EUR/USD – 1H.
On October 13, the EUR/USD pair continued to fall throughout the trading day. As a result, the consolidation under the upward trend line worked in favor of the US currency and increased the probability of a further fall in the pair's quotes in the direction of the next Fibo levels of 23.6% (1.1707) and 0.0% (1.1612). It is the level of 1.1612 that is currently seen as the minimum for the pair. Meanwhile, it is quite problematic to say why the US currency started to grow yesterday. If only because the economic reports from America were not strong yesterday, and there were no other important and optimistic news from this country. Thus, at a certain point, traders simply started buying the dollar or getting rid of the euro currency. However, the latest COT report showed that major traders have started to get rid of long euro contracts. Maybe this is the reason for the fall of this currency? However, even if this is the case, I do not see the European currency now much lower than the current positions. The situation in America remains very tense and unstable. I believe that before the presidential election on November third, the dollar is unlikely to be able to grow much in a pair with the euro. At the same time, if the second wave of the coronavirus epidemic continues to develop in Europe, then it will be appropriate to talk about a new economic crisis in the Eurozone since a new wave of diseases will almost completely leave its negative imprint on the economy.
EUR/USD – 4H.
On a 4-hour chart, the graphic picture remains very boring. The pair's quotes have returned to the side corridor and continue to trade inside it. A rebound was made from the lower border of this corridor, as well as from the correction level of 127.2% - 1.1729. At this time, the pair's quotes have returned to the level of 127.2%, so a new rebound from it will again work in favor of the European currency and some growth in the direction of the upper line of the side corridor.
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes rose to the corrective level of 261.8% (1.1825) and rebounded from it. Thus, a reversal was made in favor of the US currency and the process of falling in the direction of the corrective level of 200.0% (1.1566) began.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has completed a consolidation 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 13, the European Union released the ZEW index of business sentiment, which was much worse than traders' expectations. In America, the inflation rate for September became known, which generally met the expectations of traders. I can't say that the economic reports were the reason for the strong growth of the dollar.
The news calendar for the United States and the European Union:
EU - ECB President Christine Lagarde will deliver a speech (09:00 GMT).
EU - change in industrial production (09:00 GMT).
A new speech by ECB President Christine Lagarde is scheduled for October 14 in the European Union, as well as a report on industrial production.
COT (Commitments of Traders) report:
The latest COT report was quite informative. The most significant and important category of Non-commercial traders continues to get rid of long contracts, closing almost 11 thousand during the reporting week. In addition, about 2 thousand short-contacts were opened, thus, the mood of major players in relation to the European currency has become much more "bearish". However, in general, I can't say that in recent months the major players have started to look in the direction of selling off the euro. Since the beginning of August, the total number of long contracts in the hands of speculators has been decreasing, however, the total number of short contracts is also decreasing. In total, there are four times more long-contracts in the hands of Non-commercial than Short contracts. Thus, I would say that the chances of the continued growth of the European currency are still high.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with a target of 1.1707, as it was closed under the trend line on the hourly chart. Purchases of the pair will be possible today if a rebound is made from the level of 127.2% (1.1729) on the 4-hour chart or from the lower border of the side corridor on the same 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.
