Relevance up to 08:00 2022-07-26 UTC–4
On Monday, the EUR/USD pair made a new growth in the direction of the 1.0315 level, which has not yet ended with working out this level, like all previous attempts. The last five days’ movement should be considered a single whole. The pair failed to continue its growth last week, then started a new decline, and we see the same thing this week. It is already quite possible to talk about a side corridor since the euro cannot move far from the corrective level of 261.8% (1.0196). From my point of view, this is a rather strange behavior of traders. Periods of lateral movement certainly occur from time to time, but now is not the right time for this. The information background is also quite strong and interesting. Why did traders decide to stop trading right now? After all, let me remind you that the ECB meeting was held last week, the Fed meeting is scheduled for this week, and the Bank of England meeting is scheduled for next week.
In addition, inflation reports have recently been released, which have puzzled everyone who follows them a lot. In general, now is the time to actively trade and promote the pair either up or even deeper down. But instead, we see an incomprehensible movement that has been going on for a week. I also want to note that the European currency had reasons to show growth last week. I am talking about the same ECB meeting at which it was decided to raise the rate by 0.50% for the first time in 11 years. Isn’t this a reason to finally invest in the EU currency? And if not, then what is the reason? If, even after a serious tightening of monetary policy in the European Union, the euro currency is not growing, then it is unlikely that anything will help it, except for the traders themselves, who may just get tired of buying only the dollar sooner or later. One way or another, we are waiting for another exciting week. There will be no news and reports on Monday, and the Fed meeting will begin tomorrow and end on Wednesday evening.
On the 4-hour chart, the pair held the corrective level of 127.2% (1.0173). Thus, it retains the chances of growth in the direction of the upper line of the descending trend corridor. Although the pace has been showing recently, the line itself is likely to fall to euro quotes. Fixing the pair’s exchange rate below the level of 1.0173 will still work in favor of the dollar and resume falling at 161.8% (0.9581). Emerging divergences are not observed in any indicator today.
Commitments of Traders (COT) Report:
Last reporting week, speculators closed 1,365 long contracts and opened 16,136 short contracts. It means that the “bearish” mood of the major players has intensified again. The total number of long contracts concentrated in the hands of speculators now amounts to 238 thousand, and short contracts – 195 thousand. The difference between these figures is still not too big, but it remains not in favor of the bulls. In the last few weeks, the chances of a rise in the euro currency have been gradually growing, but recent COT reports have shown that new sales may now follow, as the mood of speculators has changed from “bullish” to “bearish,” and it is intensifying. Thus, it is still difficult for me to count on strong growth of the euro currency.
News calendar for the USA and the European Union:
On July 25, the calendars of economic events of the European Union and the United States are empty. The influence of the information background on the mood of traders today will be absent.
EUR/USD forecast and recommendations to traders:
I recommend new sales of the pair when closing below the level of 1.0173 on a 4-hour chart with targets of 1.0080 and 0.9963. I recommend buying the euro currency when anchoring above the corridor on a 4-hour chart with a target of 1.0638.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.