EUR/USD – 1H.
On March 5, the EUR/USD pair continued the process of falling without any reversal in favor of the US currency. As of March 8, the quotes fell to the corrective level of 127.2% (1.1873), and it does not seem that a reversal in favor of the EU currency is planned. The downward trend corridor keeps the current mood "bearish". Friday was a very interesting day in terms of information background. However, there was no confidence that traders would pay due attention to the statistics from America. Let me remind you that the markets do not always react to even important reports. Often the reaction is very weak, absolutely not corresponding to the nature of the news. In practice, it just turned out that the news was very strong for the US dollar, however, the reaction of traders was very weak.
Nonfarm Payrolls significantly exceeded the expectations of traders and accounted for almost 400 thousand new jobs outside of agriculture. The unemployment rate fell from 6.3% to 6.2%. Wages increased by 0.2% compared to January. Thus, the data from the US turned out to be very strong. But the US currency has been showing growth for 2 weeks already. Thus, the reaction to these strong reports was very weak. However, this is better than nothing. For the previous three or four months, traders had ignored Nonfarm Payrolls reports altogether. However, at the same time, I note that the US economy continues to show a high rate of recovery, which indirectly supports the US dollar. Its quotes paired with the euro currency have been growing for quite a long time. And even today, when the calendars of economic events in the Eurozone and the United States are empty, the dollar continues to grow. This suggests that the currency is not currently growing based on economic reports.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new reversal in favor of the US currency and closed under the Fibo level of 161.8% (1.2027). As a result, the process of falling continues in the direction of the next corrective level of 127.2% (1.1729). There are no emerging divergences in any indicator today.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair have made a consolidation under the upward trend corridor, so the process of falling can continue in the direction of the corrective level of 261.8% (1.1822). Closing the pair's rate below this level will increase the probability of a further fall in the direction of the next Fibo level of 200.0% (1.1566).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On March 5, economic reports from the US and the EU caused only a weak reaction from traders, however, the information background as a whole continues to support the growth of the dollar.
News calendar for the United States and the European Union:
On March 8, the calendars of economic events in the European Union and the United States are empty, however, the US currency now continues to show growth without this.
COT (Commitments of Traders) report:
Last Friday, the next COT report was released and now it turned out to be quite aggressive. The number of long contracts concentrated in the hands of the "Non-commercial" category of traders decreased by 8 thousand, and the number of short contracts increased by 8 thousand. Thus, the mood of speculators has become much more bearish, which generally coincides with what is happening on the euro/dollar pair in the last two weeks. Based on this and the daily chart data, the probability of a further drop in the pair's quotes is growing. However, I remind you that the report for February 2 also showed discouraging figures. However, a few days after it, a new increase in euro quotes began. In general, the number of long contracts in the hands of speculators still significantly exceeds the number of short contracts.
Forecast for EUR/USD and recommendations for traders:
It was recommended to sell the pair at the closing of quotes under the level of 100.0% (1.1952) with a target of 1.1873 on the hourly chart. This goal has been achieved, now sales can be left open with a target of 1.1772. I recommend buying the pair when closing above the downward trend corridor on the hourly chart with targets of 1.2021 and 1.2063.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
