EUR/USD – 1H.
The EUR/USD pair on Monday continued the growth process that began on Friday. However, this growth was so weak. Nevertheless, the quotes of the euro performed a closure over the downward trend corridor, which was not a surprise. If you look at the 4-hour chart, it becomes clear: the movements in the last month are extremely boring and almost horizontal. All this time, the euro/dollar pair has been trading in the range of a maximum of 150 points. Thus, now traders can count on continued growth towards the level of 1.1629, but this is inaccurate. Monday was also quite boring in terms of information. During the whole day, only one event took place that could affect the mood of traders – the speech of Jerome Powell. However, the Fed president spoke last week, immediately after the Fed meeting, and will speak again this week.
Thus, it is unlikely that the head of the Fed will share information with traders that is still unknown to them every time. Most likely, all these speeches will be a mere formality. But the speeches of other Fed representatives are making it clearer that the rate will be raised once or twice next year. Already, more than half of the Fed's monetary committee supports tightening policy next year. This will probably happen in the second half of the year. However, this is too distant a prospect to pay attention to it now. Now we need to clearly understand how the pair is moving, and also focus on tomorrow's inflation report in the United States. Traders may not pay any attention to this report, but at least it will make it clear in which direction the indicator is moving in the medium term. Let me remind you that Jerome Powell is still keeping calm on the issue of inflation, believing that next year it will begin to slow down by itself. Many experts disagree with him. Many Fed officials disagree with him. And Powell himself may resign as early as February 2022.
EUR/USD – 4H.
On the 4-hour chart, the quotes performed a new return to the corrective level of 100.0% (1.1606). The rebound of quotes from this level will again work in favor of the US currency and some fall in the direction of the corrective level of 127.2% (1.1404). The bearish divergence of the CCI indicator increases the chances of a rebound from the corrective level of 100.0% (1.1606). Closing the pair's rate above the level of 100.0% will allow us to count on continued growth in the direction of the corrective level of 76.4% (1.1782).
News calendar for the USA and the European Union:
EU - an index of business sentiment from the ZEW Institute (10:00 UTC).
EU - ECB President Christine Lagarde will deliver a speech (13:00 UTC).
US - Chairman of the Fed Board of Governors Jerome Powell will deliver a speech (14:00 UTC).
On November 9, the calendars of the European Union and the United States are not empty. Christine Lagarde and Jerome Powell will speak today, but I think the general information background will be weak today. It is unlikely that strong movements of the pair should be expected today.
COT (Commitments of Traders) report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders became more "bullish". Speculators closed 4,032 long contracts on the euro and 10,622 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 195 thousand, and the total number of short contracts - to 199 thousand. Now, these numbers practically coincide, which gives reason to assume that there is no clear mood among speculators. In general, in recent months, there has been a tendency to strengthen the "bearish" mood. Perhaps, now the mood of traders is at a point where no one has an advantage. Perhaps in a week or two, the "bearish" mood will continue to strengthen, which will allow the European currency to continue falling.
EUR/USD forecast and recommendations to traders:
It is not safe to buy or sell the pair now, as traders do not react to important information background and ignore important corrective levels. You can try to sell the pair if an exact rebound from the level of 1.1606 is performed on the 4-hour 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 to make speculative profits, 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.