EUR/USD – 1H.
Yesterday, the EUR/USD pair increased to the corrective level of 127.2% (1.2067), rebounded from it, and began a new round of decline in the direction of the corrective level of 100.0% (1.1989). However, on the approach to the level of 100.0%, there was a reversal in favor of the European currency, and now the growth process can be resumed. Bear traders failed to close below the nearest important level, so yesterday's drop may be just a small correction caused solely by yesterday's ECB meeting results. All the main parameters of monetary policy remained unchanged. The most important deposit rate is -0.5%. The volume of the emergency bond purchase program has not changed either - 1.85 trillion euros and its duration - until the end of March 2022.
However, traders were ready for all this, so initially, the market was not particularly worried about this. The fall of the European began when the speech of the ECB President Christine Lagarde began. She said that if necessary, the PEPP program will be extended and increased in size. As it turned out from the press conference with Lagarde, the ECB board of directors did not discuss the possible curtailment of the program to support the economy during 2021. Lagarde said that the economic stimulus would continue until inflation reaches a stable 2% per year. Thus, the rhetoric of the ECB chairman turned out to be exclusively "dovish", which could not but cause the fall of the European currency. Although, as I said above, this has not yet affected the existing trends.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes consolidated under the trend line. However, it is very weak, as is the trend line itself. So, I would not recommend paying strong attention to this point. The same is true for the level of 161.8% (1.2027). It is pretty challenging to say whether the pair has completed a close under it or intends to resume the growth process with a rebound from it.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair rebounded from the corrective level of 323.6% (1.2080), which allows us to count on a reversal in favor of the US currency and a resumption of the fall in the direction of the Fibo level of 261.8% (1.1822). Closing quotes above the trend line will significantly increase the probability of the pair continuing to grow in the direction of the level of 1.2496.
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 April 22, in addition to the events related to the ECB, there was nothing more interesting in the European Union and in the United States - a report on applications for unemployment benefits was released, which turned out to be better than traders' expectations.
News calendar for the United States and the European Union:
EU - index of business activity in the manufacturing sector (08:00 UTC).
EU - index of business activity in the service sector (08:00 UTC).
US - index of business activity in the manufacturing sector (13:45 UTC).
US - PMI index for the service sector (13:45 UTC).
EU - ECB President Christine Lagarde will deliver a speech (14:35 UTC).
US - Treasury Secretary Janet Yellen will deliver a speech (14:35 UTC).
On April 23, the European Union and the United States will release indices of business activity in the services and manufacturing sectors and speeches by Christine Lagarde and Janet Yellen.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which turned out to be relatively neutral. During the reporting week, Non-commercial traders opened 2,260 long contracts and closed 2,258 short contracts. Thus, the mood of speculators became again a little more bullish. Given that the pair are growing on the two youngest charts, everything is logical. Moreover, in general, speculators also remain bullish, as the number of long contracts focused on their hands still exceeds the number of short contracts. Not as much as before, but still exceeds.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair if a close is made under the Fibo level of 100.0% (1.1989) on the hourly chart with a target of 1.1922. I recommend buying the pair when closing above the trend line on the daily chart.
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.