EUR/USD. April 23rd. Bulls and bears are in balance
April 23, 2024 12:22 pm
The EUR/USD pair continued to trade horizontally between the levels of 1.0619 and 1.0696 on Monday. The sideways movement has been maintained for seven days now. During all this time, bears and bulls cannot decide what to do next. The information background is weak, but it continues to indicate the advantage of bearish traders. Thus, the consolidation of the pair’s rate below the corrective level of 127.2%-1.0619 will allow expecting further decline towards the next Fibonacci level of 161.8%-1.0519. A rebound of quotes from the level of 1.0619 will work in favor of the euro and some growth towards the level of 1.0696.
The wave situation remains unchanged. The last completed upward wave failed to break the peak of the previous wave (from March 21st), and the last downward wave broke the last low (from April 2nd) and has been forming for 10 days now. Thus, we are dealing with a “bearish” trend, and at the moment, there is no sign of its completion. For such a sign to appear, the new upward wave must break the peak of the previous wave (from April 9th). Or the next downward wave (which has yet to start) failed to break the last low from April 16th.
There was no information background on Monday, and it was noticeable by the traders’ inaction. Bears remain in a more advantageous position since, in 2024, the gap between the ECB and the Fed rates may increase. FOMC members have indicated in the last two weeks that they will not rush to ease monetary policy if inflation in the US does not decrease. The Fed is inclined to keep rates at their current level until the consumer price index begins to slow down again. Also, some Fed officials do not rule out the possibility of further tightening monetary policy. Thus, the Fed’s policy will remain “hawkish” much longer than the ECB’s.
On the 4-hour chart, the pair experienced a decline to the corrective level of 23.6%-1.0644 and consolidation below it. However, two “bullish” divergences in the CCI indicator and the RSI indicator dropping below 20 worked in favor of the euro and initiated growth towards the corrective level of 38.2%-1.0765. Consolidation of quotes below the level of 1.0644 again will allow counting on a decline towards the corrective level of 0.0%-1.0450. The trend remains “bearish,” but a sideways movement has formed on the hourly chart.
Commitments of Traders (COT) report:
In the last reporting week, speculators opened 3493 long contracts and 23992 short contracts. The sentiment of the “non-commercial” group remains “bullish” but continues to weaken rapidly. The total number of long contracts held by speculators now stands at 179 thousand, while short contracts amount to 167 thousand. The situation will continue to change in favor of bears. In the second column, we see that the number of short positions increased from 92 thousand to 167 thousand over the past 3 months. During the same period, the number of long positions decreased from 211 thousand to 179 thousand. Bulls have dominated the market for too long, and now they need a strong information background to resume the “bullish” trend. However, the information background has only been supporting bears lately. The euro could have lost much more ground over the past few weeks.
News calendar for the US and the Eurozone:
Eurozone – Germany Services Business Activity Index (07:30 UTC).
Eurozone – Germany Manufacturing Business Activity Index (07:30 UTC).
Eurozone – Services Business Activity Index (08:00 UTC).
Eurozone – Manufacturing Business Activity Index (08:00 UTC).
US – Services Business Activity Index (13:45 UTC).
US – Manufacturing Business Activity Index (13:45 UTC).
US – New Home Sales (14:00 UTC).
On April 23rd, the economic events calendar contains many interesting entries. The influence of the information background on traders’ sentiment today may be of moderate strength.
Forecast for EUR/USD and trader recommendations:
Sales of the pair are possible today upon consolidation below the level of 1.0619 on the hourly chart with a target of 1.0519. Or upon bounce from the level of 1.0696 with a target of 1.0619. Purchases of the euro are possible upon a rebound from the level of 1.0619 on the hourly chart with a target of 1.0696.
The material has been provided by InstaForex Company – www.instaforex.com
The EUR/USD pair continued to trade horizontally between the levels of 1.0619 and 1.0696 on Monday. The sideways movement has been maintained for seven days now. During all this time, bears and bulls cannot decide what to do next. The information background is weak, but it continues to indicate the advantage of bearish traders. Thus, the consolidation of the pair’s rate below the corrective level of 127.2%-1.0619 will allow expecting further decline towards the next Fibonacci level of 161.8%-1.0519. A rebound of quotes from the level of 1.0619 will work in favor of the euro and some growth towards the level of 1.0696.
The wave situation remains unchanged. The last completed upward wave failed to break the peak of the previous wave (from March 21st), and the last downward wave broke the last low (from April 2nd) and has been forming for 10 days now. Thus, we are dealing with a “bearish” trend, and at the moment, there is no sign of its completion. For such a sign to appear, the new upward wave must break the peak of the previous wave (from April 9th). Or the next downward wave (which has yet to start) failed to break the last low from April 16th.
There was no information background on Monday, and it was noticeable by the traders’ inaction. Bears remain in a more advantageous position since, in 2024, the gap between the ECB and the Fed rates may increase. FOMC members have indicated in the last two weeks that they will not rush to ease monetary policy if inflation in the US does not decrease. The Fed is inclined to keep rates at their current level until the consumer price index begins to slow down again. Also, some Fed officials do not rule out the possibility of further tightening monetary policy. Thus, the Fed’s policy will remain “hawkish” much longer than the ECB’s.
On the 4-hour chart, the pair experienced a decline to the corrective level of 23.6%-1.0644 and consolidation below it. However, two “bullish” divergences in the CCI indicator and the RSI indicator dropping below 20 worked in favor of the euro and initiated growth towards the corrective level of 38.2%-1.0765. Consolidation of quotes below the level of 1.0644 again will allow counting on a decline towards the corrective level of 0.0%-1.0450. The trend remains “bearish,” but a sideways movement has formed on the hourly chart.
Commitments of Traders (COT) report:
In the last reporting week, speculators opened 3493 long contracts and 23992 short contracts. The sentiment of the “non-commercial” group remains “bullish” but continues to weaken rapidly. The total number of long contracts held by speculators now stands at 179 thousand, while short contracts amount to 167 thousand. The situation will continue to change in favor of bears. In the second column, we see that the number of short positions increased from 92 thousand to 167 thousand over the past 3 months. During the same period, the number of long positions decreased from 211 thousand to 179 thousand. Bulls have dominated the market for too long, and now they need a strong information background to resume the “bullish” trend. However, the information background has only been supporting bears lately. The euro could have lost much more ground over the past few weeks.
News calendar for the US and the Eurozone:
Eurozone – Germany Services Business Activity Index (07:30 UTC).
Eurozone – Germany Manufacturing Business Activity Index (07:30 UTC).
Eurozone – Services Business Activity Index (08:00 UTC).
Eurozone – Manufacturing Business Activity Index (08:00 UTC).
US – Services Business Activity Index (13:45 UTC).
US – Manufacturing Business Activity Index (13:45 UTC).
US – New Home Sales (14:00 UTC).
On April 23rd, the economic events calendar contains many interesting entries. The influence of the information background on traders’ sentiment today may be of moderate strength.
Forecast for EUR/USD and trader recommendations:
Sales of the pair are possible today upon consolidation below the level of 1.0619 on the hourly chart with a target of 1.0519. Or upon bounce from the level of 1.0696 with a target of 1.0619. Purchases of the euro are possible upon a rebound from the level of 1.0619 on the hourly chart with a target of 1.0696.
The material has been provided by InstaForex Company – www.instaforex.com
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