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EUR/USD – 1H.
During the last trading day, the EUR/USD pair rebounded from the corrective level of 100.0% (1.1989), a reversal in favor of the US currency, and began a new process of falling in the direction of the Fibo level of 76.4% (1.1922). Only the closing of the pair's rate above the level of 100.0% will work in favor of resuming growth. The key event of last Friday was undoubtedly the report on inflation in the European Union. Let me remind you that both the central banks of the Fed and the ECB are striving to accelerate inflation to a value of 2.0% y/y or higher. However, until recently, none of them managed to achieve this. Only at the end of March in the United States, inflation accelerated to 2.6%, which traders perceived negatively by the sell-off of the dollar. On Friday, it became known that inflation in the EU also accelerated slightly, but much weaker than in the US - from only 0.9% y/y to 1.3% y/y.
However, core inflation, that is, the indicator excluding changes in food and fuel prices, slowed from 1.1% y/y to 0.9% y/y. In general, the growth of the main indicator was caused by the most volatile food and fuel. Thus, it is just about the acceleration of general inflation that we should not talk about now. Since prices in March could have increased, for example, for oil or gasoline, but this does not mean that all prices for all goods were growing. But this is exactly the effect that the ECB wants to achieve. In general, it is still too early for Europe to chase America. First, you need to solve the problems with the coronavirus and vaccination. Let me remind you that in the United States, vaccination is proceeding at a high rate, which affects the mood of the Americans themselves, who are beginning to feel more relaxed and start spending money, and the economy, meanwhile, is recovering. In the European Union, this is not observed, so inflation is not growing. In many countries, the third wave of the pandemic has begun.
EUR/USD – 4H.
On the 4-hour chart, the bearish divergence of the MACD indicator allowed the pair to start the process of falling, however, the bullish divergence formed a few hours later again allows us to count on growth. Closing the pair's quotes above the level of 161.8% (1.2027) will increase the probability of further growth towards the next level of 1.2223. I propose to focus now on the level of 1.1989 on the hourly chart.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair consolidated above the corrective level of 261.8% (1.1822). Thus, the further fall of the pair is canceled for the time being, and instead, it can continue to grow in the direction of the Fibo level of 323.6% (1.2080). The rebound of quotes from the trend line will allow us to count on a new reversal in favor of the US currency and a slight drop in the direction of the level of 261.8%.
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 April 16, the European Union released only an inflation report, and in the United States - the consumer sentiment index from the University of Michigan, which also did not have much impact on the mood of traders.
News calendar for the United States and the European Union:
On April 19, in the European Union and the United States, the calendars of economic events were almost empty. Thus, the information background will be absent today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which turned out to be quite neutral. During the reporting week, Non-commercial traders opened 2,260 long contracts and closed 2,258 short contracts. Thus, the mood of speculators became again a little more bullish. Given that the pair are growing on the two youngest charts, everything is logical. Moreover, in general, speculators also remain bullish, as the number of Long contracts focused on their hands still exceeds the number of short contracts. Not as much as before, but still exceeds.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair if there is a rebound from the level of 161.8% (1.2027) on the 4-hour chart with targets of 1.1922 and 1.1881. I recommend buying the pair when closing above the level of 1.1989 on the hourly chart with targets of 1.2027 and 1.2067.
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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