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EUR/USD – 1H.
On February 4, the EUR/USD pair resumed the decline in quotes and secured a corrective level of 161.8% (1.1997). Thus, the probability of a further fall in the pair's quotes in the direction of the next Fibo level of 200.0% (1.1913) has increased. The downward trend corridor characterizes the current mood of traders as "bearish". I would draw the attention of traders only to the data on applications for unemployment benefits. Their number was 779 thousand in the reporting week, which is less than traders' expectations. Thus, there is no reason to assume that unemployment in America has started to rise. Today, economic reports will be in the first place among traders. Just today, the official unemployment rate for January will be released, as well as the even more important Nonfarm Payrolls report, which shows how many new jobs were created, not counting the agricultural sector. The previous value was a failed -140 thousand. Today, an increase of 77 thousand is expected. Thus, strong NonFarms can support the demand for the US currency, which is doing just fine in 2021, and it's even unclear how it fell for such a long time in 2020. Most of the charts now show excellent prospects for the dollar. Also today, a report on wages will be released, however, it will be much less important than the first two reports. Even the unemployment rate, which is projected at 6.7%, is unlikely to cause a reaction from traders if its actual value does not differ from expectations.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a consolidation under the Fibo level of 161.8% (1.2027). Thus, the process of falling can now be continued in the direction of the next corrective level of 127.2% (1.1729). The new downward trend line now also characterizes the mood of most traders as "bearish". Only the closing of quotes above it will allow traders to count on the growth of the pair in the medium term.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair closed under the lower border of the upward trend corridor. Thus, the third chart also indicates a very likely drop in the pair's quotes in the near future, in the direction of the corrective level of 261.8% (1.1822).
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 February 4, the calendar of economic events in the European Union was empty. In the US, there was only one report. In general, the information background of this day was almost zero.
News calendar for the United States and the European Union:
US - unemployment rate (13:30 GMT).
US - change in the number of people employed in the non-agricultural sector (13:30 GMT).
US - change in the average hourly wage (13:30 GMT).
On February 5, the EU economic calendar is empty, and the US will release three important reports, the most interesting of which is NonFarm Payrolls.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which was intended to help answer the question, what are the prospects for the euro currency? At the beginning of 2021 (in its first month), the quotes of the euro currency fell more than they grew. However, as 3 out of 4 COT reports show during this time, the "Non-commercial" category of traders is once again increasing the number of long contracts on their hands. This means that speculators continue to believe in the growth of the euro currency. During the last reporting week, major players opened more than 3 thousand long contracts and closed more than 1 thousand short contracts. Thus, their mood was again more "bullish" than a week earlier. Are we waiting for the new growth of the European currency?
Forecast for EUR/USD and recommendations for traders:
It is recommended to buy the euro currency with the targets of 1.2072 and 1.2131 on the hourly chart when closing above the downtrend corridor. It was recommended to open sales at the close below the level of 1.1997 with a target of 1.1913 on the hourly chart. Now, this deal can be supported.
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.
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