EUR/USD – 1H.
The EUR/USD pair closed under the Fibo level of 100.0% (1.1952) during the past day and now continues the process of falling towards the next corrective level of 127.2% (1.1873). Thus, the bull traders failed to develop success in the next cut. Meanwhile, the information background was very strong for the second day in a row. Let me remind you that on Wednesday, the Fed summed up the results of the two-day meeting and, although it did not make any important decisions, there was still something to pay attention to. In any case, the US dollar performed a fairly strong drop on this event. And yesterday there was a speech by Christine Lagarde, who first said that in the first quarter of 2021, the European economy will contract again (after the fourth quarter of 2020, in which a fall of 0.7% was recorded). However, this is not the main thing. The ECB president again spoke about the high degree of risk associated with the coronavirus. According to Christine Lagarde, "the high level of COVID-2019 infection, the spread of new strains, and the tightening of measures to counter the epidemic continue to harm economic activity in the European Union". Thus, Europe seems to be sliding into the third wave of the epidemic, despite the beginning of the vaccination process. Many countries have recently tightened quarantine measures, some are going to introduce a new "lockdown". Naturally, all this will cause a new contraction of the economy. Thus, the prospects for the European currency are not the most rosy yet. Bull traders will have a hard time in the near future. But I note the continued growth in the yield of US 10-year treasuries, which have already reached the level of 1.703% and also resist bull traders, as they increase the demand for the dollar. Christine Lagarde believes that the growth of European bond yields is directly related to the growth of American treasuries.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a reversal in favor of the US currency and began a new process of falling in the direction of the level of 1.1836, near which they stopped last time. However, in general, the entire movement of the pair already resembles the movement in the side corridor between the levels of 1.1836 and 1.1988. At least it is in this price range that the pair has been since March 5, that is, for two weeks.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a consolidation under the upward trend corridor, so the mood on the traffic was "bearish". The descending trend line confirms this. Fixing the pair's rate under the Fibo level of 261.8% will increase the chances of a further fall in the direction of the corrective level of 200.0% (1.1566).
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 18, in the European Union, Christine Lagarde gave a speech twice, and there was also a speech by Jerome Powell. But the Fed chairman talked more about the digital dollar, rather than the economy and monetary policy. The number of initial and repeated applications for unemployment benefits in the US slightly exceeded the expectations of traders.
News calendar for the United States and the European Union:
On March 19, the calendars of economic events in the United States and the European Union are empty. Thus, the influence of the information background will be absent today.
COT (Commitments of Traders) report:
Last Friday, the next COT report was released and for the second week in a row, it turns out to be quite aggressive. This time, the "Non-commercial" category of traders reduced 14,000 long contracts on their hands and opened 12,000 new short contracts. It follows that the mood of speculators has become much more "bearish". Consequently, the chances of a further fall in the euro currency quotes are growing. Other categories of traders are of much less concern to us since it is speculators who set the tone of trading.
EUR/USD forecast and recommendations for traders:
It was recommended to sell the pair at the closing of quotes under the level of 100.0% (1.1952) with a target of 1.1873 on the hourly chart. Today, these transactions can be kept open. I recommend buying the pair when rebounding from the levels of 1.1885 or 1.1836 (the two previous lows) with a target of 1.1952.
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.