EUR/USD – 1H.
During the last trading day, the EUR/USD pair performed a rebound from the corrective level of 161.8% (1.2166), a reversal in favor of the US dollar and a fall to the level of 1.2117. The rebound of the pair's rate from this level will allow traders to count on a reversal in favor of the European and a return to the Fibo level of 161.8%. In general, the pair spent the last two days quite calm. The information background was quite weak. However, everything can change today. Inflation in the US is a topic that only a lazy person does not discuss in the market right now. Moreover, this indicator does not have any specific impact on the dollar at the moment. When the relevant reports are released, traders take them into account. But we can not say that this indicator dominates the dollar. Today, traders expect inflation to accelerate to 3.6% - 3.8% y/y. The previous value of the indicator is 2.6% y/y. Thus, on the one hand, inflation may increase very much in April. However, on the other hand, it will only increase in April of the previous year, when the epidemic gained serious proportions around the world, and many countries were quarantined. Obviously, in the conditions of low business and economic activity, prices did not rise and sometimes even fell. Therefore, the price increase of 3.6% - 3.8% compared to April 2020 is not an indicator. Nevertheless, if the forecasts come true, the US currency may resume falling today. On the 4-hour and daily charts, it is visible that the pair has resumed growth. Thus, traders will look for new reasons for new purchases of the euro currency and sales of the dollar. And today, they can find them since any increase in inflation is a negative factor. The rest of the day's events and reports will be overshadowed by the inflation report.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes continue to grow in the direction of the level of 1.2223. The rebound of the exchange rate from this level will work in favor of the US currency, and some fall in the direction of the Fibo level of 161.8% (1.2027). The consolidation of quotes above 1.2223 will increase the probability of continuing growth in the direction of the corrective level of 200.0% (1.2353). There are no emerging divergences in any indicator today. The rising trend line characterizes the current mood of traders as "bullish."
EUR/USD – Daily.
On the daily chart, the EUR/USD pair quotes closed above the level of 161.8% (1.2027). Upward trends are now resumed on all charts. On the daily chart, the target is the corrective level of 200.0% (1.2356).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle," which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On May 11, the calendars of economic events in the European Union and the United States were empty, so there was no information background on this day.
News calendar for the United States and the European Union:
EU - economic forecast from the European Commission (09:00 UTC).
EU - change in industrial production (09:00 UTC).
US - consumer price index (12:30 UTC).
US - consumer price index excluding food and energy prices (12:30 UTC).
On May 12, in addition to the important report on US inflation, the European Union will release a report on industrial production and an economic forecast from the European Commission.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which again showed that speculators actively increased both long contracts and short in the reporting week. The first number increased by 7,033 contracts, and the second – by 6,148. Thus, almost complete equality. In general, the number of long contracts focused on the hands of the "Non-commercial" category still exceeds the number of short contracts by almost two times. The mood of speculators remains "bullish," which is confirmed by the euro/dollar pair's movement, which has resumed upward trends on all charts. For other categories, the changes are minimal.
EUR/USD forecast and recommendations for traders:
I recommended selling the pair if the rebound from the Fibo level of 161.8% (1.2166) on the hourly chart is performed. The first target of 1.2117 is reached. If there is a close below - it continues to sell with a target of 1.2068. I recommend buying the pair today if the rebound on the hourly chart is made from the level of 1.2117 with the goals of 1.2166 and 1.2223.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to provide current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
