EUR/USD – 1H.
The EUR/USD pair continued to make attempts to continue falling during the last trading day. However, it failed to work out the ascending trend line. Thus, on the hourly chart, the mood of traders remains "bullish." The pair's rebound from the trend line will work in favor of the European currency and the resumption of growth in the direction of the levels of 1.2238 and 1.2275. The consolidation of quotes under the trend line will increase the chances of the pair falling further in the direction of 1.2117 and 1.2068. Yesterday can be called a festive day, as for the first time this week, traders received at least some statistical information. There was almost no news in the European Union.
However, in the United States, there was a report on GDP for the first quarter and a report on orders for durable goods. Unfortunately, the traders did not consider this information important. They have already been informed about the GDP value in the first quarter, as this is not the first publication of this report. +6.4% is a high value. However, it did not add confidence to the US dollar. The second report was quite weak, as the volume of orders decreased by 1.3% and 1.0% compared to March. No one paid any attention to the report on the number of applications for unemployment benefits. Thus, I can draw the following conclusion. The US economy continues to recover and is doing so at a high pace. However, this does not affect the level of demand for the US currency. Traders are still looking for opportunities to buy the euro and do not seriously consider the dollar. On all four charts that I analyze, the "bullish" mood remains. In the coming days, a situation can be created on the hourly chart, in which the US currency will receive specific opportunities for growth if the bear traders manage to close under the rising trend line.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes began a new process of falling in the direction of the ascending trend line. A new rebound of quotes from this line will again work in favor of the euro and the resumption of weak growth in the direction of the corrective level of 200.0% (1.2353). Closing quotes below the trend line will favor a further drop in quotes and change the current mood of traders to "bearish."
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 continue on all charts 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 27, the calendars of economic events in the European Union and the United States contained interesting entries. However, they did not affect the mood of traders in any way.
News calendar for the United States and the European Union:
US - main index of personal consumption expenditures (12:30 UTC).
US - change in the level of household spending (12:30 UTC).
US - changes in the level of household income (12:30 UTC).
On May 28, the European Union's calendar of economic events is again empty. In the US, reports will be released that are even less likely to leave their mark on the pair's chart than yesterday's publications.
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. That is, 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 are recommended at a new rebound from the level of 1.2166 or the trend line on the hourly chart with targets of 1.2238 and 1.2275.
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 provide current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.