EUR/USD – 1H.
Yesterday, the EUR/USD pair worked out the corrective level of 127.2% (1.2067), bounced off it, and reversed in favor of the US currency, starting a fall in the direction of the Fibo level of 100.0% (1.1989). Thus, the bull traders have taken a short break, so the US dollar can slightly correct its deplorable situation. Although, for example, a downward trend persists on the daily chart, a new upward trend line has already formed on the 4-hour chart. That is, now a new long-term growth of the euro/dollar pair quotes can begin. That is, the euro currency will again become more expensive, as it did for most of 2020. What are the reasons?
Most of the world's analysts are now rushing from one factor to another. Some believe that the growth of the euro currency is associated with a fall in the yield of 10-year treasuries in the United States. Some believe that this is the result of a strong jump up in inflation. Some believe that this is a response to the inaction of the Fed, which does not want to wind down the QE program and raise rates in the near future. In my opinion, all these reasons are wrong. The Fed never promised to start tightening monetary policy in 2021. No one thought about the yield of 10-year treasuries at all until a couple of months ago. And although inflation is an important indicator, where have you seen such a thing that traders respond to one jump in inflation with weekly sales? I believe that the reasons for the fall of the US currency are much deeper (structural). After all, in recent years, since 2008, it was the European currency that was in the process of falling. That is, exactly 12 years. Perhaps the global trend is just changing now?
EUR/USD – 4H.
On the 4-hour chart, the bullish divergence of the CCI indicator allowed the pair to resume the increase and close above the corrective level of 161.8% (1.2027). Thus, the probability of further growth increases towards the next level of 1.2223. An upward trend line has also been formed, which also increases the likelihood of continued growth.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair came close to the corrective level of 323.6% (1.2080) and the descending trend line. If there is a rebound, this will work in favor of the US dollar and the resumption of the fall in the direction of the Fibo level of 261.8% (1.1822). Closing quotes above the trend line will significantly increase the probability of the pair continuing to grow in the direction of the level of 1.2496.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On April 20, the calendar of economic events in the European Union and the United States was empty. Thus, the information background did not have any impact on traders.
News calendar for the United States and the European Union:
On April 21, the calendars of economic events in the European Union and the United States are again empty. Thus, the information background will also be absent today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which turned out to be quite neutral. During the reporting week, Non-commercial traders opened 2,260 long contracts and closed 2,258 short contracts. Thus, the mood of speculators became again a little more bullish. Given that the pair are growing on the two youngest charts, everything is logical. Moreover, in general, speculators also remain bullish, as the number of long contracts focused on their hands still exceeds the number of short contracts. Not as much as before, but still exceeds.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair if there is a rebound from the level of 323.6% (1.2080) on the daily chart with a target of 1.1989. Purchases of the pair were recommended when closing above the level of 1.1989 on the hourly chart with targets of 1.2027 and 1.2067. Both goals have been achieved. Now I recommend buying the pair when closing above the trend line on the daily chart.
"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.