On Monday, the EUR/USD pair continued the process of falling, and by the end of the day, it secured under the corrective level of 323.6% (0.9963). Today also started with a fall in the direction of the 0.9782 level. The downward trend corridor continues to characterize the mood of traders as "bearish," and the pair's quotes are already falling faster than the corridor itself is declining. It suggests that the fall is not just strong but also intensifying. The paradox is that there was no information background on Monday. It was not there on Friday, and today there will be several reports, but they will be later, and the euro currency has already fallen by 40 points. Thus, traders do not intend to wait for important statistics or trade the pair only after receiving important information. The mood in the market is "bearish," which is quite enough for traders to continue selling the euro currency.
Is it worth it in such a situation to touch on the topic of the information background of this week at all? From my point of view, no. There won't be much important data this week, but even they are completely unnecessary for traders now. The fall of the euro currency may continue, despite any values of business activity indices in the European Union or the United States, which will be released today. Despite Friday's speech by Jerome Powell, who can help traders understand how much the rate will be raised in September. None of this matters now. Therefore, I recommend focusing now on graphical analysis. And there the picture is as follows: there is a descending corridor, so you need to sell. It will be possible to buy when bull traders gain a foothold over the descending corridor. Perhaps there is nothing more to say about the euro/dollar pair right now. Although there is another rather important point: when traders get rid of one of the currencies like this, it is very difficult to predict when this movement will end. I won't be surprised if the fall continues for quite some time.
On the 4-hour chart, the pair reversed in favor of the US currency and anchored under the corrective level of 127.2% (1.0173). The pair failed to consolidate over the descending trend corridor, so it continues to characterize the current mood of traders as "bearish." The process of falling can be continued in the direction of the Fibo level of 161.8% (0.9581). Emerging divergences are not observed in any indicator today, but they are meaningless now since the fall is non-stop.
Commitments of Traders (COT) Report:
Last reporting week, speculators closed 862 long contracts and opened 7,386 short contracts. It means that the "bearish" mood of the major players has intensified again. The total number of long contracts concentrated in the hands of speculators is now 199 thousand, and short contracts – 242 thousand. The difference between these figures is still not too big, but it remains not in favor of euro bulls. In the last few weeks, the chances of the euro currency's growth have been gradually growing, but recent COT reports have shown no strong strengthening of the bulls' positions. The euro currency has not shown convincing growth in the last five or six weeks. Thus, it is still difficult for me to count on the strong growth of the euro currency. So far, I am inclined to continue the fall of the euro/dollar pair.
News calendar for the USA and the European Union:
EU - index of business activity in the manufacturing sector (PMI) (08:00 UTC).
EU - index of business activity in the service sector (08:00 UTC).
US - index of business activity in the manufacturing sector (PMI) (13:45 UTC).
US - business activity index (PMI) in the service sector (13:45 UTC).
On August 23, the calendars of economic events of the European Union and the United States contain quite important records of business activity, but traders may not pay attention to them. The influence of the information background on the mood of traders will be extremely weak today.
EUR/USD forecast and recommendations to traders:
I recommended new sales of the pair with a target of 0.9581 when closing at 0.9963. The target can be adjusted – 0.9482. I recommend buying the euro currency when fixing quotes above the descending corridor on the 4-hour chart with a target of 1.0638.