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EUR/USD – 1H.
On December 30, the EUR/USD pair continued the growth process to the corrective level of 323.6% (1.2308). The rebound of quotes from this level allows traders to count on a reversal in favor of the US currency and some fall in the direction of the level of 1.2272 and the ascending trend line, which continues to characterize the current mood of traders as "bullish". The closing of the pair's rate under the trend line will work in favor of the US currency. Meanwhile, the most interesting events are happening now in America. Several rather significant events have taken place over the past week. At first, Donald Trump refused to sign the budget for 2021 and the package of assistance to the economy. Then he signed these documents. And then blocked the defense budget by 2021, to impose the veto on it. Then the US Congress voted "for" an additional package of assistance to Americans and the unemployed, which implies an increase in the amount of payments provided for by the basic package from $ 600 to $ 2,000. Then the US Congress voted "for" the defense budget. And on January 1, the US Senate will meet to vote on the defense budget. If 2/3 of senators vote "yes", then Trump's veto will be overturned. And this will be the first time in all 4 years of Trump's presidency when the Senate and Congress openly go against his will and override his veto. However, Trump will leave his post on January 20 anyway. He did not manage to do anything with the "completely rigged" elections. Therefore, senators and congressmen need to think about the future without Trump. The US currency reacts very painfully to these events and continues to fall.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a reversal in favor of the euro and continued the weak growth process in the direction of the corrective level of 200.0% (1.2353). The pair's rebound from this level will work in favor of the US dollar and the beginning of the fall in the direction of the upward trend line. The brewing "bearish" divergence warns about the possible beginning of a fall in quotes.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair continue the process of growth in the direction of the corrective level of 423.6% (1.2495). Until the moment when the pair makes a consolidation under the level of 323.6%, there are still high chances of growth.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On December 30, there was no single important news or report in the United States and the European Union. There was no information background. Events unfold only in the US Congress and Senate, where deputies adopt several important documents and budgets at the end of the year.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
One report will be released in America on December 31. The information background will be weak today.
COT (Commitments of Traders) report:
The latest COT report from December 15 showed a sharp increase in the number of open short contracts by the "Non-commercial" category of traders, which is considered the most important. Before that, speculators had been building up long contracts for four weeks. And now the new COT report, which was released only today, again shows the build-up of long contracts by speculators. This means that they are once again beginning to believe in the European currency, which has only been growing in recent months. The total number of long contracts focused on the hands of large players is 224 thousand, which is three times more than the number of short-contracts. Since speculators do not currently reduce the number of long contracts and do not increase the number of short ones, I conclude that the euro may grow further. However, let me remind you that each COT report is released three days late, and also describes changes that have already occurred.
EUR/USD forecast and recommendations for traders:
On Thursday, I recommend selling the euro in case of a rebound from the level of 323.6% (1.2308) on the hourly chart with targets of 1.2272 and 1.2150. New purchases of the pair can be opened with a target of 1.2353 when the quotes are fixed above the level of 1.2308 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 to ensure 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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