EUR/USD – 1H.
, Outlook for
Good afternoon, dear traders! Yesterday, the euro/dollar pair showed a rise. The pair closed above the 127.2% Fibonacci level located at 1.1873. Thus, the pair may continue climbing towards the upper limit of the downward channel. Traders' sentiment remains bearish. If the price fixes below the 127.2% Fibonacci level, it will resume falling towards the 161.8% correctional level at 1.1772. At the same time, traders began calming down after a surge in the yield of the US government bonds. Yesterday, the indicator dropped, remaining within a strong uptrend.
If the US bonds yield continues growing, the US dollar will also gain in value. Several months ago, traders did not pay attention to this indicator. Now, it is one of the main drivers of the US dollar rise.
At the same time, traders almost ignore macroeconomic reports. Yesterday, the eurozone published its GDP data for the fourth quarter. The result turned out to be a bit better than the previous figure. Thus, the eurozone GDP declined by 4.9% on a yearly basis. Thus, a jump in the euro could be explained by this report.
Nevertheless, a lot depends on the yield of the treasury bonds. That is why today, this indicator may also shape the market sentiment. Economists suppose that the US consumer prices may go on increasing.
EUR/USD – 4H.
On the four-hour chart, the euro/dollar pair is still falling to the 127.2% correctional level of 1.1729. If the pair bounces from this level, it may reverse and inch up. However, the most important data is presented on the one-hour chart.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair fixed below the uptrend channel. Thus, it continued falling towards the 261.8% correctional level of 1.1822. If the pair closes below this level, it is likely to go on sliding to the 200.00% Fibonacci level of 1.1566.
EUR/USD – Weekly.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair fixed below the narrowing triangle. It means that the pair may advance in the long term.
News overview:
On March 9, the US macroeconomic calendar was absolutely empty. However, the eurozone GDP report failed to influence the pair's movement.
Macroeconomic calendar for the US and the eurozone:
US - Consumer Price Index (13-30 GMT).
On March 10, the eurozone will disclose its inflation report for February
Commitments of traders report:
Last Friday, the COT report turned out to be rather aggressive. The number of long contracts opened by non-commercial traders slumped by 8 thousand, whereas the number of short contracts soared by the same 8 thousand. Thus, speculators' sentiment became more bearish that matches the pair's movement in the last two weeks. Judging by the COT report and the daily chart, the quote is likely to continue falling. Notably, the report published on February 2, was also discouraging. However, some days later, the pair resumed gaining in value. In general, the number of long contracts significantly exceeds the number of short contracts.
Outlook for EUR/USD and recommendations for traders:
It is possible to sell the pair, if it closes below the 127.2% level located at 1.1873 with the target of 1.1772 on the one-hour chart. Buy positions could be opened, if the pair closes above the downtrend channel on the one-hour chart with the targets of 1.2021 and 1.2063.
Terminology
"Non-commercial" traders are major market players such as banks, hedge funds, investment funds, private, and large investors.
"Commercial" traders are 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" are small traders who do not have a significant impact on the price.
