EUR/USD – 1H.
Hello, dear traders! On Monday, the EUR/USD pair closed under 1.1250. However, on Tuesday morning the pair made a reversal in favor of the euro and closed above this level. Therefore, the growth process may continue towards the 161.8% correction level at 1.1357. The downward trend corridor, though the pair is much below it, is still a sign of traders' bearish sentiment. An opposite fixation under 1.1250 will result in a further decline towards the 200.0% correction level at 1.1143. The information background for the EUR/USD pair is quite weak now, if traders observe the calendar of economic events. However, in general there are a lot of relevant events and news. Lately the traders' community has been widely discussing the new lockdown in Austria, which can also spread to neighboring Germany and other EU countries. Authorities of each country with a new rise in COVID-19 cases, believe that not all citizens want to be vaccinated, which causes new waves.
In Austria, for example, vaccination will be compulsory for everyone from February 1 next year. But so far, on average, vaccination rates in the EU range between 50% and 80%. Moreover, in countries with high vaccination rates, a new lockdown is out of the question. At the same time, today the Eurozone PMI indices have been released. In November, the manufacturing PMI rose to 58.6, while the services PMI improved to 56.6. This positive data strengthened the euro currency on Tuesday morning. However, its overall decline continues due to the ECB weak rhetoric and monetary policy, the threat of deterioration of the COVID-19 pandemic in the EU, much stronger US economy and the Fed's monetary policy. Considering this information background, the European currency may continue to fall. There is almost no significant news and events in the EU and the US this week. Thus, traders' sentiment is unlikely to change.
EUR/USD – 4H
On the 4-hour chart, the pair has consolidated under the 127.2% correction level at 1.1404, counting on a further decline towards the next correction level of 161.8% at 1.1148. However, the bullish divergence of the CCI indicator made it possible to expect a reversal in favor of the EU currency and some growth towards the 127.2% correctional level at 1.1404. The rebound from the level of 1.1148 will also lead to the pair's growth. Fixation under 1.1148 will increase the probability of a further fall towards the next Fibo level of 200.0% at 1.0865.
US and EU news calendar:
EU - Manufacturing PMI (09-00 UTC).
EU - Services PMI (09-00 UTC).
US - Manufacturing PMI (14-45 UTC).
US - Services PMI (14-45 UTC).
On November 23, the EU has already released all significant reports of the day. Besides, in the US the same manufacturing and services PMI indices will be released in a few hours. They may also have some effect on traders' sentiment.
COT report (Commitments of traders):
The latest COT report showed the sentiment of non-commercial traders became more bearish during the reporting week. Speculators opened 6,966 long euro contracts and 2,679 short contracts. Thus, the total number of long contracts held by speculators has grown to 200,000, and the total number of short contracts has risen to 209,000. These figures almost coincide for the third week in a row, indicating that speculators do not have a clear mood. However, in general, in recent months there has been a tendency of strengthening bearish sentiment.Therefore, I conclude that traders' sentiment is now at a point where neither bulls nor bears have an advantage. However, at the same time the European currency continues falling, so the trend of strengthening the bearish sentiment among the major players is evident.
EUR/USD forecast and recommendations for traders:
I recommend new sales of the pair at closing under the level of 1.1250 with a target of 1.1143. It is possible to start buying now as the pair closed above the level of 1.1250 on the hourly chart with a target of 1.1357.
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 for ensuring current activities or export-import operations.
"Non-reportable positions" - small traders who have no significant influence on the price.
