EUR/USD – 1H.
Hello, traders! The EUR/USD pair continued to grow on the hourly chart on May 27, which allowed me to build an upward trend corridor, which now clearly characterizes the mood of traders as "bullish". Thus, today I expect the growth of quotes to continue. There was two important news for the euro yesterday. One good and one bad. The good news was that the European Commission has developed a new plan for 750 billion euros, which involves helping the affected European economy. However, first of all, this is just a plan, and secondly, this plan has already faced criticism of some countries, as Angela Merkel and Emmanuel Macron's plan for 500 billion euros had previously encountered. The bad news was a speech by Christine Lagarde, President of the ECB, who made very sad forecasts for the fall of the Eurozone economy in 2020. According to Lagarde, you need to prepare for the worst-case scenario, which involves losses from 8% to 12%. However, as we can see, traders did not take the information from Lagarde to heart and continued to buy the euro currency.
EUR/USD – 4H.
As seen on the 4-hour chart, the quotes of the euro/dollar pair secured above the horizontal trend line, thus significantly increasing the probability of further growth of quotes in the direction of the corrective level of 50.0% (1.1065). Therefore, the mood of traders on the current chart is characterized as "bullish". The pair's rebound from the Fibo level of 50.0% will work in favor of the US currency and some fall in the direction of the corrective level of 38.2% (1.0964). No indicator shows any pending divergences on May 28.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair made a consolidation above the corrective level of 38.2% (1.0965), thus, the growth is expected to continue in the direction of the corrective level of 50.0% (1.1064), and at the same time in the direction of the upper line of the downward trend corridor.
EUR/USD – Weekly.
On the weekly chart, the euro/dollar pair continues to trade near the bottom line of the "narrowing triangle". The rebound of quotes from this line still allows us to count on some growth in the long term in the direction of the level of 1.1600 (the upper line of the "triangle"). Closing the pair under the "triangle" will work in favor of the US currency and a new, possibly long fall.
Overview of fundamentals:
On May 26, the European Union and the US again did not have any economic reports. The world continues to follow the controversy between Washington and Beijing, which continue to blame each other and prepare sanctions.
News calendar for the United States and the European Union:
Germany - consumer price index (14:00 GMT).
US - change in the volume of orders for long-term goods (14:30 GMT).
US - change in GDP for the quarter (14:30 GMT).
US - number of initial and repeated applications for unemployment benefits (14:30 GMT).
On May 28, only German inflation will be released in Europe, while in America, more important reports will be released, such as first-quarter GDP and orders for long-term goods. Unfortunately, both reports are forecast with significant cuts, which means that the US currency may continue to fall in price in the afternoon.
COT (Commitments of Traders) report:
All recent COT reports have shown minimal changes. In general, we can say that over the past 5 weeks, major traders have been increasing mainly short-contracts. Their total number has increased by about 15 thousand. The number of long-term contracts in the hands of the Commercial group has practically not increased over the same period, thus indicating a strengthening of the "bearish" mood among professional speculators. And despite the fact that the total number of long contracts on their hands is almost twice the number of short contracts, the mood is changing in favor of the bears and the pair is increasingly dependent on their desire or unwillingness to sell. This week, the euro currency still shows some growth, so the new COT report, which will be released tomorrow, may show a decrease in the "bearish" mood.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro currency with the goal of 1.0964, if the rebound from the level of 50.0% (1.1065) and fixing under the ascending channel on the hourly chart is performed. You could buy the pair by fixing the quotes above the horizontal trend line with the goal of 1.1065.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
