EUR/USD – 1H.
On October 21, the EUR/USD pair continued the growth process for most of the day. However, last night, a reversal in favor of the US currency was performed and consolidation under the upward trend corridor. Thus, the mood of traders could change to "bearish". However, the graphic picture allows for various options, so we will also consider other graphs. The information background remains negative for the US currency. On the one hand, there is no daily news that the situation in the United States is getting worse (economic, epidemiological, political), but in general, everything remains quite bad. And most importantly, there is no improvement in the situation that led the dollar to the levels of 1.1700-1.1900. The US Congress is simply stalling for time and is not going to accept any package of financial assistance to the unemployed and the sectors of the economy most affected by the pandemic. Democrats and Republicans can't help but realize that it will take some time to ratify the bill. And there is no time for that. The election is in 11 days. Moreover, the Democrats show about the same level of intransigence as London in negotiations with Brussels. Republicans raised their offer to $ 1.8 trillion, but Democrats don't want to lower their offer below $ 2.2 trillion. Well, the presidential election itself is a time bomb for traders in general. Now everyone thinks that Joe Biden will win, but in 2016, everyone thought that Hillary Clinton would win.
EUR/USD – 4H.
On the 4-hour chart, the graphical picture remains very boring, as the pair continues to trade inside the side corridor. The rebound of the pair's rate from the lower border of the side corridor allowed resuming the growth of quotes in the direction of the upper border of the side corridor. The rebound of quotes from the upper border will work in favor of the US currency and resume falling in the direction of the corrective level of 127.2% (1.1729).
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. This allows traders to expect continued growth towards the next corrective level of 323.6% (1.2084), but the side corridor on the 4-hour chart is more important.
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 21, there were no significant events or economic reports in the European Union and the United States. Nevertheless, traders continued to buy the euro.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On October 22, the calendars of economic events in the European Union and the United States are almost empty again. The report on applications for unemployment benefits is unlikely to attract the attention of traders.
COT (Commitments of Traders) report:
The latest COT report was quite revealing. The most significant and important category of Non-commercial traders continues to get rid of long contracts for the third week in a row, closing another 2.5 thousand during the reporting week. In addition, about 5 thousand short-contacts were opened, thus, the mood of major players in relation to the European currency became more "bearish" again. Thus, there is reason to assume that the euro currency can complete its victorious march and start falling again in a pair with the dollar. The total number of long contracts focused on the hands of speculators remains several times more than short contracts. However, this gap has been narrowing in recent weeks. The "Commercial" category of traders, on the contrary, gets rid of both contracts, but to a greater extent from short contracts, working in contrast to speculators.
Forecast for EUR/USD and recommendations for traders:
Today, I recommend selling the euro with targets of 1.1812 and 1.1765, as the closing was performed under the ascending corridor on the hourly chart. Purchases of the pair will now be possible with the target Fibo level of 161.8% (1.2027) if the consolidation above the sideways corridors on the 4-hour chart is performed.
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.
