On Thursday, the EUR/USD pair rose toward the resistance level of 1.1594–1.1607 but failed to perform either a rebound or consolidation above it. Today, a rebound of quotes from this level will work in favor of the U.S. currency and a slight decline toward the 76.4% corrective level at 1.1517. Consolidation of the pair above the level will increase the likelihood of further growth toward the next resistance level at 1.1645–1.1656.
The wave situation on the hourly chart remains simple and clear. The last completed upward wave did not break the peak of the previous wave, and the last completed downward wave did not break the previous low. Thus, the trend at this time remains "bearish." The bulls have gone on the offensive, but their momentum is still not enough to form a trend. For the bearish trend to be considered completed, the pair must rise above 1.1656.
On Thursday, there was no news background, and traders decided it was better to wait for the next reports and important events before taking active steps. Trader activity has recently remained low, but I believe that in December we will get answers to many questions — in particular, the current state of the U.S. labor market, whether it requires additional support from the Federal Reserve, how quickly inflation is growing, and what decision the FOMC will make at its final meeting of the year. Answers to these questions will help traders shape a long-term strategy, but I believe this strategy has been bullish and will remain bullish for many reasons related to Donald Trump's policies and the Federal Reserve's policy. Thus, today trading should be guided by chart-based signals, but important data will start coming in next week. Bears still dominate the market, but their dominance is mostly a facade.
On the 4-hour chart, the pair reversed in favor of the euro after forming two bullish divergences on the CCI indicator. The pair consolidated above the 38.2% correction level at 1.1538, which allows traders to expect continued growth toward the resistance level of 1.1649–1.1680. No new emerging divergences are observed today on any indicator. A rebound from the 1.1649–1.1680 level will work in favor of the dollar and some decline.
Commitments of Traders (COT) Report:
During the last reporting week, professional traders opened 3,377 long positions and 2,381 short positions. COT reports have resumed after the government shutdown, but for now the data being released is outdated — from October. 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 255,000, while the number of short positions is 137,000.
For thirty-three consecutive weeks, large players have been reducing short positions and increasing long positions. Donald Trump's policies remain the most significant factor for traders, as they may cause many problems of a long-term and structural nature for America. Despite the signing of several important trade agreements, many key economic indicators show decline, and the dollar is losing its status as a "world reserve currency."
News calendar for the U.S. and the European Union:
- European Union – Germany Retail Sales change (07:00 UTC).
- European Union – Germany Unemployment Rate (08:55 UTC).
- European Union – Germany Unemployment Change (08:55 UTC).
- European Union – Germany Consumer Price Index (13:00 UTC).
On November 28, the economic calendar contains four noteworthy entries. The impact of the news background on market sentiment will be weak, as all reports will be released only in Germany.
EUR/USD Forecast and Trader Recommendations:
Selling the pair today will be possible upon a rebound from the 1.1594–1.1607 level on the hourly chart, with a target at 1.1517. Buying could be opened upon a rebound from the 1.1517 level on the hourly chart, with a target at 1.1594. The target has been reached. New buys are possible upon a close above the 1.1594–1.1607 level with a target at 1.1645–1.1656.
The Fibonacci grids are built from 1.1392–1.1919 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.
