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EUR/USD – 1H.
On August 26, the EUR/USD pair fell to the corrective level of 76.4% (1.1771), rebounded from it, turned in favor of the European currency and returned to the Fibo level of 50.0% (1.1838). Thus, the situation has not changed over the past trading day. The rebound from the Fibo level of 50.0% will work in favor of the US currency and resume the fall towards the level of 76.4%, and closing the pair's rate above 1.1838 will increase the chances of continued growth of the pair. Meanwhile, it's time for Thursday, when Federal Reserve Chairman Jerome Powell is scheduled to speak at the international economic symposium in Jackson Hole. Traders have been waiting for this event since the beginning of the week, however, this event may turn out to be nothing. I believe that the head of the Fed is unlikely to make statements at the economic forum about changes in US monetary policy. Moreover, what exactly can Powell tell you? Many believe that Powell should declare his refusal to raise rates indefinitely. However, at this time, in any case, there is no question of raising rates. What's the difference? Many expect that Powell will talk about targeting inflation and allow this indicator to go above 2% without raising rates. However, first, you need to go back to these two percentages. At the moment, inflation is only 1% y/y.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed a reversal in favor of the US currency and generally continued the process of falling in the direction of the corrective level of 127.2% (1.1729). Although in general, the quotes have been moving mostly sideways for the last few days. A rebound of the pair's exchange rate from the level of 127.2% will work in favor of the EU currency and some growth in the direction of the corrective level of 161.8% (1.2027). The rebound of quotes can be made from the rising trend line. Closing quotes below the trend line will significantly increase the chances of a further fall in the direction of the next corrective level of 100.0% (1.1496).
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed another reversal and anchored under the corrective level of 261.8% (1.1825). However, this level is not strong and I recommend paying more attention to the upward trend corridor, within which trading continues.
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. At the same time, the breakdown may be false. In this case, the drop in quotes will be resumed.
Overview of fundamentals:
On August 26, the US released a report on orders for long-term goods. Despite the fact that this report was significantly better than traders' expectations, the US dollar still fell in the afternoon.
News calendar for the United States and the European Union:
US - number of primary and secondary applications for unemployment benefits (12:30 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (13:10 GMT).
On August 27, the EU calendar is empty, and in America, there will be a speech by Fed Chairman Jerome Powell, which is recommended to pay attention to.
COT (Commitments of Traders) report:
The last COT report was very boring. Major market players in total (for all groups) increased short-contracts during the reporting week. Nevertheless, the most interesting group of "Non-commercial" was engaged in reducing the number of long and short contracts on their hands. Speculators got rid of 4,500 contracts, thus, we can say that their mood has not changed at all during the reporting week. They still have 4 times more long contracts than short contracts on their hands, so in general, we can't say that their mood has become a bit more bearish. Moreover, since July 7, speculators have only been increasing longs or reducing shorts. Thus, I cannot conclude that this week the pair's quotes may fall based on the COT report.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro currency with the goals of 1.1771-1.1711, as a new rebound from the Fibo level of 50.0% (1.1838) was made on the hourly chart. I recommend buying a pair with the goals of 1.1869 and 1.1906 if the quotes close above the level of 1.1838.
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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