On Friday, the EUR/USD pair rebounded from the corrective level at 127.2%-1.0619, favoring the European currency and initiating a new upward movement towards the Fibonacci level of 100.0% at 1.0696. Looking closely, throughout last week, traders were engaged in a tug-of-war between the levels of 1.0619 and 1.0696. Thus, at the moment, we observe a new sideways movement. Consolidation of quotes above the level of 1.0696 will work in favor of the euro and continue the upward movement towards the corrective level of 76.4% at 1.0764.
The wave situation remains unchanged. The last completed upward wave failed to break the peak of the previous wave (from March 21), and the last downward wave broke the last low (from April 2). Thus, we are dealing with a "bearish" trend, and at the moment, there is no sign of its completion. For such a sign to appear, a new upward wave must break the peak of the previous wave (from April 9). Or the next downward wave (which has yet to start) fails to break the last low from April 16.
The news background on Friday was very weak. Throughout the current week, bear traders havestill need to received the necessary information to continue selling the euro. The problem lies in the strong level of 1.0619. It acts as a psychological level for traders, below which bears will gain even greater dominance than they have now. Thus, even speeches by Jerome Powell, several of his colleagues, and several ECB Monetary Policy Committee members did not help the dollar continue its upward movement. Several times,, bears triedunsuccessfully to break through the level of 1.061uccessful. Nevertheless, the news background can still be considered "bearish." The question is only when the level of 1.0619 will be broken. Bulls currently have nothing to oppose, as the Fed will not ease monetary policy even in June. And when the first interest rate cut will occur now is unknown.
On the 4-hour chart, the pair fell to the corrective level at 23.6%-1.0644 and consolidated below it. However, two "bullish" divergences on the CCI indicator and the RSI indicator falling below 20 worked in favor of the euro and initiated growth towards the corrective level at 38.2%-1.0765. Consolidation of quotes below the level of 1.0644 again allows counting on a decline towards the corrective level of 0.0%-1.0450. The trend remains "bearish."
Commitments of Traders (COT) Report:
During the last reporting week, speculators opened 3493 long contracts and 23992 short contracts. The sentiment of the "Non-commercial" group remains "bullish" but continues to weaken rapidly. The total number of long contracts held by speculators now stands at 179 thousand, while short contracts amount to 167 thousand. The situation will continue to change in favor of bears. The second column shows that the number of short positions has increased from 92 thousand to 167 thousand over the past three months. Over the same period, long positions decreased from 211 thousand to 179 thousand. Bulls have dominated the market for too long, and now they need a strong news background to resume the "bullish" trend. However, the news background has only been supporting bears lately. The European currency could have lost many more positions over the past weeks.
News Calendar for the US and EU:
EU – Speech by ECB President Christine Lagarde (15:30 UTC).
On April 22, the economic events calendar contains only one entry, but an important one. The influence of the news background on traders' sentiment today may be moderate in strength but only in the second half of the day.
Forecast for EUR/USD and Trader Advice:
Sales of the pair are possible today upon consolidation below the level of 1.0619 on the hourly chart, with targets at 1.0519. Or upon a rebound from the level of 1.0696 with a target of 1.0619. Purchases of the euro were possible on Friday upon a rebound from the level of 1.0619 on the hourly chart with a target of 1.0696. Currently, they can be held.
