EUR/USD. May 15. Bears quickly make up for lost ground
May 15, 2023 3:23 pm
On Friday, the EUR/USD pair continued the falling process and dropped to the corrective level of 61.8% (1.0843). On Monday, there was a rebound from this level, a reversal in favor of the European currency, and some growth toward the Fibonacci level of 76.4% (1.0917). Closing the pair’s rate below 1.0843 will favor the US dollar and the resumption of the fall towards the next corrective level of 50.0% (1.0785). Undoubtedly, the bearish traders have gone on the offensive after a long pause.
Monday turned out to be quite boring, perfectly suitable for a correction, which we saw. Today in the European Union, an industrial production report was released. As a result of March, the indicator decreased volumes by 4.1%, although traders did not expect a fall of more than 2.5%. However, the euro currency grew throughout the day. Thus, we can conclude that this report was ignored. However, Americans usually trade much more actively than Europeans, so the pair may resume its fall for the rest of the day.
The interest rate and inflation are slowly receding into the background. Traders have been working on the ECB’s monetary policy tightening for a long time, and earlier – the Fed’s monetary policy tightening. Now I can assume that these topics will interest traders only if any central bank starts raising the interest rate “above plan.” So far, I see no grounds for this. The Fed is 90% likely to tighten no longer, and the ECB is 90% likely to be close to a similar decision at upcoming meetings. Now the pair can consolidate within a limited range for several months, but first, I expect a downward correction, as the dollar has significantly fallen over the past months.
On the 4-hour chart, the pair has consolidated under the ascending trend corridor and the corrective level of 50.0% (1.0941), allowing us to count on the continuation of the fall toward the next corrective level of 38.2% (1.0610). The consolidation of quotes above the level of 1.0941 will favor the euro currency and the resumption of growth towards the level of 1.1273. Emerging divergences are not observed today at any of the indicators.
Commitments of Traders (COT) report:
During the last reporting week, speculators opened 3316 long contracts and closed 773 short contracts. The mood of major traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators is now already 247 thousand, and short contracts – only 73 thousand. The European currency has been growing for more than half a year, but the information background does not always support the further strong growth of the pair. The ECB lowered the rate hike pace to 0.25% last week, but the bulls have not yet retreated from the market. The difference between the number of long and short contracts is threefold, which speaks of the proximity of the moment when the bears will go on the offensive. For now, the strong “bullish” mood remains, but I think the situation will change soon. The euro has maintained high levels in recent weeks but has not grown further.
News calendar for the US and the European Union:
European Union – Industrial Production (09:00 UTC).
On May 15, the economic events calendar contained only one entry, which is already known and has yet to cause a market reaction. The influence of the information background on the mood of traders for the rest of the day will be absent.
EUR/USD forecast and tips for traders:
Sales of the pair could be opened when closing below the level of 1.0917 on the hourly chart with a target of 1.0843 (worked out). New sales occur upon a rebound from the level of 1.0917 or when closing under 1.0843 with the next level target. Purchases were possible upon a rebound from the level of 1.0843 on the hourly chart with a target of 1.0917, but I would not count on strong euro growth now.
The material has been provided by InstaForex Company – www.instaforex.com
On Friday, the EUR/USD pair continued the falling process and dropped to the corrective level of 61.8% (1.0843). On Monday, there was a rebound from this level, a reversal in favor of the European currency, and some growth toward the Fibonacci level of 76.4% (1.0917). Closing the pair’s rate below 1.0843 will favor the US dollar and the resumption of the fall towards the next corrective level of 50.0% (1.0785). Undoubtedly, the bearish traders have gone on the offensive after a long pause.
Monday turned out to be quite boring, perfectly suitable for a correction, which we saw. Today in the European Union, an industrial production report was released. As a result of March, the indicator decreased volumes by 4.1%, although traders did not expect a fall of more than 2.5%. However, the euro currency grew throughout the day. Thus, we can conclude that this report was ignored. However, Americans usually trade much more actively than Europeans, so the pair may resume its fall for the rest of the day.
The interest rate and inflation are slowly receding into the background. Traders have been working on the ECB’s monetary policy tightening for a long time, and earlier – the Fed’s monetary policy tightening. Now I can assume that these topics will interest traders only if any central bank starts raising the interest rate “above plan.” So far, I see no grounds for this. The Fed is 90% likely to tighten no longer, and the ECB is 90% likely to be close to a similar decision at upcoming meetings. Now the pair can consolidate within a limited range for several months, but first, I expect a downward correction, as the dollar has significantly fallen over the past months.
On the 4-hour chart, the pair has consolidated under the ascending trend corridor and the corrective level of 50.0% (1.0941), allowing us to count on the continuation of the fall toward the next corrective level of 38.2% (1.0610). The consolidation of quotes above the level of 1.0941 will favor the euro currency and the resumption of growth towards the level of 1.1273. Emerging divergences are not observed today at any of the indicators.
Commitments of Traders (COT) report:
During the last reporting week, speculators opened 3316 long contracts and closed 773 short contracts. The mood of major traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators is now already 247 thousand, and short contracts – only 73 thousand. The European currency has been growing for more than half a year, but the information background does not always support the further strong growth of the pair. The ECB lowered the rate hike pace to 0.25% last week, but the bulls have not yet retreated from the market. The difference between the number of long and short contracts is threefold, which speaks of the proximity of the moment when the bears will go on the offensive. For now, the strong “bullish” mood remains, but I think the situation will change soon. The euro has maintained high levels in recent weeks but has not grown further.
News calendar for the US and the European Union:
European Union – Industrial Production (09:00 UTC).
On May 15, the economic events calendar contained only one entry, which is already known and has yet to cause a market reaction. The influence of the information background on the mood of traders for the rest of the day will be absent.
EUR/USD forecast and tips for traders:
Sales of the pair could be opened when closing below the level of 1.0917 on the hourly chart with a target of 1.0843 (worked out). New sales occur upon a rebound from the level of 1.0917 or when closing under 1.0843 with the next level target. Purchases were possible upon a rebound from the level of 1.0843 on the hourly chart with a target of 1.0917, but I would not count on strong euro growth now.
The material has been provided by InstaForex Company – www.instaforex.com
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