EUR/USD 1H
The EUR/USD pair continued to move up on the hourly timeframe on Friday, November 27. It looks impressive in the chart, but in fact it is not so strong. The pair's volatility is still rather low, but the rising movement seems assertive. A new upward channel appeared, within which the price is now moving. Thus, the initiative is now in the bulls' hands, as they continue to push the pair to the upside. However, we are still inclined to believe that the current upward movement is not justified. There is no particular reason for the euro to increase in price now. Moreover, most of the factors speak in favor of the fact that the euro should fall in price. Therefore, we do not believe that buyers will be able to move the pair above the 1.2000 psychological level. Bears should be on the alert and immediately attack if the price settles below the rising channel. We believe that the current levels are very attractive for selling the pair. Moreover, after rising by 1300 points in 2020, the US dollar has not normally corrected.
EUR/USD 15M
Both linear regression channels are directed to the upside on the 15-minute timeframe. The nearest target is the 1.1976 level. Thus, so far the lower chart does not provide any reason to expect that the short-term upward trend would end.
COT report
The EUR/USD pair fell by 10 points in the last reporting week (November 17-23). That is, the price changes were again minimal. This indicates a low activity from traders, primarily large traders, whose deals are displayed in the Commitment of Traders (COT) reports. What did the new report show us? Very little. As in the previous week, professional traders opened a small number of new contracts during the week, only about 3,700. Considering that the total number of contracts for the "non-commercial" group is more than 300,000, this means that 3,700 is only about 1%. There is absolutely nothing to say about the mood of the major players. There were 700 more Buy-contracts (longs) that were opened compared to Sell-contracts (shorts). As you can imagine, these changes do not allow us to conclude that the mood of professional traders has sharply become more bullish or bearish. The net position remained practically unchanged. Thus, as a result, we can say that there are practically no changes, and the general picture of the state of affairs remains the same. That is, the data from the COT reports still leaves a high probability that the upward trend was completed near the 1.2000 level. Even despite the fact that now the pair's quotes have come close to this level. Nevertheless, the first indicator shows the movement of green and red lines towards each other (net positions of commercial and non-commercial traders), which means that the euro should be depreciating, and the previous trend is over. The net position of non-commercial traders (second indicator) has been signaling a decline for several months now. This means that major players are looking more and more towards selling the euro.
No important reports or events from the European Union and America on Friday. There was only a general fundamental background for the EUR/USD pair. But it did not have any particular impact on the mood of traders. There is practically no news from America now. There has been
news from the European Union, but market participants ignore those. It seems that only a few players have been pushing the market to the upside, and the rest do not understand what is happening.
European Central Bank President Christine Lagarde will give a speech on Monday, aside from that, no other events listed in the calendar. Thus, everything will depend on what exactly Lagarde will say. Based on her last speeches, we can conclude that she will not say anything optimistic. However, judging by the fact that the euro is getting more expensive again, the markets do not need optimistic statements. The European economy may face serious problems in the near future due to the second wave of COVID-2019 and the lockdown, but traders do not care about this fact at all. Even the threat of a conflict between the EU members does not frighten traders and does not discourage them from buying euros at this time.
We have two trading ideas for November 30:
1) Buyers continue to move up after breaking through the resistance area of 1.1886-1.1912. Therefore, you are advised to continue trading upward with the targets at the resistance levels of 1.1976 and 1.2011 as long as the price is within the rising channel. Take Profit in this case will be no more than 45 points.
2) Bears are letting go of the pair more and more every day, nevertheless, the current fundamental background allows them to count on the pair's reversal to the downside soon. Thus, you are advised to open new sell orders while aiming for the Kijun-sen line (1.1881), in case the price settles below the rising channel. Take Profit in this case can be up to 45 points.
Forecast and trading signals for GBP/USD
Explanations for illustrations:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.