The EUR/USD pair on Thursday and Friday continued to move horizontally along the corrective level of 100.0% (1.0637) after dropping to it. Several rebounds and fakeouts have kept the overall chart pattern the same. At the moment, quotes have dropped slightly below this level, but they have done so several times over the past two days. Therefore, I do not see any grounds for expecting further depreciation of the European currency. At the same time, there are no clear signals in either direction.
The waves continue to indicate a "bearish" trend. Nothing has changed on Thursday, Friday, and Monday, and no new waves have formed. Thus, there are no changes, and the last downward wave broke the previous low very dubiously. The euro may start strengthening from its current position. However, if you think about it, what's so special about this situation? We can only talk about a "bullish" trend after the level of 1.0735 is breached.
On Friday, business activity indices in Germany and the European Union disappointed again. Germany's manufacturing sector grew slightly but remained below 40. The EU's manufacturing sector continued to decline and now stands at 43.4. The situation in the services sector is slightly better but still very poor, as both indices are below 50. These data did not cause a significant drop in the European currency but did not help the euro grow even a little.
Today, the French Central Bank President, Villeroy de Galhau, stated that rates would remain at their current levels for a long time. Perhaps these words may have seemed "hawkish" to someone, but they mean that rates will no longer rise.
On the 4-hour chart, the pair experienced a new decline to the 100.0% Fibonacci level and continues to trade within the descending trend corridor. A rebound from the level of 1,0639 allowed for a slight rise, but I advise only counting on a significant strengthening of the euro once the price is firmly above the trend corridor. Closing below 1.0639 will increase the chances of further decline towards the 127.2% correction level at 1.0466. The RSI indicator has formed a "bullish" divergence but has not yielded any significant results yet.
Commitments of Traders (COT) Report:
On the last reporting week, speculators closed 4952 long contracts and opened 6147 short contracts. The sentiment of large traders remains "bullish" but has noticeably weakened in recent weeks and months. The total number of long contracts concentrated in the hands of speculators now stands at 207,000, while short contracts amount to 105,000. The difference is now only twofold. The situation will continue to change in favor of the bears over time. Bulls have dominated the market for too long, and now they need strong news flow to sustain the "bullish" trend. Such a background is absent. The high value of open Long contracts suggests that professional traders may continue to close them soon. The current figures allow for continuing the euro's decline in the coming months.
News Calendar for the United States and the European Union:
European Union - ECB President Lagarde will deliver a speech (13:00 UTC).
On September 25th, the economic events calendar contains only one entry. The impact of the news on trader sentiment today may be relatively weak.
Forecast for EUR/USD and Trader Recommendations:
Sales of the pair are possible today, but I hesitate to advise anything specific regarding signals since the level of 1.0637 does not confirm them. Buying could have been done on a rebound from the 1.0637 level on the hourly chart with targets at 1.0697 and 1.0735, but as we can see, there has been no significant growth after the previous rebounds.