EUR/USD – 1H.
On October 23, the EUR/USD pair performed a reversal in favor of the European currency and rose to the corrective level of 61.8% (1.1859). The rebound of quotes from this level worked today in favor of the US currency and the resumption of the fall in the direction of the Fibo level of 50.0% (1.1812). Even though the European currency has grown by 100-150 points in the last week, in general, the pair continues to be inside the sideways trend corridor, which is visible on the 4-hour chart. It is from this corridor that I recommend traders to start trading. After all, by and large, now the pair has formed a flat. And it has been going on for a long time. And no news, events, and incidents of the past weeks or even months have managed to force traders to trade outside of this corridor. Thus, the entire information background now does not particularly affect the mood of traders. However, in America, things are slowly approaching Election Day, so in the coming weeks, you can still count on resolving the situation. A week before Election Day, Joe Biden maintains an impressive lead over Donald Trump. I would also like to note that voting is already in full swing in the United States, more than 50 million Americans have already voted. In general, the euro/dollar pair is still trading relatively calmly, however, the activity of traders may increase this week.
EUR/USD – 4H.
On the 4-hour chart, the graphical picture remains very boring, as the pair continues to trade inside the side corridor. There was no rebound of the pair's quotes from the upper border of the side corridor, thus, there was no signal to sell. Fixing the pair's rate above the corridor will increase the probability of further growth in the direction of the corrective level of 161.8% (1.2027).
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes returned to the corrective level of 261.8% (1.1825), which is not a strong level, and fixed above it. However, on the 4-hour chart, the pair remains inside the side corridor.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has consolidated above the "narrowing triangle", which now allows us to count on further growth of the euro currency, which may be strong, but in the long term.
Overview of fundamentals:
On October 23, business activity indices were released in the European Union. In the services sector, the index was 46.2, in the manufacturing sector - 54.4, and the composite - 49.4. As you can see, 2 out of 3 indices were below the level of 50.0, which indicates a decline. In America, the situation was reversed in terms of business activity indices. All three indices were above the 50.0 level.
News calendar for the United States and the European Union:
On October 26, the calendars of economic events in the European Union and the United States are empty, so the information background may not be available today during the day.
COT (Commitments of Traders) report:
The latest COT report was rather boring and uninformative. The most important category of non-commercial traders increased only 1 thousand long contracts and 700 short contracts during the reporting week. Thus, changes in their mood can be described as minimal and insignificant. Over the past few weeks, changes in this category are generally quite weak. Only on October 6, a fairly strong drop in the number of long contracts was registered. However, it is the lack of serious changes among speculators that reflects what has been happening on the market in recent months. Namely, trade in the side corridor. We are less interested in other categories of traders, but in any case, there are no major changes that deserve attention.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with targets of 1.1812 and 1.1765, as the rebound from the level of 61.8% (1.1859) on the hourly chart was completed. Purchases of the pair will now be possible with the goal of the Fibo level of 161.8% (1.2027) if it is fixed above the side corridor on the 4-hour chart.
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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
