EUR/USD – 1H.
Yesterday, EUR/USD rose the correction level of 127.2% - 1.2068, rebounded from it, made a reversal in favor of the US dollar and started a decline towards the correction level of 100.0% - 1.1990. Yesterday's movement was easy to predict as the pair just needed to rise slightly after a fall on Friday. An unsuccessful attempt to close above the 127.2% level was a technical signal for a new decline. Everything seems quite logical and easy to understand. The news background was not favorable for the US currency yesterday. Apparently, no one paid attention to the manufacturing PMI in the Eurozone. Yet, the ISM manufacturing PMI in the US suddenly turned out to be 4 points lower than in the previous month. By that time, the US dollar had already dropped by 30-40 pips, and the ISM index data finished it off. As I have already mentioned, the pair has resumed its fall today. Yesterday's speech by Jerome Powell did not cause any response from traders. Thus, I would say that at this moment, the euro/dollar pair is trading under the influence of graphical signals. The current technical picture is best seen on the 4-hour chart where the pair has closed below the ascending trendline and may close below the important Fibo level of 161.8% today. I cannot say for sure that the growth in the US currency has been caused by the news background in recent days. This currency has been declining over the last month and was probably slightly oversold which again indicates the technical nature of the current fall.
EUR/USD - 4H.
On the 4-hour chart, the pair reversed in favor of the US dollar and closed below the ascending trendline. However, the first attempt to gain a foothold below the Fib level of 161.8% - 1.2027 was unsuccessful. Most likely, in the next few hours, a second attempt will be made. In this case, traders may expect a further decline towards the level of 1.1836. None of the technical indicators is showing any signs of the forming divergences today.
EUR/USD - Daily.
On the daily chart, a drop of the EUR/USD pair on Friday has led to the cancellation of the descending trendline and the revision of the Fibonacci grid. Still, the picture has not become any clearer or easier. Thus, for now, I recommend paying more attention to the 4-hour chart where the situation is clear and more understandable.
EUR/USD - Weekly.
On the weekly chart, EUR/USD has completed the consolidation above the ascending triangle which leaves the prospects for further growth in the long term.
News overview:
On May 3, the European Union and the US released the data on manufacturing PMI which had a slight impact on the pair's trajectory unlike the speech by Jerome Powell.
Economic calendar in US and EU:
On May 4, the economic calendars will be absolutely empty both in the United States and the European Union, so there will be no information background today.
COT (Commitments of traders) report:
Last Friday, another COT report was released which again showed a rise of the bullish sentiment among major market players. This means that the European currency has new opportunities to continue its uptrend. The number of new open long positions by the non-commercial category of traders is 5,568, and the number of short positions is 2,938. Thus, the bullish mood of this category of traders has increased, but not too much. Let me remind you that since the beginning of this year, the gap between the total number of long and short contracts has been narrowing which actually indicates a weakening of the bullish trend. However, in the past three weeks it has steadily increased.
EUR/USD forecast and trading tips:
I recommend selling the pair if it closes below the trendline on the 4-hour chart with the targets at 1.1990 and 1.1923. At this time, you can leave these trades open. Buying the pair is not recommended today as there are no clear buy signals at the moment.
TERMS:
Non-commercial group of traders includes major market players such as banks, hedge funds, investment funds, private and large investors.
Commercial group of traders includes commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit but to ensure current activities or export-import operations.
Non-reportable positions refer to small traders who do not have a significant impact on the price.