On Monday, the EUR/USD pair consolidated above the 76.4% retracement level at 1.1517, which allowed it to continue its upward movement. However, by the end of the day, the quotes returned to the 76.4% level. Today, a rebound from this level will again work in favor of the European currency and a slight rise toward the 61.8% Fibonacci level at 1.1594. A consolidation of the pair below 1.1517 will allow us to expect a slight decline in the euro.
The wave situation on the hourly chart remains simple and clear. The last upward wave did not break the high of the previous wave, while the last completed downward wave broke the previous low. Thus, at this time the trend remains "bearish." Bullish traders have gone on the offensive, but their efforts are still insufficient to form a trend. For the "bearish" trend to be considered completed, the pair needs to rise above the level of 1.1656.
On Monday, the information background was almost absent. The only report of the day was the business climate index in Germany, but traders paid no attention to it. Over the past few weeks, I can highlight only one truly global event. And it is not the resumption of publications on the U.S. labor market and unemployment. The market is once again seeing rising "dovish" expectations regarding the Fed's December monetary policy decision. I won't go into detail; I will only say that these are just the expectations of the moment. Today they may be "dovish," tomorrow traders may receive strong labor market data and weak inflation data, and expectations will immediately become "hawkish." However, at the moment traders are almost certain that in December the FOMC will cut rates for the third time in a row, so the dollar has every chance to resume its decline. But over the past week, bulls still have not launched a proper offensive, which is what I wanted to point out in this article. Trader activity remains minimal, and bullish activity is even lower.
On the 4-hour chart, the pair rebounded from the 23.6% retracement level at 1.1649, turned in favor of the U.S. currency, and began a new downward movement. Consolidation below 1.1538 allows us to expect a continuation of the decline toward the 50.0% Fibonacci level at 1.1448. Consolidation above 1.1538 will work in favor of the euro and a slight rise toward the next resistance level of 1.1649–1.1680. Two bullish divergences on the CCI indicator increase the likelihood of an upward reversal.
Commitments of Traders (COT) Report:
During the latest reporting week, professional players opened 3,377 long positions and 2,381 short positions. COT reports began to be released again after the "shutdown," but for now the data being published are outdated—October data. The sentiment of the "Non-commercial" group remains "bullish" thanks to Donald Trump and continues to strengthen over time. The total number of long positions held by speculators is now 255 thousand, while short positions amount to 137 thousand.
For thirty-three consecutive weeks, large players have been reducing their short positions and increasing their longs. Donald Trump's policies remain the most significant factor for traders, as they can cause many problems that will be long-term and structural for America. Despite the signing of several important trade agreements, many key economic indicators are showing a decline, and the dollar is losing its status as a "global reserve currency."
News Calendar for the US and Eurozone:
- United States – ADP weekly employment change (13:15 UTC).
- United States – Producer Price Index (13:30 UTC).
- United States – Retail sales change (13:30 UTC).
On November 25, the economic events calendar contains three entries. The influence of the information background on market sentiment on Tuesday will be present in the second half of the day.
EUR/USD Forecast and Trader Recommendations:
I would not recommend considering selling the pair today, as bulls may launch a new offensive. It is unlikely to be rapid, but still possible. Buying can be opened upon a rebound from the 1.1517 level on the hourly chart, with a target of 1.1594.
The Fibonacci grids are built from 1.1392 to 1.1919 on the hourly chart and from 1.1066 to 1.1829 on the 4-hour chart.
