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EUR/USD – 1H.
On October 14, the EUR/USD pair returned to the corrective level of 38.2% (1.1765) and rebounded from it. Thus, the current graphical picture suggests a further fall in the pair's quotes in the direction of the corrective level of 23.6% (1.1707). The information background of recent weeks is so complex that traders simply cannot decide on medium and long-term prospects. The 4-hour chart clearly shows that trading takes place in a sideways corridor and the pair only occasionally tries to start a trend. However, these attempts very quickly come to naught. The problem is that in three weeks it may become known about the change of power in the United States. On November 3, both the presidential elections and elections to the Senate will be held. And the result of these elections may be a change not only of the top authorities but also of the power in the Senate. Naturally, we are talking about the loss of power by the Republicans. According to the latest opinion poll that can be trusted, Joe Biden increased the margin over Donald Trump to 17%. Currently, 57% of Americans are ready to vote for Biden. There has not been such strong support from the electorate for one of the candidates for a very long time. So, at the moment, it is 90% likely that Joe Biden will become the new president. However, knowing Trump, Americans believe that he can make the election process and the transfer of power as difficult as possible. In any case, there will be some "surprises". And because of this, the US currency is growing very reluctantly.
EUR/USD – 4H.
On a 4-hour chart, the graphic picture remains very boring. The pair's quotes have returned to the side corridor and continue to trade inside it. From the lower border of this corridor, a rebound was made twice in the last month and 3 times in the last week from the corrective level of 127.2% (1.1729). At this time, the pair's quotes have returned to the level of 127.2%, thus, a new rebound from it will again work in favor of the European currency and some growth in the direction of the upper line of the side corridor.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a rebound from the Fibo level of 261.8% (1.1825) and a reversal in favor of the US currency. Thus, now traders can expect a new process of falling in the direction of the corrective level of 200.0% (1.1566).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has consolidated above the "narrowing triangle", which now allows us to count on further growth of the euro currency, which may be strong, but in the long term.
Overview of fundamentals:
On October 14, the European Union released a report on industrial production for August, which almost completely coincided with traders' expectations. Christine Lagarde's speech this time did not provide any new information. The activity of traders remains quite low in recent days.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
EU - ECB President Christine Lagarde will deliver a speech (16:00 GMT).
Another speech by ECB President Christine Lagarde is scheduled for October 15 in the European Union, and a report on applications for unemployment benefits will be released in the US.
COT (Commitments of Traders) report:
The latest COT report was quite informative. The most significant and important category of "Non-commercial" traders continues to get rid of long contracts, closing almost 11 thousand during the reporting week. Also, about 2 thousand short-contacts were opened, thus, the mood of major players concerning the European currency has become much more "bearish". However, in general, I can't say that in recent months the major players have started to look in the direction of selling off the euro. Since the beginning of August, the total number of long contracts in the hands of speculators has been decreasing, however, the total number of short contracts is also decreasing. In total, there are four times more long-contracts in the hands of Non-commercial than short contracts. Thus, I would say that the chances of the continued growth of the European currency are still high.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1612, if the close is made under the level of 23.6% (1.1707) on the hourly chart. Purchases of the pair today will be possible with a target of 1.1812 if the quotes close above the level of 38.2% (1.1765) on the hourly chart.
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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
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