The EUR/USD pair on Tuesday rose to the corrective level of 100.0% (1.0696) and consolidated above it. Thus, the growth process can be continued toward the next Fibonacci level of 76.4% (1.0764). A consolidation of quotes below the level of 1.0696 will work in favor of the American currency and some decline toward the corrective level of 127.2% (1.0619).
The wave situation remains unchanged. The last completed downward wave broke the low of the previous wave (from April 2), and the new upward wave is still too weak to break the last peak from April 9. 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 9). Or the next downward wave fails to break the last low from April 16. Until then, the bears will maintain their advantage.
The information background on Tuesday was quite rich. In the European Union, four interesting reports on business activity were released at once. In Germany, the service sector rose to 53.3 points, but the manufacturing sector remained very low in April – only 42.2. In the European Union, the service sector rose to 52.9 points, but the manufacturing sector decreased to 45.6. Traders paid more attention to the service sectors, which helped bulls start a new attack in the morning. In the second half of the day, business activity indices in the US were released, which turned out to be worse than traders’ expectations. Thus, for the second time in a day, bull traders received informational support, which helped the European currency show growth. However, in this case, we are only talking about the formation of a corrective wave upward, after which the main “bearish” trend may resume.
On the 4-hour chart, the pair fell to the corrective level of 23.6% (1.0644) and rebounded from it after the formation of two “bullish” divergences on the CCI indicator and the RSI indicator, dropping below 20. Thus, a reversal in favor of the European currency occurred, and the process of growth toward the corrective level of 38.2% (1.0765) began. There are no new impending divergences observed for any of the indicators. Consolidation of the pair’s rate below the level of 1.0644 will allow for a resumption of decline towards the next Fibonacci level of 0.0% (1.0450).
Commitments of Traders (COT) Report:
During 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 has increased from 92 thousand to 167 thousand over the past 3 months. Over the same period, the number of long positions has decreased from 211 thousand to 179 thousand. Bulls have dominated the market for too long, and now they need strong informational support to resume the “bullish” trend. However, the information background has only been supporting bears lately. The European currency could have lost many more positions over the past few weeks.
News Calendar for the US and European Union:
US – Durable Goods Orders (12:30 UTC).
April 24, the economic events calendar contains only one entry, but an important one. The impact of the information background on traders’ sentiment today may be moderate, but only in the second half of the day.
Forecast for EUR/USD and Trader Advice:
Selling the pair is possible today upon consolidation below the level of 1.0696 on the hourly chart, with a target of 1.0619. Buying the euro is possible upon closing above the level of 1.0696 on the hourly chart with a target of 1.0764, but bulls are currently weak, so the growth may end very quickly. Caution should be exercised with purchases.
The material has been provided by InstaForex Company – www.instaforex.com
The EUR/USD pair on Tuesday rose to the corrective level of 100.0% (1.0696) and consolidated above it. Thus, the growth process can be continued toward the next Fibonacci level of 76.4% (1.0764). A consolidation of quotes below the level of 1.0696 will work in favor of the American currency and some decline toward the corrective level of 127.2% (1.0619).
The wave situation remains unchanged. The last completed downward wave broke the low of the previous wave (from April 2), and the new upward wave is still too weak to break the last peak from April 9. 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 9). Or the next downward wave fails to break the last low from April 16. Until then, the bears will maintain their advantage.
The information background on Tuesday was quite rich. In the European Union, four interesting reports on business activity were released at once. In Germany, the service sector rose to 53.3 points, but the manufacturing sector remained very low in April – only 42.2. In the European Union, the service sector rose to 52.9 points, but the manufacturing sector decreased to 45.6. Traders paid more attention to the service sectors, which helped bulls start a new attack in the morning. In the second half of the day, business activity indices in the US were released, which turned out to be worse than traders’ expectations. Thus, for the second time in a day, bull traders received informational support, which helped the European currency show growth. However, in this case, we are only talking about the formation of a corrective wave upward, after which the main “bearish” trend may resume.
On the 4-hour chart, the pair fell to the corrective level of 23.6% (1.0644) and rebounded from it after the formation of two “bullish” divergences on the CCI indicator and the RSI indicator, dropping below 20. Thus, a reversal in favor of the European currency occurred, and the process of growth toward the corrective level of 38.2% (1.0765) began. There are no new impending divergences observed for any of the indicators. Consolidation of the pair’s rate below the level of 1.0644 will allow for a resumption of decline towards the next Fibonacci level of 0.0% (1.0450).
Commitments of Traders (COT) Report:
During 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 has increased from 92 thousand to 167 thousand over the past 3 months. Over the same period, the number of long positions has decreased from 211 thousand to 179 thousand. Bulls have dominated the market for too long, and now they need strong informational support to resume the “bullish” trend. However, the information background has only been supporting bears lately. The European currency could have lost many more positions over the past few weeks.
News Calendar for the US and European Union:
US – Durable Goods Orders (12:30 UTC).
April 24, the economic events calendar contains only one entry, but an important one. The impact of the information background on traders’ sentiment today may be moderate, but only in the second half of the day.
Forecast for EUR/USD and Trader Advice:
Selling the pair is possible today upon consolidation below the level of 1.0696 on the hourly chart, with a target of 1.0619. Buying the euro is possible upon closing above the level of 1.0696 on the hourly chart with a target of 1.0764, but bulls are currently weak, so the growth may end very quickly. Caution should be exercised with purchases.
The material has been provided by InstaForex Company – www.instaforex.com
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