EUR/USD – 1H.
Hi, dear traders!
Yesterday, EUR/USD fell during the night and pushed new yearly lows, but reversed upwards towards the retracement level of 161.8% (1.1357) in the afternoon. A bounce off this level would resume the downward movement for the price. Earlier, EUR/USD closed below the downward channel, but remains within its boundaries, indicating a bearish trend. If the pair closes above the level of 1.1357, continuing upward movement towards the 1.1450 level would be possible. Yesterday was short on news, asides from two speeches by ECB president Christine Lagarde and the eurozone inflation data. The CPI in Euro countries reached 4.1% year-on-year in October, matching market expectations. Lagarde's speeches had no new information for traders.
There were no notable events in the US yesterday. Today is set to be a quiet day on the economic calendar as well, both in the US and the EU. The euro could undergo a correction today or on Friday. However, the European currency is being pushed down on expectations of US monetary tightening in December.
EUR/USD – 4H
According to the 4-hour chart, the quote has consolidated below the retracement level of 127.2% (1.1404). It may resume sliding down towards the next retracement level of 161.8% (1.1148). Today, the indicators show no sign of emerging divergences. A bounce of the level of 161.8% could lead to an upward reversal and some modest growth towards the 1.1404 level. If the pair closes below the 1.1404 level, it could decline further towards the next Fibonacci level of 200.0% (1.0865).
US/EU economic calendar:
US - Report on unemployment claims and continuing claims (13-30 UTC)
The US unemployment data is unlikely to influence the pair.
COT (Commitment of Traders) report:
The latest COT report indicates an increasingly bearish mood among Non-commercial traders. 1,627 Long positions were opened, and 11,328 Short positions were closed. The overall amount of Long positions fell to 193,000, while Short positions declined to 188,000. There has been no clear sentiment among traders in the last 2 weeks, despite the growing bearish trend over the last several months. The weakening Euro could indicate this downtrend would continue.
Outlook for EUR/USD:
Traders are recommended to sell the pair if it closes below the 1.1357 level on the 1-hour chart, with the target being 1.1250. Currently, these long positions can be left open. Long positions could be opened if EUR/USD bounces off the 1.1250 level on the 1-hour chart, with the target being 1.1357. Traders could also buy the pair if it closes above the level of 1.1357, with the target being 1.1450.
Non-commercial traders are major market players: banks, hedge funds, investment funds, and large private investors.
Commercial traders are commercial enterprises, firms, banks, corporations, companies that buy currency not to obtain profit, but to maintain current activities or import-export operations.
The category of non-reportable positions includes small traders who do not have a significant impact on the price.