EUR/USD – 1H.
Hello, traders! As seen on the hourly chart on Thursday, the EUR/USD pair performed a new reversal in favor of the European currency and resumed the growth. And this reversal gave the opportunity to build a new upward trend line, which now determines the mood of traders more reliably as "bullish". Fixing the pair's exchange rate under the trend line will work in favor of the US dollar and significantly increase the pair's chances of resuming the fall in quotes. There were a few economic reports yesterday. However, late in the evening, even at night, it became known that the Eurogroup managed to agree on a package of assistance to the European economy for 540 billion euros. Also, an absolute surprise was the agreement of a new package of assistance to the American economy from the Fed of 2.3 trillion dollars. Both packages will be designed to help small and medium-sized businesses, as well as workers who are experiencing hard times due to the coronavirus pandemic, as well as national quarantine.
EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a double rebound from the corrective level of 23.6% (1.0840) and a reversal in favor of the British currency. A new growth process has started in the direction of the corrective level of 38.2% (1.0964). The rebound of the pair's quotes from this Fibo level will work in favor of the US currency and some drop in the quotes in the direction of the corrective level of 23.6%. Also yesterday, a bearish divergence was formed in the CCI indicator, which also allows traders to count on a reversal in favor of the US dollar. Closing the pair's rate above the divergence peak and the Fibo level of 38.2% will increase the probability of continuing growth towards the next corrective level of 50.0% (1.1065).
EUR/USD – Daily.
On the daily chart, the EUR/USD pair also continues to grow in the direction of the corrective level of 38.2% (1.0965) and also risks a rebound from this level. The picture remains identical to the 4-hour chart, since the same grid of Fibo levels is in effect.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair continues to trade near the lower line of the "narrowing triangle". The rebound of quotes from the lower line of the "triangle" allows traders to count on the growth of quotes in the long term in the direction of the level of 1.1600 (the upper line of the "triangle"). However, closing under the "triangle" will work in favor of the US currency and, possibly, a new long fall.
Overview of fundamentals:
On April 9, economic news was not in favor of the US dollar. I have already mentioned the Fed's $ 2.3 trillion measures. In addition, the number of initial applications for unemployment benefits was 6.6 million in addition to the 10 million of the previous two weeks, and the head of the Federal Reserve Jerome Powell said yesterday that interest rates will remain low until the US economy begins to recover.
News calendar for the United States and the European Union:
EU - Good Friday.
USA - consumer price index (14:30 GMT).
USA - consumer price index excluding food and energy prices (14:30 GMT).
On April 10, the EU news calendar again does not contain anything interesting, since good Friday is celebrated in Europe today. In America, an important inflation indicator for March will be released today.
COT (Commitments of Traders) report:
The latest COT report showed an even reduction in the number of long and short contracts among major market players. The advantage is small for short-contracts, there are 27,000 more of them. However, speculators have recently been actively reducing sales of the euro, which gives hope for continued growth. Today, a new COT report will be released, as always with a 3-day delay, and we will see whether the trend of getting rid of short contracts by the "Non-commercial" group will continue. If so, the chances of the planned growth of the euro will increase.
Forecast for EUR/USD and recommendations for traders:
Now I recommend being careful with the new sales of the euro, as there are no signals yet. I also recommend closing yesterday's purchases, as there is a bearish divergence on the 4-hour chart. I recommend selling the euro again when the quotes fall back from the level of 38.2% (1.0964) with the target of 1.0840. I recommend buying the pair at the close above the level of 38.2% with a target of 1.1065.
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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