EUR/USD – 1H.
On March 3, the EUR/USD pair increased to the corrective level of 50.0% (1.2097), a rebound from it and a reversal in favor of the US currency with the beginning of a fall in the direction of the corrective level of 76.4% (1.2021). A downward trend corridor was also constructed, which characterizes the current mood of traders as "bearish". Although the US currency has stopped in its strong growth, the hype with the growth of US government bond yields does not stop. More traders and analysts "blame" the growth in the yield of US treasuries for the growth of the US currency, which is not particularly visible on the older charts. I am hinting that the dollar's growth was quite weak if you look at it on the 4-hour chart or the daily chart.
Thus, it seems that this topic with profitability remains quite important. However, at the same time, it looks more like an explanation of what is happening, rather than a reason. During his speech, the Fed chairman will not be able to ignore the topic of rising treasury yields, so he will comment on it. In his earlier speeches, there was no mention of what the government and the Fed were worried about. Let me remind you that the yield on ten-year bonds at the moment is almost 1.5%, and this is the maximum value for the last year. However, let me remind you that this year was extremely difficult. Many indices, stocks, instruments, and currencies were in an unusual movement for themselves. Now the economy is recovering at the expense of trillions of dollars poured into it, so the treasuries are growing. It is worth recalling that before the crisis in 2019, their yield was 2%, and no one panicked about this. In general, the main question for Thursday is: will the Fed sound the alarm and declare the need to establish control over the bond yield curve?
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes rebounded from the corrective level of 161.8% (1.2027), which now allows us to count on growth in the direction of the level of 1.2223. However, at the moment, the pair is in the process of returning to the level of 1.2027. A new rebound from it will again work in favor of the EU currency and some growth. Closing the pair's rate at 1.2027 will increase the probability of continuing the fall in the direction of the Fibo level of 127.2% (1.1729).
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed the third breakdown of the lower border of the upward trend corridor, and this time it does not look false. Thus, the fall in quotes can be continued in the direction of the corrective level of 261.8% (1.1822). The descending trend line characterizes the mood of traders as "bearish".
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 March 3, in the US, reports from ADP and ISM business activity were very weak, which did not prevent the dollar from rising slightly in price again.
News calendar for the United States and the European Union:
EU - retail trade volume change (10:00 GMT).
EU - unemployment rate (10:00 GMT).
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (17:05 GMT).
On March 4, retail trade data will be released in the European Union, and an important speech by the Fed Chairman will be held in the United States.
COT (Commitments of Traders) report:
Last Friday, the next COT report was released and for the third week in a row, it turns out to be very calm. There are no major changes in the mood of traders. The most important category of Non-commercial traders opened 6.5 thousand long and 6.6 thousand short contracts. The "Commercial" category of traders opened 15 thousand long and 17 thousand short contracts. That is, in general, during the reporting week, the major players made purchases and sales in equal proportions. In the long term, the euro continues to show growth, and the number of long contracts focused on the hands of speculators exceeds the number of short contracts by three times. Therefore, to break the upward trend, it is necessary that speculators massively open sales, which is not yet observed.
EUR/USD forecast and recommendations for traders:
It was recommended to sell the pair when the quotes rebound from the level of 1.2104 with a target of 1.2046 on the hourly chart. This goal was achieved. I do not recommend new sales of the pair today. I recommend new purchases of the pair when closing above the downward trend corridor on the hourly chart with targets of 1.2097 and 1.2132.
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.