On Thursday, the EUR/USD pair continued its growth after rebounding from the Fibonacci level of 50.0% (1.0864). At this point, the pair has risen to the corrective level of 61.8% (1.0917). A rebound in quotes from this level will favor the US dollar and a new decline towards 1.0864. Consolidating the pair above 1.0917 will increase the probability of continued growth toward the next Fibonacci level of 76.4% (1.0984).
The waves continue to tell us the same thing as before – a bearish trend. The low of the last wave is lower than the previous one, and the peak of the current wave has not yet broken the peak of the previous wave. Fixing the pair above 1.0917 will likely mean that this peak has been breached, but this has not happened yet. If it does, there will be the first sign of a trend change to a bullish one.
The current news background does not support either bulls or bears. For the simple reason that there are none. What can traders pay attention to today? Only the report on secondary housing market sales and the speeches of FOMC members Goolsbee, Bowman, and Barkin. These events should be enough for the pair to start trading more actively, but I don't think so. The report on the secondary housing market is not that important to traders, and in the case of FOMC members' speeches, it will all depend on what information comes to the market from them. There may be none.
Thus, traders can only rely on levels and waves now. If the first sign of a trend change to bullish appears, as I mentioned above, it will be possible to expect the European currency to grow. But it will be as weak as the decline in recent weeks.
On the 4-hour chart, the pair has consolidated below the ascending trendline and had two rebounds from the Fibonacci level of 38.2% (1.1032). Thus, I expected the European currency to fall to the corrective level of 61.8% (1.0882), and it happened. The pair has started the growth process at this point, but the looming bearish divergence in the CCI indicator warns that growth may be limited.
Commitments of Traders (COT) report:
During the last reporting week, speculators opened 4,418 long contracts and closed 5,634 short contracts. The sentiment of large traders remains bullish and is again starting to strengthen. The total number of long contracts speculators hold now stands at 232,000, and short contracts at 72,000. The bullish sentiment persists, but the situation will change in the opposite direction soon. The high value of open long contracts indicates that buyers may close them soon – there is a strong bias towards the bulls. I believe the current figures allow for continuing the euro's decline in the coming weeks. The ECB is increasingly signaling the imminent end of its monetary tightening procedure.
Economic news calendar for the US and the Eurozone:
US – Existing Home Sales (14:00 UTC).
On August 22nd, the economic events calendar contains only one entry, which could be more important. The impact of the news background on traders' sentiment throughout the day will be very weak.
EUR/USD forecast and trading advice:
New sales on the hourly chart can be expected at a rebound from the 1.0917 level, with a target at the 1.0864 level. Purchases were possible at a rebound from 1.0864 with a target of 1.0917. This target has been reached. Further purchases can be made upon closing above 1.0917 with a target of 1.0984.