EUR/USD – 1H.
The EUR/USD pair moved exclusively horizontally yesterday, along the corrective level of 76.4% (1.1837). And tonight, it managed to start a very weak drop in quotes in the direction of the level of 1.1772. A little earlier, the pair performed a close under an upward trend corridor, so now the fall in quotes may continue for some time. I want to write in this place that it may be as weak as the pair's growth in the last couple of weeks. However, the European Union will release today the report that many have been waiting for since the very beginning of this week. Therefore, in the second half of the day, traders can start trading the pair more actively than during the current week. Thus, today, everything will depend on the Nonfarm Payrolls report. Let me remind you that earlier this week, the ADP report was released, reflecting the state of the labor market in the United States, which is now the main goal of the Fed.
However, the ADP report was much weaker than traders' expectations. Given that traders' expectations are very high for Nonfarm, I believe that today the real figures will be lower. From this point of view, the growth of the pair's quotes should resume today. However, the real numbers may almost coincide with the forecast of 895,000. Then the US currency can still get the support of traders, and the pair can continue to fall following the latest graphical signals. In any case, the Nonfarm Payrolls report will determine a lot for the dollar today. After all, the Fed is already literally laying down any possible changes in monetary policy based on the pace of recovery of the labor market. It depends on the pace at which the labor market will recover by the end of this year when it will be announced that the quantitative stimulus program will be curtailed. And without this step on the part of the Fed, it will be extremely difficult to expect a new growth of the US currency. While the US currency is still in the growth process, which is visible on the 4-hour chart, it is not very strong and not too stable.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a rebound from the corrective level of 61.8% (1.1890). As a result, a reversal was made in favor of the US dollar, and a fall began toward the corrective level of 76.4% (1.1782). The rebound of the pair's exchange rate from this level will allow us to count on a reversal in favor of the European and a resumption of growth in the direction of the level of 1.1890. Closing quotes below the level of 76.4% will increase the chances of continuing the fall in the direction of the next Fibo level of 100.0% (1.1606). There are no emerging divergences in any indicator today.
News calendar for the United States and the European Union:
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12-30 UTC).
US - change in the average hourly wage (12:30 UTC).
On August 6, the calendar of economic events in the European Union does not contain a single interesting entry, and three very important reports will be released in the United States at once. Thus, the information background will be very strong today, especially in the second half of the day. Strong movements of the pair are possible. At the same time, the reaction of traders can follow only one report – Nonfarm Payrolls.
COT (Commitments of Traders) report:
The latest COT report showed that during the last reporting week, the mood of the "Non-commercial" category of traders again became more "bearish." Major players opened 1,775 short contracts on the euro and closed 5,665 long contracts. Thus, in the last six weeks, the number of short contracts focused on the hands of speculators has increased by almost 70 thousand, and the number of long contracts has decreased by 11. Therefore, a further fall in the European currency is very likely, according to COT reports. However, over the past week, the euro/dollar pair has not been able to continue the decline in quotes and, on the contrary, has begun the growth process.
EUR/USD forecast and recommendations for traders:
Today, I recommend new purchases of the pair with targets of 1.1837 and 1.1919 on the hourly chart if the quotes perform a rebound from the level of 1.1772 (or 1.1760). For sales, I recommended waiting for a more confident closing under the ascending corridor and the level of 76.4% on the hourly chart with targets of 1.1772 and 1.1704. Now, this condition is met, but you should trade very carefully today in the afternoon, as reversals and movements in the opposite direction are possible.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.