EUR/USD – 1H.
During the last trading day, the EUR/USD pair reversed in favor of the European currency and increased to the corrective level of 76.4% (1.1922). The rebound of the pair's quotes from this level worked in favor of the US dollar, and now the pair has begun to fall in the direction of the Fibo levels of 61.8% (1.1881) and 50.0% (1.1847). However, closing the pair's rate above the level of 76.4% will work in favor of resuming the growth of quotes. The US currency continues to decline against the euro, however, the information background does not allow us to draw a clear conclusion about the reasons for the fall of the dollar. Let's start with the fact that this week there were no special news and reports either in the United States or in the European Union. Perhaps the main topic of the week is the desire of the US government, led by Joe Biden, to raise the corporate tax from 21% to 28% to increase tax revenues to the budget and get a source for forming a new package of assistance to the economy for at least another $ 2 trillion.
However, Rice University economists conducted an analysis and concluded that the tax increase could lead to the loss of one million jobs in the country over the next two years. The authors of the study also concluded that the tax reform in the United States could lead to a drop in GDP by $ 117 billion by 2023. It should be noted that we are probably talking about the outflow of American companies from the United States to those countries where the tax burden is lower. This is also being talked about this week after Janet Yellen proposed a single corporate tax in the world to avoid large corporations fleeing offshore and low-tax countries. Its initiative was supported by the largest and richest countries. As for Joe Biden's initiative, it will have to pass the test of strength through the ranks of its party. If all 50 Democratic senators are in favor, then this bill will be passed, despite fierce protests from Republicans.
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 now, and instead, the growth can be continued in the direction of the Fibo level of 323.6% (1.2080).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On April 8, the calendar of economic events in the European Union was almost empty, and in the United States, the speech of Fed Chairman Jerome Powell took place, which did not affect the mood of traders too much.
News calendar for the United States and the European Union:
US - producer price index (12:30 UTC).
On April 9, the calendars of economic events in the US and the EU are almost empty. There will be no background information today.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which turned out to be "talking" this time. During the reporting week, traders of the "Non-commercial" category (the most important) opened 34 long contracts and 25,045 short contracts. Thus, even analyzing the behavior of speculators now makes no sense. Everything is clear enough. The mood of large traders is more "bearish", as evidenced by the regular increase in the number of short contracts and a decrease in the number of long contracts. Thus, in the perspective of the daily chart, the fall in the quotes of the euro/dollar pair may continue. But the new downward trend may turn out to be quite long, so do not expect a drop in the next few weeks by another 300-500 points. Everything will happen gradually.
EUR/USD forecast and recommendations for traders:
I do not recommend selling the pair now, as a new upward trend has begun. 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.
