EUR/USD – 1H.
On September 21, the EUR/USD pair was trading very actively and it fell to the corrective level of 100.0% (1.1762) at the end of the day. Thus, the pair performed a fall approximately to the lower border of the side corridor, which is more clearly visible on the 4-hour chart. Near this border, a reversal in favor of the EU currency can be made and the growth process can begin in the direction of the levels of 61.8% and 50.0%. Today in America, an important speech is planned by Fed Chairman Jerome Powell before the US Congress. Treasury Secretary Steven Mnuchin will also speak today. Both economists are expected to present reports on the results of the CARES package, which was approved back in March this year, as a means to combat the economic consequences of the COVID-2019 pandemic. In total, Congress then allocated about $ 4 trillion, and at the moment, according to various estimates, about 2.2 trillion has been spent. It is these expenses that Mnuchin and Powell will have to report on, as well as draw conclusions about how effectively the money was spent and what results were achieved. Also, the topic of the new economic aid package, which was never agreed upon by Democrats and Republicans, as well as issues of monetary policy and the continuing negative impact on the economy of the coronavirus pandemic, will probably be touched upon.
EUR/USD – 4H.
On the 4-hour chart, the EUR/USD pair quotes fell to the corrective level of 127.2% (1.1729), which is very close to the lower border of the side corridor. Thus, a rebound from this level or this border will allow traders to count on a reversal in favor of the European currency and some growth in the direction of the upper border of the side corridor. Closing the pair's exchange rate under the side corridor will increase the probability of a further fall in the direction of the Fibo level of 100.0% (1.1496).
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed another reversal in favor of the US dollar and anchored under the corrective level of 261.8% (1.1825), which does not mean anything, because the quotes continue to remain in the blue rectangle, which perfectly reflects the current flat. The pair's quotes are fixed under the upward trend corridor, which slightly increases the probability of continuing the fall. But the key remains the side corridor.
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 18, the European Union and America did not have a single important report or other events. Thus, the information background was not available on this day.
News calendar for the United States and the European Union:
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (14:30 GMT).
On September 22, the calendars of economic events in America and the European Union do not contain any economic reports. Just one speech by Jerome Powell to Congress, which can be extremely important.
COT (Commitments of Traders) report:
The latest COT report was very interesting. During the reporting week, the "Non-commercial" group got rid of 17 thousand long contracts and only 1.7 thousand short ones. Thus, the mood of major speculators began to change to "bearish". The total number of long contracts focused on the hands of speculators is 231,000 against 52,000 short contracts. Thus, the advantage is still with the bulls, however, it is beginning to decrease. Over the past three weeks, the "Non-commercial" group has closed almost 30,000 long contracts, which significantly increases the probability of a fall in the European currency in the near future. However, the number of short contracts has also decreased in the last two months - from 80 thousand to 50 thousand. Thus, the euro may start the process of falling, however, it is unlikely to be strong.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1496, if the closing is performed under the side corridor on the 4-hour chart. I recommend buying the pair if there is a rebound from the level of 127.2% (1.1729) or from the lower border of the side corridor on the 4-hour chart with the goal of 1.1908.
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.