FX.co ★ Forecast for EUR/USD on April 14. COT report. US inflation hit the dollar.

EUR/USD – 1H.

During the last trading day, the EUR/USD pair fell to the corrective level of 61.8% (1.1881), a new rebound from this level, and resumed its upward movement, this time completing a close above the Fibo level of 76.4% (1.1922). Thus, the growth process can be continued in the direction of the next corrective level of 100.0% (1.1989). Three rebounds worked in favor of the European currency. Bear traders have shown their weakness at this time and their inability to fall below 1.1881. However, it is impossible not to note the huge influence of the information background on the pair. At least not yesterday. On Tuesday, the US released the inflation report for March. And the figures for this report were really impressive. Let me remind traders that the Fed, as well as the ECB, as well as the Bank of England, have long been striving for stable inflation of more than 2%. Reaching such a level of inflation for a long time (at least six months) is called one of the conditions for tightening monetary policy. Yesterday, it became known that in March, US inflation accelerated from 1.7% y/y to 2.6% y/y, which is even higher than forecasts. Thus, the US currency felt pressure due to this data. Why? Because inflation itself is a negative economic phenomenon. It devalues money and combined with the trillions of dollars that the US government has already successfully channeled into the economy, it could potentially weaken the US dollar even more, even without a sell-off by its traders. The second reason is that traders and investors fear that inflation in the United States may get out of control, as a lot of money has been spent on stimulating the economy. All of them will lead to higher prices.

EUR/USD – 4H.

On the 4-hour chart, after rebounding from the Fibo level of 127.2% (1.1729), the pair's quotes continue to grow in the direction of the corrective level of 161.8% (1.2027). Fixing the pair's rate above the level of 1.1836 increases the chances of further growth. A bearish divergence is brewing in the MACD indicator, which may allow us to count on a slight drop in quotes.

EUR/USD – Daily.

On the daily chart, the quotes of the EUR/USD pair consolidated above the corrective level of 261.8% (1.1822). Thus, the further fall of the pair is canceled for the time being, and instead, it can continue to grow in the direction of the Fibo level of 323.6% (1.2080). Closing below the level of 261.8% will again work in favor of the US dollar and resume falling in the direction of the Fibo level of 200.0% (1.1566).

EUR/USD – Weekly.

On the weekly chart, the EUR/USD pair has consolidated above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.

Overview of fundamentals:

On April 13, the European Union released only one index of sentiment in the business environment of the ZEW Institute, which did not attract the attention of traders.

News calendar for the United States and the European Union:

EU - change in industrial production (09:00 UTC).

EU - ECB President Christine Lagarde will deliver a speech (14:00 UTC).

US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (16:00 UTC).

On April 14, all the attention was on the speeches of Christine Lagarde and Jerome Powell. If the heads of central banks report something important, the reaction can follow immediately.

COT (Commitments of Traders) report:

Last Friday, another COT report was released, which turned out to be quite neutral this time. During the reporting week, Non-commercial traders closed 7,679 long contracts and 6,702 short contracts. Thus, the mood of speculators for the reporting week almost did not change. In total, in recent weeks, speculators have been getting rid of long contracts more and at the same time increasing short contracts. Thus, in general, their mood becomes more "bearish". Consequently, the COT reports allow us to conclude the possible continuation of the fall in quotes, however, the total number of long contracts focused on the hands of large players remains higher than the total number of short contracts. That is, the upward trend is not yet complete.

EUR/USD forecast and recommendations for traders:

I recommend selling the pair if there is a rebound from the level of 161.8% (1.2027) on the 4-hour chart with targets of 1.1922 and 1.1881. Purchases of the pair were recommended with a target of 1.1989 at the close above the level of 76.4% (1.1922) on the hourly chart. Now they can be kept open.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.