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EUR/USD – 1H.
On October 7, the EUR/USD pair performed a rebound from the upward trend line, a reversal in favor of the European currency, and a slight increase above the corrective level of 38.2% (1.1765). Thus, the mood of the majority of traders remained bullish. Fixing the pair's rate under the trend line will work in favor of the US currency and resume falling in the direction of the Fibo level of 0.0% (1.1612). Meanwhile, the minutes of the last meeting of the monetary committee of the US Federal Reserve were released yesterday. Let me remind you that no important decisions were made at the last meeting, and the next few speeches by Fed Chairman Jerome Powell allowed us to form a clear picture of the central bank's worldview and its plans for the future. According to the minutes, members of the monetary committee agreed to keep rates at record lows until inflation exceeds 2% and the labor market reaches maximum employment levels. However, it should be noted that the Fed recently changed its approach to inflation and will now use the so-called "compensation approach". This means that the 2% level can be exceeded without revising monetary policy to compensate for periods when inflation was below 2%. It should also be noted that according to the Fed's forecasts, these goals are unlikely to be achieved before 2023-2024. Thus, the information was inherently useless.
EUR/USD – 4H.
On a 4-hour chart, the graphic picture remains very boring. The pair's quotes have returned to the side corridor and are now trading inside it. Yesterday, a rebound was made from the lower border of this corridor, which allows us to count on some growth of the pair in the direction of the upper border of the corridor. However, all the movement remains so sideways that I do not rule out a new fall to the lower border of the corridor.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a sharp reversal in favor of the EU currency and began the process of returning to the weak level of 261.8% (1.1825). However, a drop in prices still looks more likely. Fixing the pair's rate above the level of 261.8% will increase the probability of further growth towards the level of 323.6% (1.2084).
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 October 7, ECB President Christine Lagarde made another speech in the European Union, however, it did not tell traders anything interesting. There was no reaction to her speech. The same applies to the FOMC protocol.
News calendar for the United States and the European Union:
US - number of primary and secondary applications for unemployment benefits (12:30 GMT).
On October 8, there will be even less news in the European Union and America. Thus, the influence of the information background on traders today will be virtually absent.
COT (Commitments of Traders) report:
The last COT report was quite boring. During the reporting week, the "Non-commercial" category of traders got rid of both long and short contracts. And in approximately equal quantities. Thus, the mood of speculators remained the same. In general, all categories of traders also closed approximately the same number of long and short contracts. Thus, there were really few changes during the reporting week. In general, major traders still have about 5 times more long contracts than short. This means that speculators still believe that the European currency will continue to grow. But how long will their faith last?
Forecast for EUR/USD and recommendations for traders:
Today I recommend selling the euro currency with targets of 1.1707 and 1.1612, if the close is made under the trend line on the hourly chart. Purchases of the pair today are reasonable with the target of 1.1812, since a rebound was made from this trend line yesterday.
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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