triangle" has been worked out, which now allows us to count on the rebound from it and the resumption of the fall. If the triangle is not closed.
Overview of fundamentals:
On July 22, the European Union and the United States did not have a single economic report. Christine Lagarde's speech referred to the deal reached by the EU countries, but did not contain important information that could affect the mood of traders.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On July 23, the US news calendar contains a single report on the number of applications for benefits. There is no news at all in the EU.
COT (Commitments of Traders) report:
The latest COT report showed a sharp increase in the number of long-term contracts in the hands of the "Non-commercial" group. This means that the most important major market players during the reporting week (July 8-14) looked only in the direction of purchases. Several thousand short contracts were also opened, but much less than long. Thus, it is not surprising that the euro currency grew all the previous week and continues to do so on the current one. The COT report tells us now about a persistent bullish trend, as for the second week in a row, speculators are actively increasing long-contracts. The results of the EU summit could make the "bullish" mood of speculators even stronger. The end of the current week shows that the mood of bull traders is only improving.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend continuing to stay in the pair's purchases with a target of 1.1729. If the pair closes at 1.1496, then purchases can be closed until new ones are formed. I recommend selling the pair if the quotes close below the trend line on the hourly chart with the goal of 1.1347.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
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