EUR/USD – 1H.
The EUR/USD pair on Monday performed a consolidation above the downward trend corridor and the level of 1.1629. Thus, the growth process can now be continued toward the next corrective level of 100.0% (1.1704). The euro has been showing growth for five days and is chasing the British, which has been growing for several weeks in a row and continues this process. The rebound of the pair's exchange rate from the level of 100.0% will allow us to count on a reversal in favor of the US currency and a slight drop in the direction of the level of 1.1629. The information background on Monday was extremely weak. There was no interesting news for the euro that day, and for the Americans, there was only one report on the change in industrial production in September. Traders expected an increase of 0.3% m/m, but production decreased by 1.3%.
Thus, the fall of the American at the end of the day can even be considered quite logical. Although the activity of traders again left much to be desired. However, it is also good that there is a trend movement now. In the coming days, a new corridor may be built, already ascending. Thus, it will become more pleasant and convenient to trade a pair. In general, nothing interesting is happening on the market right now. All the most important and interesting topics are now put on pause. There is a feeling that the markets will continue to trade unhurriedly until the Fed meeting, scheduled for November 3. And at this meeting, everyone will once again be waiting for Jerome Powell to announce the beginning of the curtailment of the economic stimulus program. Let me remind you that the American has been growing for more than a month, clearly visible on the 4-hour chart, and now its decline may begin. What is in the first case, what is in the second case, the movement has nothing to do with the information background, except with the expectations and preferences of traders.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed above the corrective level of 100.0% (1.1606). Thus, traders can now count on the continued growth of quotes in the direction of the next Fibo level of 76.4% (1.1782). Emerging divergences are not observed in any indicator today. Fixing the pair's exchange rate below the level of 100.0% will work in favor of the US currency and the resumption of the fall in the direction of the corrective level of 127.2% (1.1404).
News calendar for the USA and the European Union:
US - FOMC member Mary Daly will give a speech (15:00 UTC).
US - FOMC member Michelle Bowman will deliver a speech (17:15 UTC).
US - FOMC member Rafael Bostic will deliver a speech (18:50 UTC).
On October 19, there will be no reports in the European Union, and in the United States, the calendar of economic events contains only speeches by FOMC representatives. They can be quite interesting, but they are unlikely to affect the overall mood of traders.
COT (Commitments of Traders) Report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders practically did not change. Speculators have opened 5,733 long contracts on the euro and 2,420 short contracts. Thus, the total number of long contracts in the hands of speculators has grown to 203 thousand, and the total number of short contracts - to 222 thousand. Over the past few months, the "Non-commercial" category of traders has tended to eliminate long contracts on the euro and increase short contracts. Or increase short at a higher rate than long. This process continues even now, while the European currency continues to fall weakly. Thus, the actions of speculators affect the behavior of the pair at this time. The fall may resume.
EUR/USD forecast and recommendations to traders:
Traders are still not trading the pair too actively. Yesterday, I recommended buying the pair when closing over a descending corridor with targets of 1.1629 and 1.1704. Now, these deals should be kept open. I do not recommend selling the pair now since the probability of further growth is higher, and there are still no signals to sell.
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 to make speculative profits, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
