On Monday, the EUR/USD pair continued its upward movement after rebounding from the 38.2% Fibonacci corrective level at 1.1718, heading toward the 1.1795–1.1802 resistance level. Thus, the euro's advance may also continue today. However, the news background will be very strong today, so a decline in the euro is also possible.
The wave structure on the hourly chart remains simple and clear. The most recently completed downward wave failed to break the low of the previous wave, while the latest upward wave (which is still forming) broke above the previous peak. Thus, the trend has officially shifted to bullish. It would be hard to call it strong, but in recent weeks the bulls have regained confidence and begun attacking with renewed strength. The Fed's easing of monetary policy supports further growth of the euro, and the ECB is unlikely to create any problems for the single currency in the near term.
On Monday, the news background was very weak—only the report on changes in industrial production volumes in the euro area. Traders barely noticed this report, preferring instead to focus on Tuesday, when the economic calendar is bursting at the seams. None of the scheduled reports has been released yet today, but a huge amount of economic data will come out over the course of the day in both the EU and the U.S. Special attention should be paid to the Nonfarm Payrolls and U.S. unemployment rate reports, as these data have not been released since early October. The market has been waiting, the Fed has been waiting, and these figures will allow an assessment of the state of the U.S. labor market and help forecast future changes in FOMC monetary policy. Thus, during the first half of the day, price movements may remain relatively moderate, while in the second half, a "storm in the desert" may begin—"in the desert" because trader activity has been quite low in recent weeks. On Friday and Monday, prices barely moved at all. For the dollar, labor market and unemployment reports pose a real threat, but the overall trend remains bullish regardless.
On the 4-hour chart, the pair consolidated above the 1.1649–1.1680 resistance level. As a result, the growth process may continue toward the next Fibonacci level at 0.0% – 1.1829. A consolidation below the 1.1649–1.1680 level would again favor the U.S. dollar and lead to a decline toward the 38.2% corrective level at 1.1538. No emerging divergences are observed on any indicators today.
Commitments of Traders (COT) Report
During the latest reporting week, professional traders opened 8,041 long positions and closed 17,377 short positions. COT reports have resumed publication after the shutdown, but the data being released are still outdated—covering October and November. 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 now stands at 243,000, while short positions total 145,000.
For thirty-three consecutive weeks, large players have been reducing short positions and increasing longs. Donald Trump's policies remain the most significant factor for traders, as they could cause numerous problems with long-term and structural consequences for the U.S. economy. Despite the signing of several important trade agreements, analysts fear a recession in the U.S. economy, as well as a loss of Fed independence under pressure from Trump and against the backdrop of Jerome Powell's resignation in May next year.
News Calendar for the U.S. and the Euro Area
Euro Area
- Germany Manufacturing PMI (08:30 UTC)
- Germany Services PMI (08:30 UTC)
- Euro Area Manufacturing PMI (09:00 UTC)
- Euro Area Services PMI (09:00 UTC)
- Germany ZEW Economic Sentiment Index (10:00 UTC)
- Euro Area ZEW Economic Sentiment Index (10:00 UTC)
United States
- ADP Employment Change (13:15 UTC)
- Nonfarm Payrolls Change (13:30 UTC)
- Retail Sales Change (13:30 UTC)
- Unemployment Rate (13:30 UTC)
- Manufacturing PMI (14:45 UTC)
- Services PMI (14:45 UTC)
On December 16, the economic calendar contains twelve important events. The impact of the news flow on market sentiment on Tuesday will be extremely strong throughout the entire day.
EUR/USD Forecast and Trading Advice
Selling positions will become possible today if the pair closes below 1.1718 on the hourly chart, with a target at 1.1656. Long positions could be opened on a rebound from 1.1718, and today they can be held with a target at 1.1795–1.1802.
Fibonacci grids are drawn from 1.1392–1.1919 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.
