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EUR/USD – 1H.
The EUR/USD pair fell to the corrective level of 100.0% (1.1990) during the last trading day, although the pair fell by 20 points. The activity of traders was very weak yesterday. Fixing the pair's quotes below the level of 100.0% will allow us to count on the continuation of the fall in the direction of the next corrective level of 76.4% (1.1923). The lack of consolidation will favor the European currency and some growth in the direction of the corrective level of 127.2% (1.2068). The information background of yesterday failed to impress traders. All day, they discussed the words of Janet Yellen, who said that the Fed would probably have to raise interest rates slightly, given the trillions of dollars of aid, to prevent the economy from overheating. A few hours after this statement, the Minister of Finance said that she was not completely understood, and she in no case makes a recommendation to the Fed and does not believe that rates will rise in the near future. It is noteworthy that the traders themselves almost did not react to these two statements of Yellen. The reaction was minimal, no more than 20-30 points. However, all day yesterday, Yellen's words were the number 1 topic for traders. In addition, in the US yesterday, a fairly important ADP report was released on the change in the number of Americans employed in the private sector, which amounted to 742,000 in April. An ambiguous value because the forecast was 872,000, and the March value was 565,000. The real value for April was between them. The index of business activity in the ISM services sector in America was slightly worse than traders' expectations, so the US dollar fell slightly when this report was released. However, in general, the pair was trading in a narrow range yesterday, as shown on the chart. Therefore, the information background had a very small impact on the mood of traders.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a reversal in favor of the US dollar and closed under the ascending trend line and the Fibo level of 161.8% (1.2027). Thus, the process of falling can now be continued in the direction of the level of 1.1836. There are no emerging divergences in any indicator today. The most accurate picture of what is happening is on this chart.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes closed at the level of 161.8% (1.2027). But even with this consolidation, the current picture has not become clearer and easier. Thus, I recommend paying more attention to the 4-hour schedule for the time being, where the picture is most clear and understandable.
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 May 5, several reports were released in the European Union and America in both the United States and the European Union. However, judging by the movement of the euro/dollar pair, traders are not too interested in the published data.
News calendar for the United States and the European Union:
EU - retail trade volume change (09:00 UTC).
EU - ECB President Christine Lagarde will deliver a speech (11:25 UTC).
US - number of initial applications for unemployment benefits (12-30 UTC).
On May 6, the most interesting event of the day will be the speech of ECB President Christine Lagarde. But everything will depend on what it tells the traders.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which again showed that the "bullish" mood of the major players is increasing, which means that the European currency gets new opportunities to continue the growth process. The number of new long contracts opened by the "Non-commercial" category of traders is 5,568, and the number of short contracts is 2,938. Thus, the "bullish" mood of this category of traders has increased, but not too much. Let me remind you that since the beginning of this year, the gap between the total number of long and short contracts among speculators has been decreasing, which indicates a weakening of the "bullish" mood. But it has steadily increased in the last three weeks.
EUR/USD forecast and recommendations for traders:
I recommended selling the pair if the closing is made under the trend line on the 4-hour chart with the targets of 1.1990 and 1.1923. The first level is reached. If it is overcome, then we sell the pair with a target of 1.1923. I recommend buying the pair today if the rebound from the level of 100.0% (1.1990) on the hourly chart with the target of 1.2068 is made.
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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