FX.co ★ Forecast for EUR/USD on August 31 (COT report). Traders are waiting for strong inflation in the EU and are ready to continue buying the euro

EUR/USD – 1H.

The EUR/USD pair was trading mostly without a specific direction on Monday. For most of the day, a downward mood prevailed among traders. However, the pair could not significantly fall for the whole day. I believe that yesterday there was a typical Monday movement in a narrow side corridor. However, today, the quotes performed a reversal in favor of the EU currency and resumed the growth process toward the corrective level of 76.4% (1.1837). The rebound of the pair's exchange rate from this level will allow traders to count on a reversal in favor of the US currency and a slight fall in the level of 1.1772. Closing the pair's exchange rate above the level of 76.4% will increase the probability of further growth in the direction of the next corrective level of 61.8% (1.1919). On Monday, the information background was extremely weak. The indicator of consumer confidence in the EU and the change in the volume of pending home sales in the United States. That's all that traders could consider yesterday.

And given the way the euro/dollar pair was trading yesterday, it is obvious that there was no reaction to these reports. Today, the information picture should be more cheerful. In the European Union, the consumer price index for August will be released in a few hours, immediately growing to 2.7% y/y. Thus, the European currency may receive tangible support from traders in the first half of the day. There will also be some interesting reports in the second half, but already in the USA. For example, the Chicago PMI index or the consumer confidence indicator. Under certain conditions, these reports can also affect the movement of the euro/dollar pair. However, I do not expect overactive movements today. The reports are still not the most important, and in recent months, traders have shown their low interest in active trading.

EUR/USD – 4H.

On the 4-hour chart, the pair's quotes closed above the corrective level of 76.4% (1.1782). Thus, the growth process may continue toward the next corrective level of 61.8% (1.1890). There are no emerging divergences in any indicator today. Closing the pair's quotes at 76.4% will work in favor of the US currency and the beginning of a fall in the direction of the Fibo level of 100.0% (1.1606).

News calendar for the United States and the European Union:

EU - consumer price index (09:00 UTC).

US - Chicago PMI index (13:45 UTC).

US - indicator of consumer confidence (14:00 UTC).

On August 31, the European Union will release an inflation report, the most important report of the day. American reports have much less significance, so traders can safely ignore them.

COT (Commitments of Traders) report:

The latest COT report showed that the mood of the "Non-commercial" category of traders during the reporting week became much more "bearish." Major players closed 39,475 long contracts for the euro currency and 7,201 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 194 thousand and, for the first time in a long time, fell below 200 thousand. Such a strong reduction in long contracts indicates that the euro currency is still under pressure from traders. However, at the same time, I draw attention to the fact that the fall of the European currency in the long term remains extremely weak. And in the last week, the euro currency has been growing in pair with the US dollar.

EUR/USD forecast and recommendations for traders:

Today, I recommend new purchases of the pair with a target of 1.1919 on the hourly chart if a close is made above the level of 76.4% (1.1837). I recommend selling if there is a rebound from the level of 1.1837 on the hourly chart, with a target of 1.1772.

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.