10.09.202611:31 Analisis Forex & Kajian: EUR/USD – September 10: What to Expect from the ECB

The wave situation on the hourly chart remains "bullish" despite the two-week decline. The latest completed upward wave broke above the previous peak, while the latest downward wave did not break below the previous low. Geopolitics remains consistently negative: negotiations between Iran and the United States are not taking place, and the blockade of the Strait of Hormuz remains in place. The FOMC's stance is currently more important for the dollar, but it remains contradictory.

There was no significant fundamental background on Wednesday, but the market is awaiting an important event on Thursday. In a few hours today, the results of the European Central Bank meeting will become known, and a press conference with Christine Lagarde will also be held. There is no intrigue ahead of this event, as traders are confident that the ECB will raise interest rates. However, the market has been moving very sluggishly in recent days, as if it were uncertain about this decision. In my view, there is no reason to doubt that monetary policy will be tightened, but at the same time, it is important to understand whether today's tightening will be the last one before a long pause. The ECB is unlikely to have the ability to raise rates to whatever level inflation in the European Union may require. Oil prices continue to rise and exceed $100 per barrel this week. Therefore, consumer price inflation in Europe may continue to accelerate despite two monetary policy tightenings. I assume that the market wants to understand whether the ECB is prepared to continue tightening. If so, the bulls will launch new attacks.

On the 4-hour chart, the pair rose to the 61.8% retracement level at 1.1649. A rebound from this level would allow for further bearish pressure after the pair exits the ascending channel, with targets at 1.1588 and 1.1526. Consolidation above 1.1649 would allow for further growth toward the next Fibonacci level of 76.4% at 1.1726. No emerging divergences are currently observed on any of the indicators.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 4,558 Long positions and closed 6,869 Short positions. During the seven weeks in February and March, the bulls' overwhelming advantage disappeared because of the war in Iran, while over the past twenty-three weeks the situation has become more balanced amid the supposed ceasefire and market hopes for an end to the war. The total number of Long positions held by speculators currently stands at 203,000, while the number of Short positions is 228,000. The bears remain in the lead, but their advantage is rapidly shrinking.

Overall, over the long term, major market participants continue to show strong interest in the euro. Of course, events of various kinds around the world, which have been plentiful in recent years, influence investor sentiment. In particular, the market is currently keeping a close eye on the situation in the Middle East, where the war repeatedly appears to end and then starts again. However, geopolitics no longer determines the dollar's fate on its own.

News Calendar for the United States and the European Union:

• European Union – ECB interest rate decision (12:15 UTC).
• United States – Producer Price Index (12:30 UTC).
• United States – Change in the number of initial unemployment benefit claims (12:30 UTC).
• European Union – Press conference with Christine Lagarde (12:45 UTC).
• United States – Existing Home Sales (14:00 UTC).

On September 10, the economic calendar contains five entries, among which I would highlight Christine Lagarde's speech following the ECB meeting. The economic background may influence market sentiment throughout Thursday.

EUR/USD Forecast and Trading Tips:

Buying the pair was possible after it closed above 1.1620 on the hourly chart, with a target of 1.1700. These positions can be held today. Selling positions will become possible if the pair consolidates below 1.1620 on the hourly chart, with a target of 1.1551.

The Fibonacci grids are drawn at 1.1620–1.1325 on the hourly chart and at 1.1849–1.1325 on the 4-hour chart.