EUR/USD, H1
The EUR/USD pair slightly fell inside the sideways channel and then rose at the same volume on Thursday. At the moment, it continues to trade near the upper border of the sideways channel, which practically coincides with the correction level of 161.8% - 1.1357.
A rebound of quotes from this level or line will work in favor of the U.S. currency and some fall towards the level of 1.1250 and the lower border of the corridor. Consolidation of price above the channel will work in favor of continued growth towards the next level of 1.1450. However, today I definitely do not expect the pair to consolidate above the corridor. And even more so below.
Traders' activity is at zero, and the market will be closed a few hours earlier in light of the celebration of Christmas day. It is already clear that traders have already left the market, and most banks and financial institutions are closed today.
Thus, traders are most likely just waiting for the end of the Christmas week and are not going to make any gestures. Probably, it is not worth saying that the economic calendar does not contain a single interesting entry on Friday. Yesterday, the information background was expressed by several reports in the U.S., which also did not have a strong influence on the mood of traders.
The omicron strain continues to gain momentum in the European Union and the United States and this is the only topic that is currently being discussed. However, the euro-dollar pair has been in a sideways channel for a month now, so I conclude that traders are not worried about the omicron, the new wave of coronavirus and the possible consequences of this.
Next week the activity of traders may increase slightly, as today it is practically at zero. At the same time, the next week is New Year's, and one cannot expect much from it either. There is not a single interesting entry in the calendars of the European Union and the United States during the said week.
EUR/USD, H4
On the 4-hour chart, the pair has completed the rally towards the upper border of the downward trend channel, which can just as well be called sideways. The bearish divergence formed by the CCI indicator allows us to expect a reversal in favor of the U.S. currency and a slight fall in the direction of the correction level of 161.8% - 1.1148.
The situation on the hourly chart is almost identical. The closure of the pair above the corridor will allow us to expect further growth of the euro in the direction of the 100.0% Fibo level - 1.1606.
News calendar for the United States and the European Union:
December 24: the calendar of economic events in the European Union and the United States is completely empty. Thus, today I do not expect that the information background will have any effect on the mood of traders.
COT Report (Commitments of traders):
The latest COT report showed that the sentiment of the "Non-commercial" traders category became more "bearish" during the reporting week. The speculators got rid of both Longs and Shorts. In total, 7,218 Long contracts and 2,819 Short contracts in the euro currency were closed. Thus, the total number of Long contracts in the hands of speculators decreased to 186,000, and the total number of Short contracts, to 202,000.
Moderately bearish sentiment continues for the most important category of traders. The most interesting changes were observed among traders of the "Commercial" category, who closed 40,000–45,000 contracts of both types. In total, about 100,000 contracts for the euro currency were closed during the reporting week.
Forecast for EUR/USD and recommendations for traders:
Selling will be possible in case of a rebound from the 1.1357 level on the hourly chart with the target at 1.1250. I recommended buying the euro when the rebound from the level of 1.1250 with the target of 1.1357. I recommend new purchases if the pair closes above the sideways channel on the hourly chart with the target at 1.1450.
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 to obtain speculative profit, but to ensure current activities or export-import operations.
"Nonreportable positions" - small traders who do not have a significant impact on the price.
