FX.co ★ Forecast for EUR/USD on April 12. COT report. Important report number 1: US inflation.

EUR/USD – 1H.

During the last trading day, the EUR/USD pair fell to the corrective level of 61.8% (1.1881), followed by a reversal in favor of the European currency, an increase to the level of 76.4% (1.1922), and a new reversal in favor of the US dollar. Thus, the pair was inside the side corridor, which has approximate boundaries of 1.1870-1.1920. And judging by the period separators, the pair has been trading in this side corridor for 4 days. Thus, on Monday, nothing changed – the quotes were still in this corridor. But it may change on Tuesday. Today, there will be a very small number of important events in the European Union and the United States, however, the degree of their importance will be off the scale. By and large, we are talking about only one report – on inflation in the United States for March. The fact is that this indicator can grow from 1.7% y/y to 2.4% y/y. That is, for the first time in a long time, to exceed the notorious level of 2.0%, which was repeatedly mentioned by the Fed representatives. If already in April, inflation will collapse down and will be less than 2.0% y/y, then there will be no sense from the acceleration in March. Let me remind you that the Fed representatives, as well as Janet Yellen, believe that inflation above 2% will contribute to faster economic growth. The Bank of England and the European Central Bank also believe this. Thus, 2% is a single goal for the main central banks. However, I can not unequivocally conclude that if the expectations of traders are met, the US dollar will start new growth. Traders may consider the increase in inflation as a negative factor, because, given the trillions of dollars that have been spent on maintaining the economy, inflation may continue to rise above 2.4% y/y. In general, today, I expect that the quotes will go beyond the side corridor.

EUR/USD – 4H.

On the 4-hour chart, after rebounding from the Fibo level of 127.2% (1.1729), the pair's quotes continue to grow in the direction of the corrective level of 161.8% (1.2027). Fixing the pair's rate above the level of 1.1836 increases the chances of further growth. There are no emerging divergences in any indicator today.

EUR/USD – Daily.

On the daily chart, the quotes of the EUR/USD pair consolidated above the corrective level of 261.8% (1.1822). Thus, the further fall of the pair is canceled for the time being, and instead, it can continue to grow in the direction of the Fibo level of 323.6% (1.2080). Closing below the level of 261.8% will again work in favor of the US dollar and resume falling in the direction of the Fibo level of 200.0% (1.1566).

EUR/USD – Weekly.

On the weekly chart, the EUR/USD pair has consolidated above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.

Overview of fundamentals:

On April 12, the calendar of economic events in the United States was empty, and in the European Union, one report on retail trade was released, which turned out to be significantly better than traders' expectations.

News calendar for the United States and the European Union:

EU - index of business sentiment from the ZEW institute (09:00 UTC).

US - consumer price index (12:30 UTC).

US - consumer price index excluding food and energy prices (12:30 UTC).

On April 13, as I said, an important report on inflation in the United States will be released. At the same time, the second indicator will also be important, without taking into account the prices of food and energy. In Europe – this is not the most important report on business sentiment.

COT (Commitments of Traders) report:

Last Friday, another COT report was released, which turned out to be quite neutral this time. During the reporting week, Non-commercial traders closed 7,679 long contracts and 6,702 short contracts. Thus, the mood of speculators for the reporting week almost did not change. In total, in recent weeks, speculators have been getting rid of long contracts more and at the same time increasing short contracts. Thus, in general, their mood becomes more "bearish". Consequently, the COT reports allow us to conclude the possible continuation of the fall in quotes, however, the total number of long contracts focused on the hands of large players remains higher than the total number of short contracts. That is, the upward trend is not yet complete.

EUR/USD forecast and recommendations for traders:

I recommend selling the pair if it closes at the level of 61.8% (1.1881) on the hourly chart with targets of 1.1847 and 1.1813. Purchases of the pair were recommended with the goals of 1.1820 and 1.1873, and both goals have been achieved so far. I recommend new purchases of the pair when fixing above the level of 1.1922 with a target of 1.1989.

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 support current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.