EUR/USD 1H
The technical picture for the euro/dollar pair has not changed much on the hourly timeframe of August 10. The pair traded slightly below the critical Kijun-sen line throughout the trading day, thus preserving the prospects for further downward movement. There was no downward movement, which is still considered likely and logical, since the pair had been increasing in price for about three months before. However, the quotes failed to get close to the Senkou Span B line, as well as to the support area of 1.1702-1.1727, which are strong obstacles in the way of bears. The prospects of the US currency depend on them.
EUR/USD 15M
Both linear regression channels are directed downward on the 15-minute timeframe, which perfectly reflects what is happening on higher timeframes. The latest Commitment of Traders (COT), released on Friday, showed that the mood of professional traders did not change at all during the last reporting week on July 29-August 4 (we remind you that the report is published with a three-day delay). During this time period, the "non-commercial" category of traders opened 19,354 Buy-contracts and closed 3,561 Sell-contracts. Thus, the net position for the most important category of traders has grown by 23,000 at once, which is a very large and eloquent indication of the current mood of the major players. The most important thing is that the data exactly matches what is happening in the foreign exchange market, since the euro as a whole continued to grow until August 4. The euro did not suffer any losses during the next three trading days of the week. Thus, so far, everything is going to the point that the next COT report will show that non-commercial traders are increasing purchases. In recent days, the pair has lost about 120 points, but this drop is too weak to be reflected in the COT report.
The fundamental background for the EUR/USD pair did not change at all on Monday, as there were no important news or macroeconomic publications during the day. Therefore, there is nothing to analyze. We can only continue to consider global fundamental topics that support or pressure a particular currency in the long term. The main topic is still the coronavirus in the United States. According to the latest information, the number of daily recorded cases of the COVID-2019 virus is becoming less. However, it is too early to talk about the end of the epidemic wave. At the same time, a new political scandal is brewing in the United States, as US President Donald Trump signed several decrees concerning assistance to the American population affected by the coronavirus. He signed it without the approval of the US Congress, which he had no right to do under the law. Now we should expect a response from the Democrats, who can sue the president again or, at least, "dump a truck of stones into his garden" in the form of criticism.
Based on all of the above we have two trading ideas for August 11:
1) Buyers have not managed to overcome the resistance level of 1.1911. They temporarily remain outside of what is happening in the market. To make new purchases of the euro, you need to wait for the price to be consolidated above this level (or the resistance area of 1.1884-1.1910). Then we will recommend buying the pair while aiming for the resistance level of 1.2019. In this case, the potential Take Profit is about 80 points. Although, even when the price consolidates above the Kijun-sen line (1.1817), the bulls may start pressing with the target of the resistance level 1.1902, which you can also try to work out.
2) The bears are using their chances with great difficulty. The fact that they still managed to overcome the Kijun-sen line is good. However, for now they can only anticipate a downward movement to the Senkou Span B line (1.1725), to which there are only a few points left. Thus, we recommend considering new sales of the euro after overcoming the support area of 1.1702-1.1727 with the target of 1.1579. Potential Take Profit in this case is about 80 points.
