FX.co ★ Forecast for EUR/USD on September 30 (COT report). Traders believe in curtailing QE in the US much more than in the EU

EUR/USD – 1H.

The EUR/USD pair continues the process of falling after consolidating under the corrective level of 100.0% (1.1704). Yesterday, the quotes also performed a close under the level of 1.1629, which increases the probability of continuing to fall in the direction of the next Fibo level of 127.2% (1.1552). Meanwhile, new performances by Christine Lagarde and Jerome Powell took place yesterday. Within the framework of the economic forum organized by the ECB. There was even less information for traders this time. Let me remind you that since the beginning of the week, Powell and Lagarde have been speaking at various events almost every day, but not once have their statements caused a strong reaction from traders. Although it is really hard to believe since yesterday, for example, the quotes of the European currency fell quite a lot, and one could assume that Powell or Lagarde is "to blame" for this. But no, the fall in the euro quotes began in the first half of the day, and the heads of the Fed and the ECB spoke already in the second.

There were no economic reports yesterday either. Therefore, it isn't easy to explain now why the dollar has been growing very slowly for almost a month and why the euro currency collapsed yesterday. One of the most likely reasons for the euro's fall is the high probability that the Fed will begin to reduce the quantitative stimulus program this year. But, from my point of view, this is a double-edged sword since the European Union will also complete the QE program. It's just that in the USA, it will begin to be gradually reduced until it is fully completed in mid-2022, and in the European Union - the PEPP program is due to end in March 2022. The volume of asset purchases from the open market has already begun to decrease.

Nevertheless, as Christine Lagarde has already said, PEPP may be replaced by another incentive program or expand the APP. But one way or another, the Fed is now receiving more serious signals about its readiness to curtail QE. Perhaps that is why the US currency continues to grow.

EUR/USD – 4H.

On the 4-hour chart, the pair's quotes performed a drop to the corrective level of 100.0% (1.1606). The pair's rebound from this level will work in favor of the EU currency and some growth in the direction of the corrective level of 76.4% (1.1782). Fixing quotes below the level of 100.0% will increase the chances of a further fall in the direction of the next Fibo level of 127.2% (1.1404). The new downward trend corridor characterizes the mood of traders as "bearish."

News calendar for the USA and the European Union:

US - change in GDP volume for the quarter (12:30 UTC).

US - number of initial and repeated applications for unemployment benefits (12:30 UTC).

US - Chairman of the Fed Board of Governors Jerome Powell will deliver a speech (15:45 UTC).

US - Finance Minister Janet Yellen will deliver a speech (14:00 UTC).

On September 30, the calendar of economic events of the European Union does not contain any interesting entries, and the US calendar contains regular speeches by Powell and Yellen. However, it seems that the GDP report may cause a much stronger reaction from traders. In general, the information background will be weak today.

COT (Commitments of Traders) report:

The latest COT report showed that the mood of the "Non-commercial" category of traders changed very seriously during the reporting week. Speculators have opened 550 long contracts on the euro and 18,550 short contracts. Thus, the total number of long contracts in the hands of speculators has grown to 188 thousand, and the total number of short contracts - to 178 thousand. Over the past few months, the "Non-commercial" category of traders has been actively getting rid of long contracts on the euro and increasing short. This process continues even now. However, at the same time, the euro showed a very weak drop over this period. Thus, the euro again gets a good chance of continuing to fall, but bear traders are still not actively trading the European currency.

EUR/USD forecast and recommendations to traders:

I recommend new pair purchases when rebounding from the level of 100.0% (1.1606) on a 4-hour chart with targets of 1.1629 and 1.1704. I recommended selling if there is a close below the level of 1.1704 on the hourly chart, with the target level of 1.1629. I recommend new sales when closing quotes below the level of 1.1606 on a 4-hour chart with targets of 1.1552 and 1.1450.

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 to make speculative profits 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.