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EUR/USD – 1H.
On September 28, the EUR/USD pair performed a reversal in favor of the EU currency and began the growth process in the direction of the corrective level of 127.2% (1.1695). The rebound of quotes from this level will work in favor of the US currency and the resumption of the fall in the direction of the corrective level of 161.8% (1.1608). Fixing the pair's rate above the level of 127.2% will increase the chances of continuing growth towards the level of 100.0% (1.1762). The second wave of COVID-2019 has started in Europe. This was stated recently by Health Commissioner Stella Kyriakides. "Since there are more cases in some EU member states than at the peak of the pandemic in March, it is clear that this crisis has not passed," the European Commissioner said. She called on all EU states to be prepared for new outbreaks and immediately take appropriate measures. "Now is the crucial moment. We must use the tools we have. This may be our last chance to prevent a repeat of last spring," Kyriakides said. If this is not done, the European Commissioner believes that a second "lockdown" will have to be introduced. This is a big problem for the European Union. In recent months, traders have somehow calmed down about the coronavirus in Europe, as the first wave was stopped. There were hopes that the second wave would bypass the European Union. However, everything in this world is interconnected. With the arrival of autumn, almost all over the world began to see an increase in cases of the disease, and Europe was no exception.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair were fixed under the side corridor, which allows traders to continue counting on a further fall in the direction of the corrective level of 100.0% (1.1496). Today, the divergence is not observed in any indicator. However, at the moment, the quotes show growth, and only the level of 127.2% on the hourly chart can stop it.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes continue the process of falling in the direction of the Fibo level of 200.0% (1.1566). A rebound of the pair's rate from this level will work in favor of the euro and the beginning of growth in the direction of the corrective level of 261.8% (1.1825).
EUR/USD – Weekly
On the weekly chart, the EUR/USD pair has consolidated 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 28, there was no news in the European Union or the United States.
News calendar for the United States and the European Union:
Germany - consumer price index (12:00 GMT).
US - consumer confidence indicator (14:00 GMT).
On September 29, the calendar of economic events contains only inflation in Germany (not the most important indicator for the euro currency) and an indicator of consumer confidence in the United States (the same, only for the dollar).
COT (Commitments of Traders) report:
The latest COT report was again very interesting. A week earlier, it turned out that the "Non-Commercial" group was actively getting rid of long-term contracts for the euro currency. This week, the COT report showed that speculators were again actively increasing long-contracts for the euro. There were 15,499 of them open. This group of traders also opened short contracts in the amount of 5,890. A week earlier, I concluded that the mood of traders is changing in the direction of "bearish", however, the new COT report showed that it is again becoming "bullish". This means that the pair's fall may end in the near future. Moreover, speculators have five times more long contracts than short contracts in their hands. This means that professional traders are counting on the new growth of the European currency.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1608, if the quotes are rebounded from the level of 127.2% (1.1695) on the hourly chart. I recommend buying the pair today if it closes above the level of 127.2% (1.1695) with the target level of 100.0% (1.1762).
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 for 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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