EUR/USD – 1H.
The EUR/USD pair showed strong growth again during the last trading day. This time, the pair's quotes performed an increase to the level of 1.2224 and already today completed a close above it, which increases the probability of further growth of the pair in the direction of the next corrective level of 200.0% (1.2275). Only one important report was released in the European Union yesterday. And it did not have any special impact on traders. We are talking about the change in the volume of GDP in the first quarter. The value of this indicator remained unchanged at -0.6% q/q. The European economy continued to contract in the first quarter after the negative fourth quarter of 2020. This news can hardly be called positive for the euro currency. However, traders persistently ignore them, continuing to buy up the European currency. Also, yesterday, ECB Chairwoman Christine Lagarde made a speech, which did not tell traders anything interesting. However, in any case, no one expected any positive statements from her. Let me remind you that in recent statements, the ECB president compared the EU economy to a patient who can stand on his feet only with the help of two crutches, clearly hinting that the economic stimulus will continue. However, all these monetary and fiscal stimuli did not significantly impact GDP in the "winter" quarters. Thus, the main hope of the European economy is now associated with the fastest possible vaccination of the population, which is associated with its future recovery. The more people are vaccinated, the faster the economy will start to come to its senses. According to the latest data, about 200 million vaccinations against coronavirus have already been made in the EU. But this is still not enough since the European Union population exceeds 450 million, and each resident must receive two doses of the vaccine.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a new rebound from the ascending trend line, after which the price growth continues. Yesterday, the level of 1.2223 was reached. Closing above will allow traders to expect continued growth of the pair in the direction of the corrective level of 200.0% (1.2353). Only fixing the pair's exchange rate under the ascending trend line will work in favor of the US currency and will allow you to count on a drop in the pair's quotes.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair closed above the level of 161.8% (1.2027), which allows us to expect continued growth in the direction of the corrective level of 200.0% (1.2356). Upward trends are continuing on all charts right now.
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 May 18, the calendar of economic events in the European Union contained several interesting entries, but these data did not affect traders. In America, the calendar was empty.
News calendar for the United States and the European Union:
EU - consumer price index (09:00 UTC).
US - publication of the minutes of the Fed meeting (18:00 UTC).
On May 19, the minutes of the last FOMC meeting will be published in the US. The European Union will release an important inflation report.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which again showed that speculators actively increased long contracts in the reporting week. A week earlier, the category of "Non-commercial" traders increased both types of contracts. Now the number of longs was 16,908, and the number of short - 5,319. Thus, the mood of the major players again becomes more "bullish," which indicates a possible continuation of the growth of the European currency. It is noteworthy that the total number of positions ("Total") is higher for short contracts. However, I remind you that we are more interested in the "Non-commercial" column.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair when closing under the trend line on the 4-hour chart with targets of 1.2068 and 1.1990. Purchases of the pair were recommended if a close above the level of 1.2166 is made with a target of 1.2224. This goal has been achieved. New purchases – when fixed above 1.2224 with a target of 1.2275.
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.
