22.09.202613:12 Analisis Forex & Kajian: EUR/USD – September 22: The Euro Continues to Decline

The EUR/USD pair traded sideways throughout Monday, but on Tuesday morning it fell below the 61.8% retracement level at 1.1473. Therefore, the decline may continue toward the next Fibonacci level of 76.4% at 1.1416. Consolidation above 1.1473 would favor the euro and some upward movement toward the 50.0% retracement level at 1.1519.

The wave structure on the hourly chart has changed to a bearish one. The latest completed upward wave failed to break the previous peak, while the latest downward wave broke the previous low. The geopolitical situation remains consistently negative and has a strong chance of becoming more tense in the near future. The market expects several stages of FOMC monetary policy tightening by the end of the year. These two factors have brought bearish traders back into the market.

There was no significant news flow on Monday, and during the day traders found no compelling reason to accelerate market movements. The market is currently in another pause before a potential increase in volatility, while bearish traders continue to exert gradual downward pressure. There was also no significant economic background during the first half of today's session, so the U.S. dollar is rising without support from economic data. Therefore, I conclude that we are still seeing some effects of last week's FOMC meeting. Last week, the Fed decided to raise its interest rate for the first time in three years, which had a strong impact on the market. Traders now see nothing but further monetary policy tightening by the Fed, or perhaps simply do not want to see anything else. The ECB's monetary policy tightening does not appear to satisfy them for some reason, so they are not paying attention to it.

On the 4-hour chart, the pair declined to the 23.6% Fibonacci level at 1.1449. A rebound from 1.1449 would allow for a reversal in favor of the euro and some upward movement toward 1.1526. Consolidation below 1.1449 would increase the likelihood of a further decline toward the next retracement level of 0.0% at 1.1325. No emerging divergences are currently observed in any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders closed 4,968 Long positions and opened 12,723 Short positions. During the seven weeks in February and March, the overwhelming advantage of buyers disappeared because of the war in Iran, while over the past twenty-four weeks the situation has become more balanced amid market expectations that the conflict will end. The total number of Long positions currently held by speculators is 198,000, while the number of Short positions is 241,000. Sellers remain in the lead, although their advantage is narrowing.

Overall, over the long term, large market participants continue to show considerable interest in the euro. Clearly, various events around the world, of which there has been no shortage in recent years, affect investor sentiment. In particular, the market is currently keeping a close watch on the situation in the Middle East, where the war alternately appears to end and then resume. However, geopolitical developments no longer determine the dollar's direction on their own.

U.S. and European Union Economic Calendar:

• U.S. – ADP employment report (weekly) (12:15–12:00 UTC).
• European Union – Consumer Confidence Index (14:00 UTC).

The economic calendar for September 22 contains two entries, neither of which I consider particularly interesting or important. The economic background is therefore unlikely to have any influence on market sentiment on Tuesday.

EUR/USD Forecast and Trading Tips:

Long positions in the pair are possible today if the price consolidates above 1.1473 on the hourly chart, with targets at 1.1519 and 1.1564. Short positions were possible following consolidation below 1.1473, with a target of 1.1416. These trades can remain open today.

The Fibonacci levels are drawn from 1.1325 to 1.1712 on the hourly chart and from 1.1849 to 1.1325 on the 4-hour chart.