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EUR/USD – 1H.
Hello, traders! On August 14, the EUR/USD pair resumed the growth process towards the level of 1.1908, which is the peak for July 31 and August 6. I have built a new upward trend corridor that defines the current mood of traders as "bullish". At the same time, I doubt that the pair will be able to close above this level, since in recent weeks the quotes have always remained inside the 200-point-wide side corridor. There is very little news from America and the European Union that is not related to economic reports. If earlier traders regularly received information about the confrontation between China and the United States, about negotiations on a trade agreement between the two countries, on rallies and protests in the United States, on coronavirus, now there is nothing of this. A video conference between representatives of the US and China was supposed to take place over the weekend, but it was canceled. And in any case, it should not have been used to negotiate the second phase of the trade agreement. Also, according to the latest information (the US presidential election is approaching), Donald Trump is beginning to reduce the gap from Joe Biden. If the election were held right now, 46% of respondents would give their vote to the current US President and 50% to Joe Biden. That is, the difference is only 4%.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair, after rebounding from the corrective level of 127.2% (1.1729), continue the growth process in the direction of the upper border of the side corridor, which I have mapped on this chart for clarity of what is happening. Thus, the rebound from the upper border of the corridor may already work in favor of the US currency and resume falling in the direction of the same Fibo level of 127.2%, from which the quotes have already rebounded at least 5 times. Closing the pair's rate above the upper limit of the corridor will work in favor of continuing growth in the direction of the corrective level of 161.8% (1.2027).
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a new consolidation above the corrective level of 261.8% (1.1825), but this level is located inside the side corridor, which is represented as a rectangle on this chart. Thus, this signal is not strong and requires purchases of the pair.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation over the "narrowing triangle", which now allows us to count on further growth of the euro currency, which can be very strong and long-term.
Overview of fundamentals:
On August 14, Europe released an important report on Eurozone GDP in the second quarter - 12.1% q/q. This is exactly what traders expected. Retail trade in America grew by 1.2%, traders expected at least +1.9%, and industrial production increased by 3% (coinciding with the expectations of traders). Statistics were neutral on this day, and the euro currency again moved into growth.
News calendar for the United States and the European Union:
On August 17, the calendars of the European Union and the United States are empty, so there will be no information background today.
COT (Commitments of Traders) report:
The latest COT report was very eloquent. Large market players in total (for all groups) closed both long and short contracts during the reporting week. However, we are more interested in the "Non-commercial" group, which actively got rid of sales contracts and increased long. Thus, large speculators continued to favor the euro currency, while not favoring the US dollar. Thus, the fact that the euro currency continues to trade near its peaks should not be surprising. The largest traders who enter the market in order to make a profit continue to buy the euro currency.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend staying in purchases of the euro currency with the goal of 1.1908, as the next rebound from the level of 1.1729 was made. I recommend selling the pair with the target level of 1.1729 after fixing the price below the ascending corridor on the hourly chart.
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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