EUR/USD – 1H.
During the last trading day, the EUR/USD pair continued the growth process in the direction of the corrective level of 200.0% (1.2275). It does the same thing today. The rebound of the pair's rate from the Fibo level of 200.0% will allow us to expect a reversal in favor of the US currency and a slight fall in the direction of the lower border of the upward trend corridor, which continues to characterize the current mood of traders as "bullish." Closing the pair's rate above the Fibo level of 200.0% will increase the chances of further growth towards the next level of 1.2349. During the past day, there was almost no news. In the US, the housing price index was released, which rose by 1.4% in March. An indicator of consumer confidence, which in May fell slightly to 117.2, and the volume of home sales in the primary market, which decreased in April by 5.9%. However, all this data did not impact the movement of the euro/dollar pair. At this time, bull traders continue to push the pair up with the last of their strength, but at the same time, they do it very confidently. The 4-hour chart clearly shows how long the upward trend has been going on. Thus, I would say that it is now the US dollar and bear traders who need to look for a reason. The US currency has not been as weak as it is now for a long time, and even a strong recovery in the US economy is not helping the dollar in any way. There are quite a lot of factors that can create pressure on the US currency. But I would pay attention to the most obvious ones, such as the trend line on the 4-hour chart. Only the Fed can provide significant assistance to the US currency if it announces a gradual tightening of monetary policy. However, such rhetoric is not expected in the near future.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed above the level of 1.2223, which now allows traders to expect continued growth in the direction of the next Fibo level of 200.0% (1.2353). No new emerging divergences are observed in any indicator today. Fixing the pair's rate under the rising trend line will allow traders to expect a strong drop in the euro/dollar pair.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair closed above the level of 161.8% (1.2027), which allows us to expect continued growth in the direction of the corrective level of 200.0% (1.2356). Upward trends are continuing on all charts right now.
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 May 25, the calendars of economic events in the European Union and the United States did not contain any interesting entries. The information background was absent on Tuesday.
News calendar for the United States and the European Union:
On May 26, the calendars of economic events in the European Union and America are again empty. Thus, the information background will be absent today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which showed a new strengthening of the "bullish" mood of speculators and a sharp increase in the interest of all categories of traders in contracts for the euro currency. The "Non-commercial" category of traders opened 10,696 long contracts and a total of 1,588 short contracts during the reporting week. Thus, speculators continue to increase the number of purchases. Therefore, they continue to believe in the European currency, whatever the information background from the European Union. I also note that the total number of open contracts increased sharply in the reporting week – by almost 67 thousand. The interest of all market players is growing in the euro currency.
EUR/USD forecast and recommendations for traders:
I recommend selling the pair when closing under the trend line on the 4-hour chart with the targets of 1.2068 and 1.1990. Purchases of the pair were again recommended when rebounding from the level of 1.2166 on the hourly chart with targets of 1.2238 and 1.2275. Now, these positions should be kept open. New buy – at the close above the level of 1.2275 with a target of 1.2349.
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.