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EUR/USD – 1H.
On September 2, the quotes of the EUR/USD pair performed a fall to the corrective level of 76.4% (1.1821) and resumed the process of falling with consolidation under the level of 76.4%. Thus, the process of falling quotes can be continued in the direction of the next corrective level of 100.0% (1.1762), and the mood of traders is now characterized as "bullish". The US dollar has finally started to show growth. Traders have been waiting for this for a long time, as the euro currency has been growing almost non-stop for more than 3 months. However, if you pay attention to the information background, there have been no such serious reasons for buying the US currency in the past few days. For example, yesterday, when the pair's quotes continued to fall, the ADP report was released in America, which is considered the second most important report after Nonfarm Payrolls, describing the state of the labor market. And this report showed a much weaker value than traders expected. Nevertheless, the US currency still continued to grow. We can also recall that the US economy is currently experiencing serious problems and may continue to experience them throughout 2020, as the coronavirus continues to rage in the country.
EUR/USD – 4H.
On the 4 hour chart quotes pair EUR/USD has also performed a reversal in favor of the US currency and started falling towards the upward trend line, which is still in force and continues to characterize the current mood of traders as bullish. Thus, the growth process can be resumed in the direction of the corrective level of 161.8% (1.2027), if the rebound from the trend line is performed. Closing the pair's exchange rate under the trend line will work in favor of the US currency and further fall of quotes in the direction of the Fibo level of 100.0% (1.1496).
EUR/USD – Daily.
On the daily chart of the EURUSD completed another reversal in favor of the US dollar and started falling towards the lower border of the rising trend of the corridor, the closure of which will allow expecting traders to further decline towards the next corrective level.
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 may be strong, but in the long term.
Overview of fundamentals:
On September 2, in America, the report on the change in the number of ADP employees was higher, which was significantly worse than traders expected. Nevertheless, the US currency still continued to grow on this day.
News calendar for the United States and the European Union:
EU - index of business activity in the service sector (08:00 GMT).
EU - change in retail trade volume (09:00 GMT).
US - number of primary and secondary applications for unemployment benefits (12:30 GMT).
US - ISM composite index for non-manufacturing (14:00 GMT).
On September 3, the EU calendar contains not the most important reports on business activity in the service sector and retail sales. In America – the ISM index is more important.
COT (Commitments of Traders) report:
The latest COT report was very revealing. According to the results of the reporting week, large traders of the "Non-commercial" group opened 1302 new long contracts and closed 11 thousand short contracts. Thus, their mood became even more "bullish". And the difference between the total volumes of long and short contracts focused on their hands has increased even more. Thus, the "bullish" mood of speculators has been growing continuously since June 20, which allows us to conclude that the upward trend for the euro/dollar pair continues. The "Commercial" group, which usually trades against the trend, opened 7 thousand short-contracts during the reporting week, and the total number of short-contracts for all groups of traders decreased by 7 thousand, and long-contracts – by a thousand.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro currency with targets of 1.1762-1.1695, as it was closed at the level of 76.4% on the hourly chart. I recommend a new purchase of the pair if there is a rebound from the trend line on the 4-hour chart with the goal of 1.1900.
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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