EUR/USD – 1H
Hello, dear traders!
On the H1 chart, EUR/USD reversed and headed towards 1.1629 on Friday. Amid calm trading during the day, the quote did not reach 1.1629. The descending trend corridor is still indicating bearish sentiment. In case of a pullback from 1.1629, the pair may reverse and go down to the 127.2% Fibo level of 1.1552. Friday was not an eventful day due to the lack of important macroeconomic reports. The eurozone published its manufacturing PMI and inflation data. Thus, business activity was slightly down in September compared with the initial estimate, and inflation accelerated to 3.4%.
Generally speaking, traders had a reason to buy the euro on Friday, though trading was calm. Even a strong inflation report could not trigger sharp price movements although the eurozone's inflation is as closely watched as inflation or the jobs market in the United States. As for the macroeconomic calendar in the US, the ISM manufacturing index and Michigan consumer sentiment came out. The latter report was not as important as the former one that was supposed to boost the greenback. Nevertheless, both reports were ignored by market participants. At the moment, the focus is on the Fed's tapering plans. Amid these expectations, the US dollar keeps strengthening. NFP data is scheduled for release this Friday. This is probably the only interesting event this week. Therefore, trading in EUR/USD is likely to remain calm. We could see on Friday that traders ignored the data from the eurozone and minor reports. They are waiting for something really important.
EUR/USD – 4H
On the H4 chart, EUR/USD closed below the 100.0% retracement level of 1.1606. The price is expected to fall to the 127.2% retracement level of 1.1404. In case of a rebound from 1.1606, the quote may rise to the 76.4% retracement of 1.1782. Neither of the indicators has formed divergence today.
Macroeconomic calendar:
The macroeconomic calendar on October 4 is empty both in the United States and the European Union.
Commitments of Traders report:
According to the latest COT report, the sentiment of Non-commercial traders changed drastically in the previous week. Speculators opened 7,264 long positions and 16,159 short positions. Thus, they are now holding 195K long positions and 194K short ones. Over the past few months, Non-commercial traders have been closing long positions in EUR/USD and opening more short ones. The euro keeps falling. The actions of speculators have an influence on the pair at the moment. The euro is expected to remain bearish.
EUR/USD forecast:
It is wise to buy the pair after a rebound from 1.1552 on the H1 chart with the target at 1.1629. At the same time, you should consider selling the pair in case of a pullback from 1.1629 with the target at 1.1552.
TERMS:
Non-commercial traders are major market players: banks, hedge funds, investment funds, private, and large investors.
Commercial traders are commercial enterprises, firms, banks, corporations, and companies that buy currency not to yield speculative profit, but to ensure current activities or export-import operations.
Non-reportable positions are small traders who do not have a significant impact on the price.