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EUR/USD – 1H.
Hello, traders! The EUR/USD pair continued the growth process on July 24, and continues today. Since the opening of the currency market on Monday, the pair's quotes have crept up and by the morning had already increased by 70 points, despite the fact that, as you understand, no news was released at night. Nevertheless, the euro continues to show strong growth, and the reasons for this I can only name all the events that are unfolding now in America. As practice has shown, traders only paid lip service to the results of the EU summit, and all subsequent information concerning this summit, the seven-year budget and the economic recovery fund is simply ignored. The same applies to economic reports, which were several on Friday, but the reaction to them was not logical. Thus, it seems that the coronavirus epidemic remains the only factor that pushes the US currency down, and the euro and pound, respectively, up. The White House and Donald Trump personally need to urgently do something about the pandemic, otherwise the US currency and economy may continue to fall. According to experts, GDP losses in the second quarter will amount to 34-35%. These are huge numbers. The corresponding report will be released this week.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed an increase to the corrective level of 127.2% (1.1729). The rebound of the pair's quotes from this level will work in favor of the US currency and some fall in the direction of the corrective level of 100.0% (1.1496). The upcoming bearish divergence increases the probability of a rebound from the level of 127.2%. Closing the pair's rate above this level will increase the probability of further growth towards the next corrective level of 161.8% (1.2024).
EUR/USD – Daily.
On the daily chart, the EUR/USD pair made a consolidation above the Fibo level of 200.0% (1.1566). Thus, the probability of continuing the growth of quotes in the direction of the corrective level of 261.8% (1.1825) has significantly increased.
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. Otherwise, the growth process will continue.
Overview of fundamentals:
On July 24, the European Union and the United States released reports on business activity in the services and manufacturing sectors. All European data was strong and above market expectations, all American data fell short of forecasts. Thus, the continued growth of the euro currency in general corresponds to the information background.
News calendar for the United States and the European Union:
US - change in the volume of orders for long-term goods (12:30 GMT).
On July 27, the US will release one report - orders for durable goods, which is relatively important. However, it is not the report itself that will be important, but whether the forecasts correspond to real figures.
COT (Commitments of Traders) report:
The latest COT report, released on Friday, showed major changes in the mood of major market players. Changes that exceed or are close to 10,000 contracts are highlighted in green and red. As you can see, almost all the cells in the last report are colored green or red. Speculators (the "Non-commercial" group) actively increased long-contracts for the euro in the reporting week and at the same time got rid of short-contracts (-8100). Commercial players (the "Commercial" group) entered the market with both purchases and sales of euros. Thus, in total, more than 80,000 new contracts were opened by all groups of traders during the reporting week. The activity of traders in the euro has increased significantly, and the "bullish" mood has remained.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend buying a currency pair with a target of 1.2024, if a close above the level of 1.1729 is made. I recommend selling the pair if the quotes break off from the level of 1.1729 with the goal of 1.1496. But when selling, it should be understood that the trend remains "bullish". A strong fall in the euro is not expected yet.
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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