EUR/USD – 1H.
Hello, traders! On July 15, the EUR/USD pair continued its growth process and performed a reversal in favor of the US currency towards the end of the day and began a weak process of falling. Traders are still waiting for two major events, both to happen in the European Union. The first is today's meeting of the European Central Bank. There is little hope that the Central Bank will again expand one of the programs to help the economy, since just at the last meeting, it has already made an extension of 600 billion euros of the PEPP program. Thus, it is unlikely. The same applies to interest rates. Since the beginning of the pandemic, while the Fed and many other central banks of the world have been actively lowering their rates, the ECB has left everything unchanged, since the loan rate is already 0%, and the deposit rate is completely negative -0.5%. Simply put, the depositor must pay an additional 0.5% per annum to the ECB for the deposit. Thus, I believe that there may be some interesting comments on the meeting, however, no important decisions will be made. The second is the EU summit, which starts on Friday and will decide the fate of the 750-billion recovery fund, which is badly needed by the EU economy. Positive comments after the ECB meeting and the decision on the fund at the EU summit can help the euro continue the growth process.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair made a consolidation above the level of 1.1347. Thus, the growth process can be continued towards the next Fibo level of 100.0% (1.1496). The pair's rebound from this corrective level will work in favor of the US currency and the beginning of a fall in the direction of the corrective level of 76.4% (1.1294) and the upward trend line, thanks to which the current mood of traders is characterized as "bullish".
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed an increase to the corrective level of 161.8% (1.1405). The pair's rebound from this Fibo level will allow traders to expect a reversal in favor of the US currency and the beginning of a fall in the direction of the corrective level of 127.2% (1.1261). Closing above it will increase the chances of continuing growth towards the next corrective level of 200.0% (1.1566).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair rebounded from the lower line of the "narrowing triangle", which still allows traders to expect growth in the direction of the 1.1600 level (the upper line of the "triangle"). Several charts allow for possible growth in the direction of 1.1500 (1.1600).
Overview of fundamentals:
On July 15, there were no interesting news or reports in the European Union. In America, the report on industrial production for May, which was slightly better than traders' expectations.
News calendar for the United States and the European Union:
EU - publication of the ECB's decision on the main interest rate (11:45 GMT).
EU - monetary policy report (11:45 GMT).
EU - ECB press conference (12:30 GMT).
US - change in retail trade volume (12:30 GMT).
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On July 16, the European Union will announce the ECB's decision on rates, as well as a report on monetary policy. The ECB will also hold a press conference. These events fall into the category of extremely important. In America, I recommend paying attention to the retail sales report.
COT (Commitments of Traders) report:
The latest COT report showed exactly the changes in the mood of traders that I expected to see. The first thing to note is the increase in long contracts by the "Non-commercial" group and a much smaller number of open short contracts. Thus, speculators in the reporting week looked in the direction of purchases of the British. However, the "Commercial" group on the contrary increased short-contracts, and in total the greater number belongs to short. However, the first group of traders is still more important. And the trend, if you look at the upper half of the illustration, is clearly "bullish". At the beginning of April, there were 161 thousand contracts in the hands of speculators, now – 186 thousand.
Forecast for EUR/USD and recommendations to traders:
Today, I recommend staying in purchases of the euro currency with the goal of 1.1496 until the quotes close under the second (small) trend line (which has a greater angle of inclination). I do not recommend rushing with sales of the pair yet. To do this, wait for the quotes to close below the main trend line on the hourly chart.
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.