EUR/USD – 1H.
Hi, dear trader! On March 12, EUR/USD was trading in favor of the US currency, developing a further downtrend. The price closed below the upward trend channel which used to keep the bullish trading sentiment. Thus, the currency pair could continue its decline towards 1.1873 which is 127.2% fibo correction. The reason behind such developments is that traders were again alarmed by a spike in yields of 10-year US Treasuries. Besides, there is something that is dragging EUR down in recent weeks. The thing is that a new grim pandemic crisis is looming over Europe. The third coronavirus wave is about to emerge in the EU. Whereas 30-40% of the population has been vaccinated in the UK and Israel, the EU has provided only 11 million people with two jabs out of 450 million. The supplies have been disrupted as AstraZeneca have not met its commitment under the contract.
Until the end of March, the pharmaceutical company should have been supplied almost 40 million doses of the vaccine to the EU. However, it managed to deliver just a quarter of the volume set out under the contract. Other companies are also behind schedule. Therefore, the EU is facing a deficit of vaccines. Some EU countries are forced to buy a vaccine from China or Russia that was hard to believe a few months ago. Moreover, some countries complain about uneven and unfair distribution of vaccines produced in the EU among members of the euro block. On top of that, France threatened to abandon the Union unless the situation with the coronavirus and vaccination is not settled. The European Commission allows EU countries to buy the vaccine wherever they find appropriate. However, it is governments of those countries who take responsibility. Unfortunately, some people have fallen prey to the vaccine by AstraZeneca. They died after being vaccinated. As a result, this vaccine has been suspended in Denmark, Norway, and Iceland.
EUR/USD – 4H.
In the 4-hour chart, after having formed a bearish divergence by the CCI indicator, the price reversed in favor of the US dollar. So, EUR/USD extended a decline towards 1.1729 that is 127.2% fibo correction. If the price fixes above 1.2027 or 161.8% fibo correction, this will change trading sentiment in favor of the euro. So, the pair will be able to resume growth towards 1.2233.
EUR/USD – Daily.
In the daily chart, EUR/USD fixed below the upward trend channel, thus confirming the bearish sentiment. The downward trendline proves selling pressure. If the price fixes below 261.8% fibo correction, this will increase the odds for a further drop towards 1.1566 or 200.0% fibo correction.
EUR/USD – Weekly.
In the weekly chart, EUR/USD fixed above the pattern Narrowing Triangle that confirm the long-term bullish prospects.
Economic calendar
On March 12, the EU released an industrial production report. On the dollar's front, the University of Michigan posted a consumer sentiment index. Traders neglected both reports.
On March 15, the economic calendar for both the EU and the US is empty. So, EUR/USD lacks any information background.
COT report (Commitments of traders):
COT report (Commitments of traders)
Last Friday, another COT report revealed crucial changes for a second week in a row. This time, non-commercial traders slashed the number of long contracts by 14,000 and opened 12,000 new short contracts. To sum up, market sentiment turned clear-cut bearish. Hence, the odds are that the euro will extend further weakness. We are less interested in other categories of traders as speculators set the tone in the market.
Outlook for EUR/USD and trading tips
At the end of the last week, I recommended selling the pair if the price closes below the upward trend channel with a target of 1.1872 in the 1-hour chart. Now, these positions should be kept open. Alternatively, traders could consider buying EUR/USD, if the price closes above 1.1952 or 100.0% fibo correction in the 1-hour chart with targets of 1.2021 and 1.2063.
Terms
The Non-commercial category includes major market players: banks, hedge funds, investment funds, private, and large investors.
The Commercial category embraces commercial enterprises, firms, banks, corporations, companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import operations.
The category of Non-reportable positions means small traders who do not have a significant impact on the price.