EUR/USD – 1H.
The EUR/USD pair performed a new fall on January 14, followed by a reversal in favor of the EU currency and new growth. All this occurred within the corrective levels of 76.4% and 100.0%. At the moment, the pair's quotes are again in the process of falling in the direction of the corrective level of 100.0% (1.2131). A rebound of the pair's rate from this level will again work in favor of the European currency, and a close below it will increase the chances of a further fall in the direction of the next Fibo level of 127.2% (1.2072). The most high-profile event of the day was the speech of Fed Chairman Jerome Powell. However, judging by the fact that the activity of traders yesterday was not excessive and there were no sharp and strong movements in the evening, we can conclude that Powell said a few really important things. His speech was also not announced as global, it was just an interview with a professor at Princeton University. And in this interview, Powell noted that soft monetary policy will continue until the results are visible and the goals are achieved. The Fed chairman also said that an increase in interest rates will not happen very soon, and the economy is still too far from pre-crisis levels. That's all Powell said about monetary policy. Not surprisingly, traders did not react to this information, which they already knew and which was obvious. There is no new news about the impeachment of Donald Trump.
EUR / USD – 4H.
On the 4-hour chart, the pair's quotes closed under the upward trend line. Thus, the decline in quotes continues in the direction of the corrective level of 161.8% (1.2027). The pair's rebound from this level will allow traders to expect a reversal in favor of the European currency and some growth in the direction of the Fibo level of 200.0% (1.2353). The emerging bullish divergence can also work in favor of the beginning of the pair's growth.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair began the process of returning to the corrective level of 323.6% (1.2079). The pair's rebound from this level will work in favor of the EU currency and the resumption of growth in the direction of the Fibo level of 423.6% (1.2496). Closing below it will increase the chances of a further drop in quotes to the lower border of the upward trend corridor.
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 in the long term.
Overview of fundamentals:
On January 14, the US released a report on applications for unemployment benefits, which turned out to be significantly worse than traders' expectations.
News calendar for the United States and the European Union:
US - retail trade volume change (13:30 GMT).
US - change in industrial production (14:15 GMT).
US - consumer sentiment index from the University of Michigan (15:00 GMT).
On January 15, reports on retail trade and industrial production will be released in America. If the changes are significant, then the reaction of traders to them is not excluded.
COT (Commitments of Traders) report:
The activity of major players in the New Year's week was very weak. The "Non-commercial" category of traders, according to the latest COT report of January 5, opened 2,072 long contracts and 3,078 short contracts. That is, approximately the same amount. The same applies to the "Commercial" category of traders and the total number of open long and short contracts. First, these figures are very low, and second, without a serious bias in any direction. Simply put, speculators in the New Year rested and celebrated more than they made transactions in the foreign exchange market. Thus, there are no special changes following the results of the next week. The mood of traders remains "bullish". A couple of months ago, the beginnings of a new downward trend appeared, however, the weakness of the dollar did not allow this option to be realized.
Forecast for EUR/USD and recommendations to traders:
On Thursday, I recommend buying the euro currency with targets of 1.2182 and 1.2214 on the hourly chart, if the rebound from the level of 100.0% (1.2131) is made. New sales of the pair can be opened with a target of 1.2072 at the repeated closing of quotes under the level of 100.0% (1.2131) 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 to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.