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EUR/USD – 1H.
The EUR/USD pair continued the growth process on February 11, however, the rebound from the corrective level of 50.0% (1.2151) worked in favor of the US currency and began to fall in the direction of the Fibo level of 38.2% (1.2104). The consolidation of quotes under the level of 1.2104 will allow traders to count on the continuation of the fall in the direction of the next level of 23.6% (1.2046). There were very few interesting news and events during the past day. By and large, traders have "depicted" this lack of important information on the chart. The activity was minimal. But there was something. The European Commission has updated its GDP and inflation forecasts for the current and next years. Let me remind you that the last time the commission provided its forecasts was in November last year, and then it assumed that economic growth in 2021 would be 4.2%.
According to new data, the European economy will grow by 3.8% this year, and by the same amount next year. The European Commission also reported that the average annual inflation in 2021 will be no more than 1.4%, and next year - about 1.3%. As you can see, these figures are far from ideal, and the European Central Bank has repeatedly stated that it will not start raising the rate until inflation returns to the level of 2% or higher. Thus, Europe still faces a long road to recovery, which will depend on many factors, as Christine Lagarde said a day earlier. The ECB chairwoman believes that serious efforts will be required from the governments of all 27 EU countries, from private businesses, and EU citizens themselves. Lagarde insists that the 750 billion euro economic recovery fund be approved as soon as possible, and also calls on governments to spend more and invest in the economy. Against the background of this not very optimistic information, a pullback of the euro/dollar pair down may follow.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes completed a close above the descending trend line, so the mood of traders changed to "bullish". Thus, the growth process can be continued in the direction of the level of 1.2204. However, it is on this chart that you can see how weak the pair's movement is now. Today, the divergence is not observed in any of the indicators.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a breakdown of the lower border of the upward trend corridor, which turned out to be false. Therefore, at the moment, the pair has performed a reversal in favor of the euro and resumed the growth process in the direction of the corrective level of 423.6% (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 February 11, the US released a report on applications for unemployment benefits, which turned out to be slightly better than traders' expectations.
News calendar for the United States and the European Union:
US - consumer sentiment index from the University of Michigan (15:00 GMT).
On February 12, one report on the US consumer sentiment index will be released. We can say that the information background will be absent today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released. Let me remind you that the European currency has been losing ground over the past week. Therefore, the weakening of the "bullish" mood in the category of "Non-commercial" traders is quite understandable. However, speculators at the end of the reporting week closed as many as 23 thousand long contracts and at the same time increased 11 thousand short-contracts. Thus, their mood became more "bearish". Nevertheless, the growth of the euro currency quotes last Friday and at the beginning of this week indicates that speculators may have rushed with a massive sell-off of the euro.
Forecast for EUR/USD and recommendations for traders:
It was recommended to buy the euro currency with the targets of 1.2151 and 1.2197 on the hourly chart when closing quotes above the descending trend line on the 4-hour chart. The first goal is achieved. The second is to overcome the level of 1.2151. I do not recommend opening sales today.
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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