EUR/USD – 1H.
On October 30, the EUR/USD pair performed a new consolidation under the corrective level of 76.4% (1.1676) and resumed the process of falling in the direction of the corrective level of 100.0% (1.1612). The rebound of quotes from this level will allow traders to count on a reversal in favor of the EU currency and some growth in the direction of 1.1676. Closing the pair's exchange rate under the 100.0% Fibo level will increase the chances of a further fall towards the next corrective level of 127.2% (1.1539). The euro currency, meanwhile, continues to fall despite the upcoming presidential elections in the United States (in fact, tomorrow). That is, the dollar is getting more expensive. Bear traders who haven't shown much desire to trade in the past three months abruptly started opening new sell orders a week before the election. So I can't say that traders are afraid of the election or its consequences. Most likely, the reason lies in the European Union. First of all, last week there was a speech by Christine Lagarde, who was very pessimistic. Secondly, the EU countries have started to close for "lockdowns", and this means an inevitable new contraction of the economy. Third, there are indeed high levels of disease in the European Union, and it is still unclear when it will be possible to cope with the COVID virus. After all, the coldest time of the year is still ahead. Thus, traders can get rid of the European currency in recent days. However, what will happen tomorrow or the day after tomorrow with the US dollar?
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes were fixed under the side corridor. Thus, the probability of a further fall in the direction of the corrective level of 100.0% (1.1496) increased. The lower chart also supports this scenario. I recommend paying more attention to the lower chart, since the 4-hour corrective levels are located quite far from each other.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes performed a new rebound from the corrective level of 261.8% (1.1825), after which the quotes continue to fall in the direction of the Fibo level of 200.0% (1.1566). Closing the pair's exchange rate below this level will work in favor of a further drop in quotes towards the level of 161.8% (1.1405).
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, but in the long term. In the short term, a drop is preferable.
Overview of fundamentals:
On October 30, the European Union released a report on GDP for the third quarter, which showed an increase greater than expected by traders, 12.7% q/q. However, the unemployment rate also increased, to 8.3%, and the consumer price index remained at an unprecedented low level, -0.3% y/y.
News calendar for the United States and the European Union:
EU - index of business activity in the manufacturing sector (09:00 GMT).
US - ISM manufacturing index (15:00 GMT).
On November 2, the US and the European Union will release indices of business activity in the manufacturing sectors. However, this information may not be very interesting for traders. Now there are many more important events and news.
COT (Commitments of Traders) report:
The latest COT report was quite informative. The most important category of non-commercial traders got rid of 12 thousand long contracts and 1 thousand short contracts during the reporting week. Thus, speculators do not believe in the further growth of the European currency and get rid of more purchases of this currency. This process, I must say, has been going on for several weeks, so a trend is emerging. Over the past two months, the total number of long contracts in the hands of speculators has been steadily falling, while the number of short contracts has been growing slightly. Thus, I am inclined to the option with a further fall in the euro currency quotes.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend keeping open sales of the euro currency with a target of 1.1612. And if there is a close below this level, then the target is the Fibo level of 127.2% (1.1539). Purchases of the pair will be possible with a target of 1.1676 if the quotes perform a rebound from the level of 100.0% 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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.