EUR/USD – 1H.
Hello, traders! As seen on the hourly chart, the euro/dollar pair was trading with a mostly sideways bias on Friday. The pair's quotes did not perform a reversal in favor of the US dollar and did not begin the process of falling to the upward trend line, but could not continue to grow. Thus, the "bullish" mood of most traders remains, but a pause has been taken, which may last for several days. The reason is the celebration of Easter in many countries of the world. Today, for example, it is Easter Monday and there will be no economic reports. There was also little news on Friday. By and large, traders continued to discuss new aid packages for the US and European economies and what effects they would have. And of course, the topic is the epidemic of the COVID-2019 virus. The total number of cases is steadily approaching 2 million.
EUR/USD – 4H.
On the 4-hour chart, it is more clearly seen that on Friday, trading took place in a very narrow side corridor. I did not put this corridor on the chart, because it is really very small. Despite the formation of a bearish divergence, the pair's quotes did not perform a reversal in favor of the US currency and did not begin the process of falling in the direction of the corrective level of 23.6% (1.0840). At the same time, there was no rebound from the Fibo level of 38.2% (1.0964), which the pair was near on Friday, and is still there. Thus, there is no new signal at the moment. Fixing the pair's exchange rate above the Fibo level of 38.2% will work in favor of the EU currency and resume the growth process towards the next corrective level of 50.0% (1.1065). This will also mean an increase in the activity of traders.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair continues the growth in the direction of the corrective level of 38.2% (1.0965) and risks rebounding from this level. The picture remains identical to the 4-hour chart, since the same grid of Fibo levels is in effect. The only thing is that the 4-hour chart shows better the weakness of the movement in recent days.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair continues to trade near the lower line of the "narrowing triangle". The rebound of quotes from the lower line of the "triangle" allows traders to count on the growth of quotes in the long term in the direction of the level of 1.1600 (the upper line of the "triangle"). Closing under the "triangle" will work in favor of the US currency and, possibly, a new long fall.
Overview of fundamentals:
On April 10, US inflation reports were released. The consumer price index fell to 1.5% y/y in March, while the consumer price index excluding food and energy prices fell to 2.1% y/y. Traders' expectations were higher, but there was no reaction to these reports - Good Friday.
News calendar for the United States and the European Union:
The European Union - Easter Monday.
On April 13, the EU and US news calendar does not contain anything interesting. In Europe, today is Easter Monday. Trader's activity is likely to be at a very low level again.
COT (Commitments of Traders) report:
On Friday afternoon, a new COT report was released, which turned out to be very interesting. First, I again note a reduction in the total number of short and long contracts among major market players. Short - 29,000; Long -18,000. Thus, among the major market players, of which there are currently 255, according to the COT report, there is a desire to close contracts rather than enter into new ones. Second, the large speculators did not close the contracts. There is a slight increase in this group. But hedgers were getting rid of both categories of contracts. Thus, in the week before April 7, the number of long contracts decreased by more than short. The total number of contracts remains overweight for short: 568,000-529,000. The growth of the euro/dollar pair began just on April 7, before this day there was a drop. Thus, the data of the COT report and what is happening in the market are the same.
Forecast for EUR/USD and recommendations for traders:
Now I recommend being careful with the new sales of the euro currency, as there are no signals yet. I recommend selling the euro currency again when the quotes break off from the level of 38.2% (1.0964) or when closing below the trend line on the hourly chart with the goal of 1.0840. I recommend buying the pair at the close above the level of 38.2% with a target of 1.1065.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
