EUR/USD – 1H.
Hello, traders! The euro/dollar pair continued to fall on the hourly chart on May 22. The quotes of the pair completed the consolidation under the ascending trend corridor, so the sentiment has changed to bearish. A more accurate and vivid picture was formed on the 4-hour chart. At this time, the topic that worries traders the most, and at the same time makes the whole world afraid, is the topic of the cold war between China and America. If in the last two years there was a trade conflict between the countries, which was personally unleashed by Donald Trump, who considered that the trade balance with China urgently needs to be "leveled", then there is a real threat not only of a new trade conflict but also of a full-scale confrontation in all spheres of life and activity. For example, Washington could seize the assets of Chinese in the Americas, to impose sanctions against particular companies and officials. Beijing is also unlikely to sit on the sidelines and not take retaliatory action. It would seem that what is the point of this conflict if both sides suffer? There was no sense in the two-year-old trade conflict either, but Trump thought otherwise. It's the same now.
EUR/USD – 4H.
On the 4-hour chart, the quotes of the euro/dollar pair also rebounded from the horizontal trend line and began to fall in the direction of the corrective level of 23.6% (1.0840) and the ascending trend line. Thus, trading on the pair continues to take place in a very narrow range and so far, traders can not break out of it. The rebound of quotes from the level of 1.0840 or the trend line will again work in favor of the European currency and the beginning of new growth in the direction of the level of 1.0964 and the upper trend line. Closing the pair's exchange rate under the upward trend line will increase the probability of a further fall in the direction of the Fibo level of 0.0% (1.0638).
EUR/USD-Daily.
On the daily chart, the euro/dollar pair rebounded from the Fibo level of 38.2% (1.0965) and began the process of falling towards the corrective level of 23.6% (1.0840). The 4-hour chart is more accurate and informative now, so I recommend considering it first.
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 expect some growth in the long term in the direction of the level of 1.1600 level (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 2, the European Union and the US did not have any economic reports or important news. The world continues to closely monitor the controversy between Washington and Beijing, waiting for the beginning of the "cold war".
News calendar for the United States and the European Union:
No news or reports are scheduled for May 25 in Europe and America again. Thus, today the information background will not be available.
COT (Commitments of Traders) report:
The latest COT report again showed not too big changes compared to the previous one. The total number of long contracts decreased by 294, while short contracts increased by 970. Given that the total number of contracts included in the report is more than 1,000,000, these changes are minuscule. We are more interested in the "Non-commercial" group and its changes. According to this graph, major players continued to get rid of long contracts and increase short during the reporting week. Thus, market participants who are engaged in this activity professionally, in order to make a profit, believe that the euro currency will continue to fall. Although the total number of long contracts remains almost twice as large as short, in recent weeks there has been a tendency to reduce the gap, which means that the mood of traders is changing to "bearish".
Forecast for EUR/USD and recommendations for traders:
I suggest that new sales of the euro currency be made after the pair closes under the upward trend line on the 4-hour chart with the goal of 1.0638. I recommend buying the pair after closing above the horizontal trend line with goals of 1.1065 and 1.1167.
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.
