EUR/USD – 1H.
The EUR/USD pair continued the process of falling all day and secured under the corrective level of 161.8% (1.1357). Last night, the drop in quotes also intensified when the euro lost about 60 points within an hour. I would like to note that three speeches by ECB President Christine Lagarde have already taken place this week, and the last one is just tonight. Thus, it is not difficult to draw parallels between the fall of the euro this week and the information background. On Monday, the ECB president said that inflation will remain high for longer than previously expected. This is not news to anyone, since America is being told the same thing. However, both Jerome Powell and Christine Lagarde say that inflation will remain high, and in practice, it does not just remain high, it continues to grow both in the United States and in the European Union. But if in the US the Fed is going to tighten monetary policy and raise rates, then in the European Union it is not. Conversely, Christine Lagarde said that the central bank will not raise rates next year.
The situation with the PEPP incentive program remains unclear. It should be completed in March 2022, but so far Lagarde does not say that everything will be exactly like this. But it has been repeatedly reported that after the closure of the PEPP program, the usual APP program will be expanded, which implies the same asset purchase. All this is very frustrating for traders who both buy the dollar and sell the euro currency. But the report on GDP for the third quarter in the eurozone did not please traders too much. Compared to the previous report for the same quarter, the value did not change and amounted to the same 2.2% q/q. In America, meanwhile, several FOMC representatives spoke at once, and many of them said that the pace of curtailing the stimulus program should be accelerated to take control of rising inflation. This also negatively affects the exchange rate of the European currency.
EUR/USD – 4H
On the 4-hour chart, the pair's quotes have secured under the corrective level of 127.2% (1.1404) and continue the process of falling towards the next corrective level of 161.8% (1.1148). Emerging divergences are not observed in any indicator today. The rebound of quotes from the level of 161.8% will allow us to count on a reversal in favor of the EU currency and some growth in the direction of the level of 1.1404. Closing below it will increase the probability of a further fall in the direction of the Fibo level of 200.0% (1.0865).
News calendar for the USA and the European Union:
EU - ECB President Christine Lagarde will deliver a speech (01:20 UTC).
EU - consumer price index (10-00 UTC).
EU - ECB President Christine Lagarde will deliver a speech (18:30 UTC).
On November 17, the EU calendar contains two speeches by Christine Lagarde at once, the first one has already ended. There will also be a report on inflation in the European Union, and in the US - the calendar of economic events is empty today. The information background may be average in strength today.
COT (Commitments of Traders) report:
The latest COT report showed that during the reporting week, the mood of the "Non-commercial" category of traders became more "bullish". Speculators closed 1,627 long contracts on the euro and 11,328 short contracts. Thus, the total number of long contracts in the hands of speculators decreased to 193 thousand, and the total number of short contracts - to 188 thousand. These numbers practically coincide for the second week in a row, which gives reason to assume that there is no clear mood among speculators. However, in general, in recent months there has been a tendency to strengthen the "bearish" mood. Perhaps it's just that now the mood of traders is at a point where neither bulls nor bears have an advantage. However, the European currency continues to fall at the same time, therefore, the tendency to strengthen the "bearish" mood is correct.
EUR/USD forecast and recommendations to traders:
I recommended selling the pair at the close under the level of 1.1357 on the hourly chart from 1.1250. Now, these deals can be kept open. Purchases – when rebounding from the 1.1250 level on the hourly chart with a target of 1.1357.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency not to make speculative profits, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
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