EUR/USD – 1H.
The EUR/USD pair collapsed on November 23. However, this is only at first glance. The picture clearly shows that yesterday's fall was not much stronger than the movements at the end of last week. For just 2 hours, the pair went down 100 points. However, this drop did not change anything in the current picture. The key point is still the sideways corridor on the 4-hour chart, from the upper limit of which the quotes just performed a rebound yesterday. As a result, the pair performed a fall to the corrective level of 38.2% (1.1798) and a reversal around it in favor of the EU currency, after which a new growth process began. It is impossible to say unequivocally why the US dollar rose yesterday. There was no important news from America that could cause such a reaction from traders. So I'm inclined to think that this fall is in some way an accident. It turns out that it was on Monday that the pair's traders decided to seriously buy the US currency. That's all. This also happens from time to time in the market. Those economic reports that were released yesterday in the EU and the US could hardly cause such a strong growth of the dollar. Thus, I am more inclined to believe that it was the rebound from the upper border of the side corridor that allowed bear traders to have a good frolic on Monday. In America, counting ends - recounts of votes in some states, which, however, do not change the overall results. It seems that Donald Trump failed to change the election results even in one state, let alone several.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a rebound from yesterday from the upper border of the side corridor and began the process of falling in the direction of the corrective level of 127.2% (1.1729). Fixing the pair's rate above the corridor will work in favor of the European currency and resume the growth process towards the next corrective level of 161.8% (1.2027). There are no emerging divergences today, as the pair has been trading within a narrow price range for several months.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a new consolidation above the corrective level of 261.8% (1.1822). This level remains weak, and I recommend paying more attention now to the lower charts, which respond more quickly to changes in the market.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair, but in the long term. In the short term, a drop is preferable.
Overview of fundamentals:
On November 23, business activity indices were released in the European Union and America. The service sector attracted the most attention, as business activity in Europe fell significantly, but not in the United States. Manufacturing sectors have proved more resilient to the new wave of the pandemic.
The news calendar for the United States and the European Union:
EU - ECB President Christine Lagarde will make a speech (14:00 GMT).
On November 24, Christine Lagarde will give a speech in the European Union, and in America, no reports or events are listed in the calendar.
COT (Commitments of Traders) report:
The penultimate COT report was released with some delay, so here I will analyze the changes in two reports at once. Fortunately, there are almost no changes. As well as the price changes of the euro/dollar pair in the last few months, which is visible on the 4-hour chart. Over the last two reporting weeks, the number of long contracts in the hands of the "Non-commercial" category of traders decreased by 4.5 thousand, and the number of short contracts by 0.5 thousand. During the last reporting week, speculators opened approximately the same number of long and short contracts. Thus, in general, the changes are insignificant. The mood of speculators became a little more "bearish", but again slightly. There are even fewer changes in other categories of traders. The most important thing I would like to note is that the mood of major players is not becoming more "bullish", which means that there are no prerequisites to expect a resumption of the upward trend now.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with the targets of 1.1798 and 1.1761, if the close is made under the level of 23.6% (1.1845) on the hourly chart. Purchases of the pair will be possible with a target of 1.2027 if it is fixed above the side corridor on the 4-hour chart.
Terms:
"Non-commercial" - large 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.
