EUR/USD – 1H.
The EUR/USD pair performed a new reversal in favor of the US currency on Wednesday and began a new round of decline inside the upward trend corridor. Thus, the mood of traders remains "bullish" and will remain so until the pair completes the closing under the ascending corridor. The rebound of the pair's exchange rate from the level of 1.1629 will favor the EU currency and the resumption of growth in the direction of the corrective level of 100.0% (1.1704). The news background of yesterday was again quite weak. The only report of the day (inflation in the European Union) did not affect the mood of traders. It is because its value of 3.4% did not differ from the expectations of traders and the previous month's value. And during the past day, the quotes of the euro managed to perform a small drop and a small increase. Thus, traders did not have a single mood yesterday, and the situation was not changed even by the speeches of several FOMC members, among whom this time was Charles Evans, Rafael Bostic, Randal Quarles. However, the whole world and the foreign exchange market may face a new "cataclysm" called the "new coronavirus crisis" in the near future. In some EU countries, the authorities have already decided to introduce a new "lockdown," as the number of disease cases has become critical. So far, we are talking about countries such as Latvia, Lithuania, Estonia, and Bulgaria. However, in the near future, other EU countries may "catch" a new wave. In America, meanwhile, a new mutation of the delta strain has been discovered, and new research is already beginning on this variant of the virus. It is completely unclear what "surprises" it will present to humanity. Also, the United States leads the world in the number of deaths in one day from the effects of coronavirus. Thus, despite vaccination, which continues in many countries of the world, it does not save from new waves of the epidemic, from the emergence of new mutations, from complications and deaths from them. So far, traders are not reacting to this news, but everything may change in the near future.
EUR/USD – 4H.
On the 4-hour chart, the quotes closed above the corrective level of 100.0% (1.1606). Thus, the growth process can now be continued toward the next Fibo level of 76.4% (1.1782). Emerging divergences are not observed in any indicator today. Fixing the pair's exchange rate below the level of 100.0% will work in favor of the US currency and the resumption of the fall in the direction of the corrective level of 127.2% (1.1404).
News calendar for the USA and the European Union:
US - Fed-Philadelphia manufacturing index (12:30 UTC).
US - number of initial and repeated applications for unemployment benefits (12:30 UTC).
US - FOMC member Christopher Waller will deliver a speech (13:00 UTC).
On October 21, the calendar of economic events in the European Union is empty, and in the USA, only not the most important reports and events. The information background will be very weak again today.
COT (Commitments of Traders) report:
The latest COT report showed that the mood of the "Non-commercial" category of traders had not changed much during the reporting week. Speculators have opened 5,733 long contracts on the euro and 2,420 short contracts. Thus, the total number of long contracts in the hands of speculators has grown to 203 thousand, and the total number of short contracts - to 222 thousand. Over the past few months, the "Non-commercial" category of traders has tended to get rid of long-term contracts on the euro and increase short contracts. Or increase short at a higher rate than long. This process continues now, and the European currency, meanwhile, continues to fall slightly. Thus, the actions of speculators affect the behavior of the pair at this time. The fall may resume.
EUR/USD forecast and recommendations to traders:
Traders are still not trading the pair too actively. Earlier, I recommended buying a pair when closing above a descending corridor on a 4-hour chart with targets of 1.1629 and 1.1704. Now, these deals can be kept open. I recommend selling the pair if a closure is under the descending corridor on the hourly chart with a target of 1.1552.
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.
