EUR/USD – 1H.
The EUR/USD pair performed several closures above and below the level of 1.1250 on Tuesday, but was unable to start the growth process. The last close was below this level, so the process of falling quotes resumed. The downward trend corridor still characterizes the mood of traders as "bearish". By itself, the level of 1.1250 can no longer be called strong. Meanwhile, the information background for the European and American yesterday was quite weak. In the second half of the day, the US business activity indices turned out to be slightly weaker than traders' expectations, but this did not lead to a fall in the US currency. There should be more reports and news today, so trading on Wednesday should be more interesting and active. However, the overall picture is clear and understandable: the US dollar continues to grow gradually. The information background cannot stop this movement yet, but, on the other hand, it should not necessarily do so.
There is enough positive news in America right now, while economic growth in the European Union may slow down again due to a new wave of COVID. In countries such as Austria, Germany, the Netherlands, the number of diseases is growing every day. Lockdown has already been introduced in Austria. Other countries are introducing partial lockdowns in those areas where the spread of the virus is strongest. Although vaccination continues in the EU countries, but, as we can see, the new wave is even stronger than the previous one. Thus, the European currency may be under pressure due to this factor. It should also be taken into account that the dollar may be in demand as a reserve currency at this time. The difference in the approaches of the ECB and the Fed to monetary policy is also very striking. If in the US incentives are being reduced and discussions about raising the rate next year are in full swing, then in the European Union, on the contrary, Christine Lagarde said it was impossible to raise the rate, since the economy is still too weak. It is too weak and may become even weaker in the coming months if it fails to stop the new wave without lockdowns in all countries.
EUR/USD – 4H
On the 4-hour chart, the pair's quotes continue the process of falling in the direction of the corrective level of 161.8% (1.1148). The bullish divergence of the CCI indicator allowed us to count on some growth in the direction of the corrective level of 127.2% (1.1404), but instead the pair continues to slowly slide down, ignoring the levels and divergences. Thus, I recommend paying more attention to the already 4-hour schedule.
News calendar for the USA and the European Union:
US - change in the volume of orders for long-term goods (13:30 UTC).
US - change in GDP volume for the quarter (13:30 UTC).
US - the main index of personal consumption expenditures (15:00 UTC).
US - change in the level of spending of the population (15:00 UTC).
US - publication of the minutes of the Fed meeting (19:00 UTC).
On November 24, the calendar of economic events in the European Union is completely empty, and in the USA it is full of important events and reports. I would pay the most attention to the GDP report and the Fed minutes. But other reports may also slightly affect the mood of traders. The information background can be strong 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 "bearish". Speculators have opened 6966 long contracts on the euro currency and 20679 short contracts. Thus, the total number of long contracts in the hands of speculators has grown to 200 thousand, and the total number of Short contracts – up to 209 thousand. These numbers practically coincide for the third week in a row, which gives reason to assume that there is no clear mood among speculators. However, in general, in recent months there has been a tendency to strengthen the "bearish" mood. Therefore, I conclude that the mood of traders is now at a point where neither bulls nor bears have an advantage. However, the European currency continues to fall at the same time, therefore, the tendency to strengthen the "bearish" mood among the major players is correct.
EUR/USD forecast and recommendations to traders:
I recommended new sales of the pair when closing below the level of 1.1250 with a target of 1.1143. They should be kept open now. I recommend buying the euro currency if there is a rebound from the 1.1148 level on a 4-hour chart with goals 50-100 points higher.
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.