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EUR/USD – 1H.
On September 8, the EUR/USD pair continued to fall and ended it near the corrective level of 100.0% (1.1762). Thus, the rebound of quotes from this Fibo level will allow traders to count on a reversal in favor of the European currency and some growth in the direction of the corrective level of 76.4% (1.1821). Closing the pair's rate under the Fibo level of 100.0% (1.1762) will increase the chances of a further fall towards the level of 127.2% (1.1695). The central topic of the day at this time is the meeting of the European Central Bank, which has already begun, and the results will be summed up tomorrow. It is almost 100% clear that the ECB will not change the key rates (deposit and credit), since it has found no reason to lower them since the beginning of the epidemic around the world. Moreover, there is no reason to raise them at all since the economic crisis is in full swing and all the central banks of the world are now busy stimulating their economies. Thus, from the ECB meeting, traders are waiting for new information on the program to stimulate the economy during the coronavirus pandemic (PEPP). It was recently expanded by 600 billion euros when it became clear that the original 750 billion would not be enough to support the economy. Thus, a total of 1.35 trillion euros may also not be enough. In general, we are waiting for information about PEPP and Christine Lagarde's press conference.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair closed under the ascending trend line, which for a long time characterized the current mood of traders as "bullish". However, at this time, the pair's quotes continue to fall and they remain within the side corridor that is displayed on the chart. That is, based on this corridor, I expect the quotes to fall to the level of 1.1703, from which 5 rebounds were previously performed. The further fall of the pair's rate will depend entirely on the consolidation under the lower border of the side corridor.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed another reversal in favor of the US dollar and fell to the lower border of the upward trend corridor, closing under which will allow traders to count on the continuation of the fall in quotes in the direction of the corrective level of 200.0% (1.1566).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has completed a consolidation above 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 8, the European Union released an updated report on GDP for the second quarter, which showed a slight improvement in this important indicator. However, traders did not pay attention to this improvement and continued to sell the euro.
News calendar for the United States and the European Union:
On September 9, the calendar of economic events in America and the European Union are empty. Thus, the information background will not be available today.
COT (Commitments of Traders) report:
The latest COT report was very interesting and informative. At the end of the reporting week, major traders of the "Non-commercial" group closed 10,937 long contracts and opened 3,139 short contracts. This means that during the reporting week, "bearish" sentiment prevailed among speculators. But does this mean that the general mood of speculators has changed to "bearish" and now the euro currency will be actively sold off? The "Non-commercial" group still has 5 times more long contracts than short. Over the past 10 weeks, speculators have been building up long contracts and getting rid of short ones. Thus, so far, only one COT report suggests that the upward trend in the euro is complete. Nevertheless, this is a bad call for the euro currency.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1703, as it was closed under the trend line on the 4-hour chart. I recommend new purchases of the pair if there is a rebound from the lower border of the side corridor on the 4-hour chart of 1.1703 with targets of 1.1762-1.1821.
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 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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