EUR/USD. April 14. Good reporting in the EU pushes the euro up again
April 14, 2023 11:22 am
On Thursday, the EUR/USD pair continued the growth process and secured above 1.1000 and 1.1035. Thus, the growth of quotes can be continued towards the next level of 1.1105. The European currency has been growing for the fourth day in a row.
The background information on Thursday was quite interesting for traders, who took advantage of the opportunity to do so. The report on German inflation, which was released first yesterday, did not particularly interest them, as the final value of the indicator did not differ from the preliminary one – 7.4% y/y. However, the industrial production in the eurozone impressed them – the indicator grew by 1.5% m/m, although traders were expecting growth of no more than 1%. I think this report is not strong enough to set the tone for the pair’s movement throughout the day. But the market sentiment is clearly “bullish” now, so bulls need a reason to open new positions. And they took full advantage of all the chances provided. Industrial production does not provide an opportunity to draw any loud conclusions. In a separate month, it showed decent growth, but if you look at the chart of changes over the past year, it is clear that failing and positive months alternate. For example, two months ago, there was a decline of 1.7%; four months ago – a decline of 1.7%; six months ago – a decline of 3.2%. Thus, it is too early to conclude the resurrection of the European economy. But, as I already said, traders do not need such reflections and conclusions now. They need a reason to open new purchases. I believe the current growth of the euro does not fully correspond to the information background. Nevertheless, the pair can grow to the next important level of 1.1273.
On the 4-hour chart, the pair has secured above the sideways corridor, which allows traders to count on the continuation of growth in the direction of the corrective level of 61.8% (1.1273). The corrective level of 50.0% (1.0941) has also been secured, which increases the chances of further growth. The “bullish” divergence at the CCI indicator similarly favored the euro. No new emerging divergences have been observed yet.
Commitments of Traders (COT) Report:
In the last reporting week, speculators opened 2498 long contracts and 4130 short contracts. The sentiment of large traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators is now 225,000, and short contracts are 82,000. The European currency has been growing for more than half a year, but in the last few weeks, the number of long contracts among professional traders has stayed the same. The situation remains favorable for the euro after a long “black period,” so its prospects are still good. At least as long as the ECB raises the interest rate in 0.50% steps. However, I want to note that in the near future, the market sentiment may change to “bearish” as the ECB cannot constantly raise the rate by half a percent and may drop to a 0.25% step in May. Both charts have sell signals.
News calendar for the US and the European Union:
US – Retail Sales Volume (12:30 UTC).
US – Industrial Production Volume (12:30 UTC).
US – University of Michigan Consumer Sentiment Index (14:00 UTC).
On April 14th, the economic events calendar contains only reports from America. As traders are now set to buy, they will also look for a reason for buy positions in these statistics. The impact of the information background on traders’ sentiment today may be moderate in strength.
EUR/USD forecast and advice for traders:
Sell orders for the pair can be opened when the pair bounces off the 1.1105 level on the hourly chart with a target of 1.1035. But be cautious with selling now. Purchases of the pair were possible upon closing above the 1.0941 level on the 4-hour chart, with targets of 1.0000 and 1.1035. All targets have been worked out. The next target is 1.1105.
The material has been provided by InstaForex Company – www.instaforex.com
The background information on Thursday was quite interesting for traders, who took advantage of the opportunity to do so. The report on German inflation, which was released first yesterday, did not particularly interest them, as the final value of the indicator did not differ from the preliminary one – 7.4% y/y. However, the industrial production in the eurozone impressed them – the indicator grew by 1.5% m/m, although traders were expecting growth of no more than 1%. I think this report is not strong enough to set the tone for the pair’s movement throughout the day. But the market sentiment is clearly “bullish” now, so bulls need a reason to open new positions. And they took full advantage of all the chances provided. Industrial production does not provide an opportunity to draw any loud conclusions. In a separate month, it showed decent growth, but if you look at the chart of changes over the past year, it is clear that failing and positive months alternate. For example, two months ago, there was a decline of 1.7%; four months ago – a decline of 1.7%; six months ago – a decline of 3.2%. Thus, it is too early to conclude the resurrection of the European economy. But, as I already said, traders do not need such reflections and conclusions now. They need a reason to open new purchases. I believe the current growth of the euro does not fully correspond to the information background. Nevertheless, the pair can grow to the next important level of 1.1273.
On the 4-hour chart, the pair has secured above the sideways corridor, which allows traders to count on the continuation of growth in the direction of the corrective level of 61.8% (1.1273). The corrective level of 50.0% (1.0941) has also been secured, which increases the chances of further growth. The “bullish” divergence at the CCI indicator similarly favored the euro. No new emerging divergences have been observed yet.
Commitments of Traders (COT) Report:
In the last reporting week, speculators opened 2498 long contracts and 4130 short contracts. The sentiment of large traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators is now 225,000, and short contracts are 82,000. The European currency has been growing for more than half a year, but in the last few weeks, the number of long contracts among professional traders has stayed the same. The situation remains favorable for the euro after a long “black period,” so its prospects are still good. At least as long as the ECB raises the interest rate in 0.50% steps. However, I want to note that in the near future, the market sentiment may change to “bearish” as the ECB cannot constantly raise the rate by half a percent and may drop to a 0.25% step in May. Both charts have sell signals.
News calendar for the US and the European Union:
US – Retail Sales Volume (12:30 UTC).
US – Industrial Production Volume (12:30 UTC).
US – University of Michigan Consumer Sentiment Index (14:00 UTC).
On April 14th, the economic events calendar contains only reports from America. As traders are now set to buy, they will also look for a reason for buy positions in these statistics. The impact of the information background on traders’ sentiment today may be moderate in strength.
EUR/USD forecast and advice for traders:
Sell orders for the pair can be opened when the pair bounces off the 1.1105 level on the hourly chart with a target of 1.1035. But be cautious with selling now. Purchases of the pair were possible upon closing above the 1.0941 level on the 4-hour chart, with targets of 1.0000 and 1.1035. All targets have been worked out. The next target is 1.1105.
The material has been provided by InstaForex Company – www.instaforex.com
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