EUR/USD – 1H.
Hello, traders! The euro/dollar pair performed a reversal on April 15 in favor of the US currency and anchored under the upward trend line. Thus, the "bullish" mood of traders was replaced by "bearish". During the past day, the pair managed to perform a small increase and resume the process of falling. So the initiative has finally passed to bear traders, as I expected in recent days. From the news of the past day, again, there is little to distinguish. I will review the economic reports below, but it can be noted that they caused a completely opposite reaction of traders. The IMF has published its forecasts for economic losses in the world economy, which are absolutely depressing. However, the euro and the dollar cannot become cheaper at the same time. Traders still chose to buy the US currency on Wednesday, and it seems that this decision was again not related to the information background. We also receive the first news about the possible lifting of the quarantine in Europe and the United States. Doctors fear that getting out of quarantine too quickly could lead to new waves of the epidemic.
EUR/USD – 4H.
On the 4-hour chart, fixing the pair's quotes above the Fibo level of 38.2% allowed traders to count on continued growth. However, the pair performed a reversal in favor of the US dollar, and a signal on the hourly chart announced a change in the mood of traders. Thus, on the 4-hour chart, the closing was also performed under the corrective level of 38.2% (1.0964), which increases the probability of a further fall of the pair in the direction of the Fibo level of 23.6% (1.0840). The rebound of quotes from this level will work in favor of the European currency and the beginning of growth towards the corrective level of 38.2% and the closing level of 23.6% will increase the probability of further decline towards the corrective level of 0.0% (1.0638). Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair performed an increase to the corrective level of 38.2% (1.0965) and still rebounded from it. The picture remains identical to the 4-hour chart since the same grid of Fibo levels is in effect. However, on the daily chart, the rebound from the Fibo level of 38.2% is more visible.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair continues to trade near the bottom line of the "narrowing triangle". The rebound of quotes from this line still allows us to expect some growth in the long term in the direction of the level of 1.1600 (the upper line of the "triangle"). Closing the pair under the "triangle" will work in favor of the US currency and, possibly, a new long fall.
Overview of fundamentals:
On April 15, there was no news or reports in the European Union, while in America, data on retail sales (-8.7% in March) and industrial production (-5.4% in March) were released. Thus, as I said above, these reports should have led to a fall in the US dollar, not to its growth.
News calendar for the United States and the European Union:
Germany - consumer price index (08:00 GMT).
EU - change in industrial production (11:00 GMT).
USA - number of initial applications for unemployment benefits (14:30 GMT).
On April 16, the EU news calendar contains only secondary reports such as the German consumer price index or industrial production in the EU. These reports are unlikely to interest traders. But the report on the number of new applications for the benefit will undoubtedly arouse intense interest among traders.
COT (Commitments of Traders) report:
The latest report from Commitments of Traders showed a reduction in the total number of both long and short contracts. The new COT report will be released tomorrow. In recent days, the pair has managed to show both growth and decline. Thus, I do not expect a major change in the ratio of buy-to-sell contracts among major market players. The total number of contracts currently remains overweight for short: 568,000-529,000 The last four weeks have shown that the number of both categories of contracts has been steadily decreasing. This means that activity among major players is falling, and the advantage remains with the bears.
Forecast for EUR/USD and recommendations to traders:
At this time, I recommend staying in the sales of the euro with the goal of 1.0840. If anchoring is performed below this level, short positions can be kept open with the goal of 1.0638. I do not recommend buying a pair yet since there is not a single trading signal for this.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
