EUR/USD – 1H.
Hello, traders! According to the hourly chart, the EUR/USD pair fall to the upward trend line on February 25, rebounding from it and resuming the growth process. Thus, the "bullish" mood of traders is maintained on the lowest chart. Based on this, for some time, traders can count on the continued growth of the euro. Closing the pair's rate below the trend line will work in favor of the US currency and the resumption of the fall in quotes in the direction of the low of 2020 - 1.0786.
EUR/USD – 4H.
On the 4-hour chart, after the formation of a bearish divergence in the CCI indicator, the pair's quotes performed a small drop, after which a reversal was made in favor of the EU currency and growth resumed. The pair also made a return to the downward trend corridor, below which it has been trading in recent weeks. Thus, the pair maintains the growth process on this chart in the direction of the corrective levels of 38.2% (1.0899), 50.0% (1.0936) and 61.8% (1.0973). Rebounding from any of the target levels may work in favor of the US dollar and the resumption of the fall. There are no pending divergences on February 26 in any indicator.
EUR/USD – Daily.
On the daily chart, the euro/dollar pair did not reach the lower line of the descending trend corridor, and now it has moved quite far from this line. Thus, traders did not receive a clear signal about the rebound, however, the euro now has the potential to grow to the upper line of the long-term corridor, that is, to approximately 1.1100.
EUR/USD – Weekly.
The weekly chart shows that the pair seems to have completed the rebound from the lower line of the tapering triangle. Thus, in the long term, we can expect fairly strong growth of the euro - in the area of 1.1500, but this goal is for the whole of 2020. The two most senior charts indicate a possible strong growth of the euro.
News overview:
On February 25, no important news was released in the US, and information on GDP for the fourth quarter came from Germany. Traders didn't wait too long for this report. The actual GDP value was 0.4% y/y, as expected by currency market players. This report did not support but did not create pressure on the euro currency.
News calendar for the United States and the European Union:
The US and EU news calendar are empty on February 26.
COT report (Commitments of traders):
For the week of February 18, short positions of large speculators increased to 270,555, while the number of long positions remained virtually unchanged (168,693). The total number ("total") remains in favor of short (a margin of 36,000). Thus, the conclusion for the current week remains the same: the global mood of traders remains "bearish". This mood is provided by speculators because companies prefer long positions to hedge risks with the euro falling in recent weeks. In the "changes" section, we again see a strong increase in the number of short positions for "non-commercial" and a minimal increase in long positions. And the "commercial" group's long positions are growing, but the number of short positions is also increasing. Thus, it is possible that the "bearish" mood has not yet dried up. Large market participants have not yet started to get rid of short and build up long positions.
Forecast for EUR/USD and recommendations for traders:
According to the latest COT report, purchases of the euro no longer look so attractive. However, the graphical analysis on all four charts suggests growth, which may even be long-term. So, I would recommend getting up in the long positions little by little, starting with the smallest charts - hour and 4-hour. For example, buy euros after closing above the bearish divergence peak with targets of 1.0899, 1.0936 and 1.0973. Also, the current growth of the euro is supported by the trend line on the hourly chart. There is no signal for the pair's sales at the moment.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, and companies that buy currency for current operations or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
