On Thursday, the EUR/USD pair closed above the corrective level of 50.0% (1.0862), but the upward process was not continued, and a couple of hours later, the rate dropped below 1.0862. Over the past two days, we have observed low trader activity and horizontal movement. This movement occurs right in the zone of the level of 1.0862, so we may see another closing above or below this level. Evaluating them as signals will now be quite problematic. But the ascending trend corridor unequivocally characterizes traders' sentiment as "bullish." I advise paying more attention to it. Closing below this corridor will allow us to expect a decline in the pair.
The wave situation needs to be clarified. Large and small waves alternate, complicating the analysis process. The last upward wave easily broke the peak of the previous wave; thus, there is no reason to assume the completion of the "bullish" trend. They only appear when the pair falls to the corrective level of 23.6% (1.0644). By that time, a close below-the-trend corridor will occur.
Yesterday, the information background was again negative for the US currency. The Philadelphia Manufacturing Index in November was again below zero, the number of initial jobless claims exceeded traders' expectations, and industrial production volumes decreased more than forecasted. There was no significant drop in the dollar, but bears again failed to regain even a small portion of the previously lost positions. In the near future, the pair will start to fall towards the lower boundary of the ascending corridor, and the euro's fate will be decided around it. Today, the information background will be weak, so bears can push the pair down a bit.
On the 4-hour chart, the pair rose to the corrective level of 61.8% (1.0882). Two rebounds from this level allow counting on a reversal in favor of the US currency and some decline towards the corrective level of 76.4% (1.0790). There are no impending divergences observed in any indicator today. Closing above the level of 1.0882 will further increase the probability of further growth towards the next Fibonacci level of 50.0% (1.0957).
Commitments of Traders (COT) report:
In the last reporting week, speculators opened 1649 long contracts and closed 2018 short contracts. The mood of major traders remains "bullish" but has noticeably weakened in recent weeks and months. The total number of long contracts concentrated in the hands of speculators is now 212 thousand, and short contracts are 123 thousand. The gap is now less than double, although a few months ago, the gap was threefold. The situation will continue to change in favor of bears. Bulls have dominated the market for too long, and now they need strong information to start a new "bullish" trend. There is no such background now. Professional traders can continue to close Long positions soon. Current figures allow for a continued decline in the euro in the coming months.
News Calendar for the USA and the Eurozone:
Eurozone – Consumer Price Index (CPI) (final estimate) (10:00 UTC).
USA – Number of Building Permits Issued (13:30 UTC).
On November 17, the economic events calendar contains two second-order entries. The impact of the information background on traders' sentiment on Friday may be weak.
Forecast for EUR/USD and trader recommendations:
I still do not recommend considering buying the pair at the moment. In the case of fixing quotes above 1.0882 on the 4-hour chart with a target of 1.0958, it should be understood that the probability of such a movement is small after a rise of 200 points this week. I recommend selling the pair on a rebound from the level of 1.0882 on the 4-hour chart, with targets at 1.0765 and 1.0714.