EUR/USD – 1H.
Hello, traders! According to the hourly chart, the EUR/USD pair stopped the growth process, performed a reversal in favor of the US currency and fell to the ascending trend line number 2. Thus, fixing the pair's quotes under this line will work in favor of continuing the fall of quotes in the direction of the trend line number 1 and will be considered as a signal to sell. We will extract more precise goals from higher charts.
EUR/USD – 4H.
As seen on the 4-hour chart, after the formation of a bearish divergence in the MACD indicator, the pair performed a reversal in favor of the US currency and fell to the corrective level of 76.4% (1.1130). However, the euro/dollar pair failed to close confidently below this level. Thus, the chances of resuming the growth of quotes remain. Also, the Fibo level of 76.4% did not serve as a rebound level for the pair, so traders also do not have a signal to buy at this time. However, I expect a further fall in the direction of the Fibo levels of 61.8% (1.1064) and 50.0% (1.1009). Especially if the hourly chart will be closed under the upward trend line.
EUR/USD – Daily.
According to the daily chart, the euro/dollar pair changes very little. The key event is working out the upper line of the descending trend corridor. At the moment, it is impossible to make a clear conclusion whether the rebound from this line has been completed or whether it is just a small pause before new growth. However, it looks exactly like a rebound with a reversal in favor of the US dollar.
EUR/USD – Weekly.
The weekly chart indicates that the European currency has the potential for growth. However, this is a weekly chart, which means that goals can be worked out over the course of months. The lower charts favor a pullback of quotes down, after which it is quite possible to resume a more global growth of the euro. However, no chart gives clear signals to sales yet.
Overview of fundamentals:
On March 4, the European Union released a composite business activity index (PMI) for the service sector. The first did not change in comparison with January - 51.6, the second slightly decreased - 52.6. In Germany, both indices fell to 50.7 and 52.5. Retail sales in the euro area increased by 1.7% y/y, an increase from December. The ADP report showed a larger increase in the number of people employed in the US in February than traders expected, and the Markit business activity indices remained unchanged (49.6 and 49.4), but the ISM index for the service sector rose significantly to 57.3. Thus, in general, the US dollar should have received support from this information background.
News calendar for the United States and the European Union:
USA - change in the volume of production orders (15:00 UTC+00).
Today in America, there will be a single report on production orders, and in the EU - there will be no such report. Thus, the information background on Thursday will be virtually absent.
COT survey (Commitments of traders):
The latest COT report for the week of February 25 showed that long positions are being built up by major market players. At the same time, speculators prefer to get rid of long positions and hedgers – on the contrary, to increase. From my point of view, this means that the downward trend is complete. Thus, in the future, we can expect growth to 1.1600, as the weekly chart predicts. However, now traders are more interested in the question of how the pair will behave near the upper line of the corridor on the daily chart. After all, in the event of a rebound, you can count on a strong drop in the euro. In this matter, the latest COT report will not help. You need to rely either on the graphical analysis or wait for the new COT report, which will be released on Friday.
Forecast for EUR/USD and recommendations for traders:
In this situation, I recommend looking closely at the closing of long positions, as the daily chart shows a possible rebound and reversal of the pair in favor of the US currency near the level of 1.1150. It is on the daily chart that the trend should now be determined. As I said, the rebound from the upper line of the corridor will allow you to sell the pair with the targets of 1.1064 and 1.1009. The 4-hour chart also has a sell signal in the form of a bearish divergence. Thus, if you work with a short stop, you can sell the pair already. Also, in the next few hours, a sales signal may be formed on the hourly chart.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, and companies that buy currency not for speculative profit, but for current operations or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
