EUR/USD. November 6th. The bulls received favorable news
November 6, 2023 1:20 pm
The EUR/USD pair resumed its upward movement on Friday, consolidating above the level of 1.0714. Thus, the euro’s quotes may continue to rise towards the corrective level of 38.2% (1.0765). A rebound from this level or a close below 1.0714 will favor the US dollar and mark the beginning of a decline towards the Fibonacci level of 23.6% (1.0644). Closing above 1.0765 will increase the likelihood of further growth towards the next corrective level of 50.0% (1.0862).
The wave situation continues to remain complex. In recent weeks, we have mainly seen horizontal movement. As a result, waves alternate without forming clear trends. On Friday, due to American reports, we saw a strong upward wave that broke through the previous two peaks. However, this does not mean that the upward movement will continue. This week, we can expect much more modest trader activity and a descending microtrend.
It is pointless to say that the euro’s rise on Friday was related to economic data from the USA. Three out of four reports turned out to be weaker than traders’ expectations, which caused the fall of the American currency. In the EU, only one report was released on unemployment, but it had no impact on trader sentiment. Thus, the market immediately made it clear that it was awaiting data on the labor market, unemployment, and business activity. As I have said, all three reports turned out to be weak, and there is little sense in considering their values separately. The dollar fell, but I doubt that its decline will continue this week. If it weren’t for Friday’s rise, the pair would likely have remained in a horizontal movement. And that’s exactly what we can observe this week.
On the 4-hour chart, the pair has made a reversal in favor of the euro currency and new consolidation above the corrective level of 100.0% (1.0639). Thus, the upward movement may continue towards the next Fibonacci level of 76.4% (1.0790). The impending “bearish” divergence on the CCI indicator already allows us to expect a reversal in favor of the US dollar and a new decline towards the zone of 1.0500–1.0550. The ascending trend corridor shows that the rise of the euro currency is very weak.
Commitments of Traders (COT) Report:
In the last reporting week, speculators closed 4,735 long contracts and 4,871 short contracts. The sentiment of major traders remains “bullish” but has noticeably weakened in recent weeks and months. The total number of long contracts held by speculators is now 210,000, and short contracts amount to 125,000. The difference is now less than double, although a few months ago, the gap was three times larger. I believe the situation will continue to change in favor of the bears. Bulls have dominated the market for too long, and now they need a strong information background to start a new “bullish” trend. Such a background is currently lacking. Professional traders may continue to close their long positions in the near future. I believe that the current figures allow for the continuation of the euro’s decline in the coming months.
Economic Calendar for the US and the EU:
EU – Germany Services Business Activity Index (08:55 UTC).
EU – Services Business Activity Index (09:00 UTC).
On November 6, the economic events calendar contains only two entries, neither of which is important. The impact of the information background on trader sentiment on Monday can be very weak or absent.
EUR/USD Forecast and Trader Advice:
Buying the pair was possible on the hourly chart upon a rebound from the level of 1.0524, with targets at 1.0644 and 1.0714. Both targets have been hit. Buy positions can be held with targets at 1.0765 and 1.0862, unless the price closes below 1.0714. I advise selling today upon consolidation below the level of 1.0714, with a target of 1.0644 and below.
The material has been provided by InstaForex Company – www.instaforex.com
The EUR/USD pair resumed its upward movement on Friday, consolidating above the level of 1.0714. Thus, the euro’s quotes may continue to rise towards the corrective level of 38.2% (1.0765). A rebound from this level or a close below 1.0714 will favor the US dollar and mark the beginning of a decline towards the Fibonacci level of 23.6% (1.0644). Closing above 1.0765 will increase the likelihood of further growth towards the next corrective level of 50.0% (1.0862).
The wave situation continues to remain complex. In recent weeks, we have mainly seen horizontal movement. As a result, waves alternate without forming clear trends. On Friday, due to American reports, we saw a strong upward wave that broke through the previous two peaks. However, this does not mean that the upward movement will continue. This week, we can expect much more modest trader activity and a descending microtrend.
It is pointless to say that the euro’s rise on Friday was related to economic data from the USA. Three out of four reports turned out to be weaker than traders’ expectations, which caused the fall of the American currency. In the EU, only one report was released on unemployment, but it had no impact on trader sentiment. Thus, the market immediately made it clear that it was awaiting data on the labor market, unemployment, and business activity. As I have said, all three reports turned out to be weak, and there is little sense in considering their values separately. The dollar fell, but I doubt that its decline will continue this week. If it weren’t for Friday’s rise, the pair would likely have remained in a horizontal movement. And that’s exactly what we can observe this week.
On the 4-hour chart, the pair has made a reversal in favor of the euro currency and new consolidation above the corrective level of 100.0% (1.0639). Thus, the upward movement may continue towards the next Fibonacci level of 76.4% (1.0790). The impending “bearish” divergence on the CCI indicator already allows us to expect a reversal in favor of the US dollar and a new decline towards the zone of 1.0500–1.0550. The ascending trend corridor shows that the rise of the euro currency is very weak.
Commitments of Traders (COT) Report:
In the last reporting week, speculators closed 4,735 long contracts and 4,871 short contracts. The sentiment of major traders remains “bullish” but has noticeably weakened in recent weeks and months. The total number of long contracts held by speculators is now 210,000, and short contracts amount to 125,000. The difference is now less than double, although a few months ago, the gap was three times larger. I believe the situation will continue to change in favor of the bears. Bulls have dominated the market for too long, and now they need a strong information background to start a new “bullish” trend. Such a background is currently lacking. Professional traders may continue to close their long positions in the near future. I believe that the current figures allow for the continuation of the euro’s decline in the coming months.
Economic Calendar for the US and the EU:
EU – Germany Services Business Activity Index (08:55 UTC).
EU – Services Business Activity Index (09:00 UTC).
On November 6, the economic events calendar contains only two entries, neither of which is important. The impact of the information background on trader sentiment on Monday can be very weak or absent.
EUR/USD Forecast and Trader Advice:
Buying the pair was possible on the hourly chart upon a rebound from the level of 1.0524, with targets at 1.0644 and 1.0714. Both targets have been hit. Buy positions can be held with targets at 1.0765 and 1.0862, unless the price closes below 1.0714. I advise selling today upon consolidation below the level of 1.0714, with a target of 1.0644 and below.
The material has been provided by InstaForex Company – www.instaforex.com
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