EUR/USD – 1H.
The EUR/USD pair has been continuing the growth process for almost two weeks. However, during this time, it was able to grow by 150 points. The movement is very weak, and traders refuse to trade the currency pair. Sometimes this happens due to the complete lack of information background, but often the information background does not force traders to conduct active trading. As a result, the pair retains the probability of growth in the direction of the corrective level of 61.8% (1.1919). The upward trend corridor keeps the current mood of traders "bullish." But once again, the movement is very weak now. Thus, we can only hope that the pair and traders will be disturbed by any important reports or other events. Yesterday, the information background was empty. However, today, there will be a couple of reports that should attract the attention of players. First of all, I'm talking about the ADP report, which is the second most important report on the state of the labor market in the United States.
The ADP report shows how the number of employees in the US private sector has changed. A reaction of traders does not always follow it, but it can cause it. And this Friday, the Nonfarm Payrolls report will be released, which is the most important. Let me remind you that Fed Chairman Jerome Powell made it clear that the priority is the full recovery of the labor market and full employment of the American population. The assistance program to the economy will remain in effect until the labor market returns to its pre-crisis levels. Therefore, now the most important reports are the state of the labor market. And if the ADP or Nonfarm report turns out to be weaker than forecasts, it will be an excellent help for the European currency to continue the growth process and strengthen it. If the reports of ADP and Nonfarm do not disappoint traders, then the US currency can already move to growth. Given that there is an upward corridor on the hourly chart, and the quotes left the descending one on the 4-hour chart, I believe more in the further growth of the euro/dollar pair.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed an increase to the corrective level of 61.8% (1.1890) and a very weak rebound from it. However, a new drop in quotes in the direction of the Fibo level of 76.4% (1.1782) has not yet begun. Fixing the pair's exchange rate above the level of 61.8% will work in favor of the EU currency and the resumption of growth in the direction of the next corrective level of 50.0% (1.1978). The movements of the pair remain very weak. There are no emerging divergences observed in any indicator.
News calendar for the United States and the European Union:
EU - index of business activity in the services sector (08:00 UTC).
EU - change in retail trade volume (09:00 UTC).
US - change in the number of employees from ADP (12:15 UTC).
US - PMI index for the service sector (13:45 UTC).
US - ISM Index of business activity in the service sector (14:00 UTC).
On August 4, the calendars of economic events in the European Union and America contain several interesting entries each. The ADP report should do this if the business activity indices are likely to arouse no interest among traders. The ISM index for the non-manufacturing sector in the United States is also important.
COT (Commitments of Traders) report:
The latest COT report showed that during the last reporting week, the mood of the "Non-commercial" category of traders again became more "bearish." Major players opened 1,775 short contracts on the euro and closed 5,665 long contracts. Thus, in the last six weeks, the number of short contracts focused on the hands of speculators has increased by almost 70 thousand, and the number of long contracts has decreased by 11. Therefore, a further fall in the European currency is very likely, according to COT reports. However, over the past week, the euro/dollar pair has not continued the decline in quotes and has begun the growth process.
EUR/USD forecast and recommendations for traders:
Today, I recommend staying in the pair's purchases with a target of 1.1919 on the hourly chart. If there is a close above it, then purchases should be kept with a target of 1.1985. For sales, I recommend waiting for the quotes to rebound from the level of 1.1919 on the hourly chart or close below the level of 1.1837. The target is the nearest corrective level.
"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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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