EUR/USD – 1H.
Hello, traders! The EUR/USD pair continued to grow on the hourly chart on May 1, but by the end of the trading day, it performed a reversal in favor of the US dollar and began falling in the direction of the lower line of the ascending trend corridor. Thus, the overall mood of traders thanks to the corridor remains "bullish", but if the quotes are fixed under the corridor, the mood will change to "bearish", and the probability of continuing to fall will increase. Last Friday, there were not many economic events. By and large, the entire news summary now boils down to the fact that many countries of the world, especially the European Union and America, are beginning to relax the quarantine at their own risk. In some countries, this decision is really justified, since the death and morbidity rates have been falling for several weeks in a row, which makes it possible to confidently declare that the peak of the epidemic has passed. But, for example, in the US, it is too early to talk about passing the peak, nevertheless, Donald Trump is still starting to open the economy and remove the quarantine in some states. And of course, the verbal confrontation between China and the United States continues. The White House accuses Beijing of deliberately withholding vital information about the coronavirus in its own interests.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the EUR/USD pair performed a reversal in favor of the US dollar and anchored under the corrective level of 38.2% (1.0964). A new ascending trend line was built, which, like the ascending corridor on the hourly chart, supports bull traders. Thus, the rebound from this trend line will also work in favor of the euro currency and the resumption of the growth in the direction of the corrective level of 50.0% (1.1065). Fixing the pair's exchange rate under the trend line will work in favor of the US currency again and increase the probability of continuing to fall in the direction of the corrective level of 23.6% (1.0840). Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair performed a reversal in favor of the European currency and increased to the corrective level of 38.2% (1.0965). However, the rebound of quotes from this level will work in favor of the US dollar and the resumption of the fall in the direction of the Fibo level of 23.6% (1.0840).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair continues to trade near the bottom line of the "narrowing triangle". The rebound of quotes from this line still allows us to expect an increase in quotes 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 May 1, there was not much news. Business activity indices in the US manufacturing sector declined, as expected. However, the fall of the US currency continued all day without these indices.
News calendar for the US and the EU:
EU - index of business activity in the manufacturing sector (10:00 GMT).
On May 4, the calendar of US economic events is empty, and only one report will be received from the European Union - on business activity in the manufacturing sector, which is expected to decrease to 33.6.
COT (Commitments of Traders) report:
On Friday, a new COT report for the week to April 27 was released. Please note that COT reports are published with a three-day delay. The report showed that the global mood of major market players has not changed. In total, during the reporting week, long contracts lost 2,895, while short contracts lost 2,663. Thus, the losses are almost identical, which means that the general mood remains the same. As for the "Commercial" and "Non-commercial" groups separately, the first one got rid of long contracts, and the second one got rid of both long and short. At the same time, hedgers closed 13,200 contracts for sale at once, which is a high value. Speculators also got rid of purchases of the euro currency and increased sales. The euro currency fell after these manipulations, but in the second half of last week, it began to grow, which may indicate a new build-up of long-contracts by speculators. In general, the "Non-commercial" group has twice as many purchase contracts on its hands, which means a "bullish" mood among professional market players in the long run.
Forecast for EUR/USD and recommendations for traders:
At this time, I recommend selling the euro currency with the goal of 1.0840, only if the closing is performed under the upward trend line on the 4-hour chart. I recommend buying the pair again when the quotes break off from the same trend line with the goal of 1.1065.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
