EUR/USD – 1H.
Hello, traders! On April 17, the euro/dollar pair performed a reversal in favor of the European currency and some growth. However, towards the end of the day, it performed a reversal in favor of the US dollar and resumed falling. Another reversal in favor of the US dollar allowed building a new downward trend line, which defines the current mood of traders as "bearish". Thus, the fall of quotes can be continued today. And closing the euro/dollar exchange rate above the trend line will work in favor of the euro and change the mood of traders to "bullish". As usual, there was little news in the world on Friday. Now the topic of future relations between the European Union, the USA and China are gaining momentum. The fact is that Donald Trump, Emmanuel Macron and some other leaders have already openly stated that they suspect China of deliberately spreading the infection or at least hiding information that led to the spread of COVID-2019 virus to almost the entire planet. America has launched an official investigation and stopped funding WHO.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes rebounded from the corrective level of 23.6% (1.0840), but they could not start the growth. As a result, on the morning of April 20, quotes again began returning to the corrective level of 23.6%. A new rebound of the pair's exchange rate from this level will again work in favor of the EU currency and resume growth in the direction of the corrective level of 38.2% (1.0964). Fixing the pair below the Fibo level of 23.6% will increase the probability of a further fall in the direction of the next corrective level of 0.0% (1.0638). Today, the divergence is not observed in any indicator.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair performed a fall to the Fibo level of 23.6% (1.0840). The Fibo level grids on the 4-hour and daily charts remain identical. The only thing is that the daily chart shows more clearly reversals and rebounds from important correction levels.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair continues to trade near the bottom line of the "narrowing triangle". The rebound of quotes from this line still allows us to expect an increase in quotes in the long term in the direction of the level of 1.1600 (the upper line of the "triangle"). Closing the pair under the "triangle" will work in favor of the US dollar and, possibly, a new long fall.
Overview of fundamentals:
On April 17, the European Union released the inflation rate for March. However, traders did not pay attention to this report. In America, no important economic data was published on this day.
News calendar for the United States and the European Union:
On April 18, the calendar of economic events of the European Union and the United States is empty. Traders today will have nothing to pay attention to.
COT (Commitments of Traders) report:
A new COT report was released on Friday. As I expected, it didn't show any major changes. Major market players were again engaged in reducing both long and short contracts. The first category lost 12,399 contracts during the week, while the second category lost 8,233. The increase was recorded only for long-term contracts with the "Non-commercial" group, i.e. speculators. However, these same speculators have been actively getting rid of short contracts in recent months, not believing that the dollar will become more expensive again. Thus, the overall advantage among large players remains on the side of short-contracts, but mainly due to hedgers. It is in the hands of hedgers that the largest number of contracts is concentrated. Over the past week, the number of short contracts has decreased in absolute terms, so the probability of a fall in the euro currency is reduced.
Forecast for EUR/USD and recommendations for traders:
At this time, I recommend waiting for consolidation under the level of 23.6% (1.0840) on the 4-hour chart and then sell the euro with the goal of 1.0638. I do not recommend buying a pair yet since there is not a single trading signal for this. Even the hang-up on the 4-hour chart does not look convincing. Closing quotes on the hourly chart above the trend line may allow you to buy euros.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.